Uber also has overhead costs for each driver. Currently this is minimal, probably just the cost of operating the web service. Let's say $X is 20, $Y is 15, and

Uber also has overhead costs for each driver. Currently this is minimal, probably just the cost of operating the web service. Let's say $X is 20, $Y is 15, and each driver has a $50 a week overhead cost. So Uber drivers have to drive for 10 hours a week to make even. No, you're talking about Uber breaking even — not the drivers. If you're worried about the drivers, how much does their individual health insurance cost versus a group plan for a large company like Uber? How about the rates they'd get with an IRA versus a 401k that only a W2 employee is eligible for? The employee's share of the costs go down when they are classified as an employee and not an individual contractor. You're conflating the costs of driving for Uber (most of which Uber has shifted to their pseudo-employees) with the costs to run Uber. Uber itself loses money on every ride, it's entirely subsidized with VC money. That's why their stated goal is to develop autonomous vehicles and dump the drivers ASAP.