03 Oct Uber Driver Salary Works Out at Less Than $10 an Hour
A new study has calculated that half of Uber drivers in the US earn less than $10 an hour; a far cry from the marketing by the gig economy company which boasts of ‘great money’ for its drivers.
The figures have been calculated by Ridester, a publication that focuses on the ride-hail industry, and they show that after expenses, it is very difficult to ‘make great money with your car’ as an Uber driver.
The median hourly pay with tips for the app’s drivers in the US is $12.73 but it excludes essential costs such as insurance, fuel and the depreciation in value of the car. Using their low end estimate for these must haves of $5 an hour that means a driver would net only be making $9.73 – or about £7.49 which is lower than the minimum wage in the UK.
So whilst a driver working a standard 37.5 hour working week could take home £425 a week – or £18000 a year if they took no holidays – the net figure would be more like £280 and that is without the higher UK costs for fuel in particular.
That also excludes deductions for taxes and in the US is below the poverty threshold for a family of three. It’s also a far cry from the $70-90,000 Uber once claimed its drivers made.
In the UK this means that these drivers would be entitled to in work benefits, something that Fareed Baloch says “should be an embarrassment for multimillion dollar companies to rely on.”
“Companies like Uber have put many smaller firms out of business and have done so by slashing wages whilst using the social security system to top up their wage bill. That means people on the minimum wage in the UK are ensuring that drivers get a decent take home pay whilst Uber executives get rich.
“There is a belief that using an Uber will always be cheaper than using another company or a hackney carriage, but this is not true because of the price surge options. So really, there is a real benefit overall for people to use local companies and support local businesses.”
In the UK a landmark ruling said that Uber drivers were not self employed, thus entitled to the National Living Wage, annual leave, sick pay and other employment benefits, In his ruling, the employment tribunal judge said:
“The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous. Drivers do not and cannot negotiate with passengers… They are offered and accept trips strictly on Uber’s terms.”
Uber claims that on average drivers could make around £565 for a 35-45 hour week, and that’s after it takes its 20% ‘service fee’ (though drivers who signed up after April 24 2016 have to pay 25%). One UK driver has estimated she spends around 20% of her earnings on petrol.
Online “gig economy” jobs are a growing part of the U.S. workforce: About 5 percent of the working population has worked in the gig economy in the past year, up from 2 percent in 2013. Economically speaking this means the wages of these workers are linked to the overall prosperity of the rest of the workers in the country in order for them to use private transport, specific food delivered to home and other perks that technology has brought.
The calculations were made using data collected this summer via screenshots of the earning pages from drivers’ last full day driving.
Uber have themselves conducted a study, back in 2015, which estimated a 20 market average of $19.35 per hour before expensive but that included the premium services like UberBlack.
In 2015, Uber estimated drivers’ average hourly vehicle expenses to be almost $3 for a driver who “uses a personal small sedan to occasionally drive on the platform,” to more than $6 per hour for someone who “uses a 4WD SUV to exclusively drive full-time on the platform.”
Another study by the Economic Policy Institute, using data from Uber, found that Uber drivers made on average $16.44 per hour before vehicle expenses of $4.78.
The median hourly pay for all taxi and ride-hailing workers in 2017 was $11.96, according to the U.S. Bureau of Labor Statistics.
The amount earned differs based on geographical location. Ridester’s poll data showed UberX drivers earning $21.92 an hour including tips, but before expenses. This is still lower than Uber’s 2015 data which found drivers earning $23.69 per hour. Uber once claimed ‘the median wage for an UberX driver working at least 40 hours a week was $90,766 a year.
Using the figures from the New York City Taxi and Limousine Commission released earlier this year, drivers would have to work 75 hours per week, every week to earn that salary.
The latest statistics follow a report by JP Morgan Chase which found that on average, ride-sharing drivers in the U.S are making half of those working five years ago, thanks in part to an increase in supply.