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Economist behind Uber study admits error, adjusts numbers
- ollin 9y agoPrevious threads (on the original story): https://news.ycombinator.com/item?id=16498551 https://news.ycombinator.com/item?id=16498551, https://news.ycombinator.com/item?id=16501017 https://news.ycombinator.com/item?id=16501017
- crankylinuxuser 9y agoUh huh. Does this include commercial insurance for "driving people for money"? Because your personal insurance likely has a clause saying it does not cover commercial activity. What this means: if you get into an accident while engaging commercial activity, you aren't insured. And your license is then revoked due to lack of insurance. Fun times.
- deleted 9y ago[deleted]
- anamexis 9y agoUber provides insurance for drivers while they are driving for Uber: https://www.uber.com/drive/insurance/ https://www.uber.com/drive/insurance/
- FlyingSideKick 9y agoEven with this revision the hourly wage is well below the $15.00 minimum wage here in Seattle. I wonder if after expenses Instacart and Amazon delivery drivers make any more than the typical Uber driver? I think contractors across all income levels need better protections. Laws should be enacted to guarantee after vehicle expenses that if one drives an Uber for an hour one makes at least a minimum wage.
- Consultant32452 9y agoIf there are $15/hr jobs, why do you believe so many people are willing to accept half that to drive for Uber? I wonder what their total pay is after tips.
- jakob223 9y agoSince nobody seems to have any idea how much these things actually pay after costs (see: this correction and the original study), it's plausible that people would expect this to pay more than it does.
- usrusr 9y agoAlso, it's really difficult to define the one, right way of correcting for vehicle expenses. Some people would even work for free if it just gave them access to a high status car (live off savings while pretending to have "made it", as proven by the car). Others would be fine with any old beater, or a bike.
- xapata 9y agoI think word would get around after a while.
- sp332 9y agoI think it just did.
- xapata 9y agoI wonder how much reach that study has among Uber drivers and potential Uber drivers.
- Consultant32452 9y agoThe study might matter to us and regulators, but the thing that matters to drivers is how much they as an individual make. They had that information already, and knowing the average income doesn't help them figure out how much money they're making.
- falcolas 9y agoThis value seems to make a bit more "common sense" style sense - but it's still way too low for a "non-tip" job. Hell, it's probably even too low for a job with tips (which bugs me, but separate topic). Given that Uber is most popular in the bigger cities where the cost of living is correspondingly higher, is it enough?
- wgerard 9y agoI feel somewhat vindicated now: https://news.ycombinator.com/item?id=16503558 https://news.ycombinator.com/item?id=16503558
- mc32 9y agoSometimes we are too quick to agree with things that reinforce our beliefs. In this case that ride service platforms are squeezing out the last penny from their captive servants. Do, hats off to you for doing some due diligence and doing some back of the napkin calculations proving a study incorrect in its assertion.
- jmull 9y agoWell, while ~$9/hr is a lot better than ~$4, it's still well in the category of squeezing drivers, IMO. In fact, if your goal is to squeeze your drivers, you actually don't want to squeeze too hard because soon you'll have no one left to squeeze. $9/hr is perhaps a level a number of people can (barely) subsist at (at least for a while) while $4/hr may be untenable for almost everyone. (I agree, though, that drivers aren't like captive servants, as some seem to assume.)
- wgerard 9y agoFWIW I actually agree with you re: squeezing, just something about the numbers either way didn't seem to add up (others were quoting $13/hr, study was saying $3/hr).
- saas_co_de 9y agoThis is still median profit from a sample group where > 80% worked less than 40 hours per week. The median is someone working well under 40 hours per week. I wish they would release the overall income distribution based for their model instead of just one number.
- BurningFrog 9y agoAlex Tabarrok pointed to the well done study, that of course never got anywhere near this level of attention: https://twitter.com/ATabarrok/status/969651065695227904 https://twitter.com/ATabarrok/status/969651065695227904 "Dubious. Cited paper uses self-reported data from 1100 drivers. Cook et al. use exactly measured data on 1.8 million drivers and calculate average wage after expenses of $13 per hour. https://web.stanford.edu/~diamondr/UberPayGap.pdf https://web.stanford.edu/~diamondr/UberPayGap.pdf "
- aje403 9y agoReasonable conclusions that don't stretch evidence get less attention
- wbc 9y agoThanks for the link! But I think you have an extra double quote at the end
- BurningFrog 9y agoSorry, I was quoting his tweet in its entirety, which made the link unclickable.
- gcb0 9y agoIt definitely does not look like you describe. The original article is self-reported income, which i agree is crap and proof that it can be interpreted any way one wants, as is show in this thread: this is clearly PR damage-control from uber. The one you linked is the other end of the spectrum. It is a math formula on values provided by uber and completely ignores the associated costs with the profession. It does not account for down time, it does not account for insurance, car depreciation etc. The $13 is just more meaningless data because all it measured in the paper is "income from uber, taking into account avg on-meter time with pool+surge pricing variations". (they do include the costs, but as "The primary costs drivers face are fuel, maintenance, depreciation, and fines for parking or moving violations. Zoepf et al. (2017) estimate median driver’s expenses are 32 cents per mile." which is very far from actual data) IMHO both are utter garbage.
- rossdavidh 9y agoDefinitely too low for a primary job. However, it might make sense for people to do as an extra 5-10 hours a week, or during peak festival times when the taxi system is overloaded. If a person needs to turn their extra time into money, but don't have enough extra time to get a second job, it could make sense. I'm not sure either Uber or Lyft could survive on those kind of drivers, though.
- z2 9y agoThere may be some ways to make it work more consistently--though not in a way that Uber/Lyft wants. I've met drivers who mostly work 3am to 7am shifts, to catch back-to-back airport runs. The enterprising ones also actively work to get Uber/Lyft out of the process by offering their number directly.
- prepend 9y ago“The enterprising ones also actively work to get Uber/Lyft out of the process by offering their number directly.” I do airport runs. A few have given me their card. At first I thought this was cool as they charged $25 instead of $30. But then the driver was unavailable a few times. Managing different cards with a hierarchy of backups is a pain for users. I switched back to Uber. Interestingly the last one I used charged $35 which was more than Uber. I was already in the car so I paid. People underestimate the service Uber makes in managing riders and drivers. I don’t want to “have a guy” who’s not dependable. Perhaps one day, I can afford a full time valet and driver. That day is not near.
- username223 9y agoI don't see this working for Uber/Lyft drivers. For "gigs" like tutoring, it's easy to get a student or parent to split the referral service's fee, because they do more or less nothing after the first session, and a personal relationship is valuable. For car services, you just want to get from A to B at some random time, and Joe Driver may not be near A at that time.
- CodeWriter23 9y ago
- deleted 9y ago[deleted]
- bearbearbear 9y agoAs a lowly slob of the type of which you're speaking it is my privilege to inform you that a lot of us will go drive for Uber for a few hours so we can have a little pocket money. I, for example, will often go drive for Uber for a couple of hours to make around ten bucks so I can go out to eat at McDonalds for dinner. Now remind me I'm a piece of shit for eating at McDonalds rather than spending $40 on fried chicken at the Mayfield Cafe.
- cratermoon 9y agoSo they still don't make minimum wage and some lose money.
- bearbearbear 9y ago"Admits error" meaning they were given the choice between litigation and fudging the numbers.
- thehnguy 9y agoUnderwhelming correction from the author/economist.
- patmcguire 9y agoIt's too late. Corrections don't really work in the social media age, two different interpretations of the same base facts won't propagate through the same path. I don't know whether the adjustments are valid or invalid, but $3.37 will be an incontrovertible fact for an influential swath of people for a long time.
- taoistextremist 9y agoKind of makes me think of the divide in opinion on modern wage inequality. I'm still not sure whether to think it's purely because of women not being in as well paying positions or whether discrimination within the same job is a significant player, because I see conflicting reports.
- TangoTrotFox 9y agoI find very basic sniff tests tend to score relatively well at figuring out the truth on 'controversial' issues. So for instance this $3/hour earnings just did not make sense as there would rapidly approaching 0 drivers of > 'x months' experience driving for Uber, whereas drivers that have been doing it for years are hardly unicorns. For the wage gap take as an assumption that companies were genuinely able to pay women less for doing the exact same quality and quantity of work as men. Well what would happen? We already live in a world where big companies relentlessly squeeze every penny they can from minimizing labor costs. The notion that people are intentionally paying more to men just to be around more men defies belief, to put it mildly. And there's a corollary to this as well. As 'wage gap' entered the zeitgeist, there's no doubt that some companies, ever anxious to provide a bump to their next quarterly, did actively look to see if they could replace their male workers with females to save on labor costs. And the results of their research, in that no companies seem to be doing this, speaks for itself.
- ksenzee 9y agoControversial issues are controversial precisely because there's no "basic sniff test" that fits all the data. If you find you come to an easy conclusion on a controversial issue, you might not have all the information others do. To take your wage gap example, your explanation only works in the case where hiring managers know men and women are equally qualified, but choose to pay women less because they can get away with it. That's almost certainly not what's going on.
- prepend 9y ago$8.55 is the profit but it is compared to minimum wage. Minimum wage is not profit as there are costs associated with getting to work (bus/car) and mandatory taxes. Shouldn’t the $8.55 be compared with net income from minimum wage? This seems like a meaningful comparison for people choosing to drive or work minimum wage.
- theptip 9y agoThis is a very good point; if you drive your car to work then you pay gas and depreciation just like an Uber driver, except you don't get to tax-deduct it.
- camgunz 9y agoDefinitely, but "I commute to/from work" is a lot different than "I drive for 10 hours a day, every day".
- prepend 9y agoIt’s certainly different, but I think it should be in the comparison. I drive 10 hours a week, not per day. But there’s a cost. To say “you make $10/hour” and an Uber driver makes $8.55 after expenses and taxes is not very useful because the Uber driver has more cash in pocket. I think this is useful for an academic paper to compare apples to oranges. And the author directly compared this to minimum wage which seems like an amateur mistake for a researcher from MIT. Unless they have a policy angle they are promoting and are not a fair broker of info.
- theptip 9y agoAgreed - if it was an apples-to-apples comparison we wouldn't need an academic paper.
- tyingq 9y agoYou also pay self employment taxes. W2 and 1099 income aren't directly comparable. Oh, and health insurance as a contractor is WAY higher than as an employee. That has to eat into their wages a lot.
- jostmey 9y agoEither way is more than a grad student makes grading papers and carrying out research plans
- allthenews 9y agoDo any of the naysayers ever actually talk to their uber/lyft drivers? I've never met a single one with bad things to say about the job. Most seem to enjoy the social aspect, and many foreigners take it as an opportunity to practice English while making some spare cash. Who are you people to presume that these rational agents need to be restricted from earning money in a way that they deem convenient? Especially when their work is at will and unforced? Do you really feel that there is some kind of net good to the loss of work that comes with forcing uber to pay minimum wage, when it means that many content drivers will lose work?
- Karrot_Kream 9y agoWhen I used to ride Uber/Lyft more I talked to a ton of drivers who had bad things to say about ridesharing, about how it's a race to the bottom, about how the taxi days paid more, about how the hours are grueling and they weren't fit, etc. I think it just depends on your sample. Luckily, studies explicitly try to find unbiased samples.
- olefoo 9y agoHave you considered the incentives that they have when talking to a paying customer? Particularly one that is going to rate them based on the interaction? Of course they "love their job"; they want to create a positive experience in the mind of someone who has a lot of power over them. What I'm saying is that your anecdata has an observer effect that you are strongly discounting.
- moate 9y agoAlso: most waiters think your jokes are funny, and every stripper thinks you're very handsom.
- ralston 9y ago^this +1
- allthenews 9y agoWhat incentives? A 4 instead of 5 star rating, and maybe a $1-5 tip? For answering a question honestly? I think your incentives are overstated. Excluding some kind of egregious slight, riders have very little influence over drivers.
- raiyu 9y agoRaising two billion dollars without having a product in the market is a huge red flag. Most major break throughs started from a very specific problem, that was addressed, got some market traction, and then refined over time. Large up front investment without testing the market has been done before, but I can't really think of a single recent example where it went well. Maybe perhaps SpaceX, but I'm not really familiar with their founding story and costs associated. But also consider that one is literally launching rockets into space, the other is creating a VR/AR headset. Launching a single rocket costs millions! Buying this or any AR/VR headset will ultimately cost $1,000. Hence I don't see why you need $2B to get this off the ground. And if they are having a problem shrinking the tech, well then it's not a real product. Because they aren't pitching here is a refrigerator sized computer and a headset, they are pitching here is a headset, so if you haven't shrunk it, then you really haven't built the MVP you were looking far as portability and comfort I'm sure are part of the essential requirements for this product.
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- samfisher83 9y agoAccording to the new study the driver make between 8-10 bucks an hour. I guess its better than 3 dollars, but that still isn't a livable wage in America.
- abvdasker 9y agoSad that the correction has fewer upvotes than both of the HN threads with the original dubious statistic: https://news.ycombinator.com/item?id=16498551 https://news.ycombinator.com/item?id=16498551 https://news.ycombinator.com/item?id=16501017 https://news.ycombinator.com/item?id=16501017 I think this speaks volumes about HN's user base being far less enlightened and fact-oriented than we like to think. Instead it seems that the articles reinforcing our biases are the ones we pay the most attention to.