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> ...Uber drivers reported earning $13.47 per hour, which means that on average, drivers report that their car is costing them over $6 per hour to operate. If

> ...Uber drivers reported earning $13.47 per hour, which means that on average, drivers report that their car is costing them over $6 per hour to operate. If you were to drive full time, that would get you about 27k/year, which is about the average income that a taxi driver makes. Rideshare companies are asking you to take more personal financial risk than you might as a taxi driver, but giving you more flexibility. Still 27k/year is not much money really anywhere in the country. I think this is a symptom of some major underlying problems with our economy rather than an indictment of the rideshare industry. If we can't afford to pay drivers a living wage to do their work, then the people who are using these services aren't as well off as they think they are.

jluxenberg 6y ago
Tangent: $6/hr sounds a bit low; actual costs are probably higher. The IRS standard mileage rate (the amount you can deduct from your taxes for each mile driven) is $0.58/mi (https://www.irs.gov/tax-professionals/standard-mileage-rates https://www.irs.gov/tax-professionals/standard-mileage-rates) $6/hr operating costs means the driver is driving a max of ~10mi/hour, if costs to operate are in line with IRS guidelines.
- Hamuko 6y ago
  I wouldn't be surprised if drivers are underestimating their costs. The true cost of vehicle ownership is rather murky and I doubt many of these drivers are self-taught accountants.
  - jeffbee 6y ago
    That's why the driver attrition rate is so high and Lyft/Uber have to constantly run driver recruitment efforts in mature service areas. After the driver ruins their original car in less than a year, they quickly realize the true operating costs. Say what you will about the taxi business but at least taxi drivers knew that the gate fee on a leased vehicle was $100/day.
- bpodgursky 6y ago
  The IRS deprecation is very far above the costs in actual practice. It's a very conservative number.
  - jluxenberg 6y ago
    I think the IRS number might be spot on. Quick math: ($25,000 cost to buy car new - $4,000 residual value at end-of-life ) / 100,000 miles usable lifetime = $0.21/mi depreciation of value $3.22 / gallon * (1 / (17 mi / gal fuel efficiency)) = $0.19/mi for fuel Maintenance: $40 per oil change / 8,000 miles = $0.01 / mi $600 tire change / 60,000 miles = $0.01 / mi $1,186 average yearly repair / 16,000 average miles driven = $0.07 mile That all adds up to $0.49 / mi and does NOT include insurance and DMV registration fees.
    - xur17 6y ago
      But in most cases, you aren't buying a car just to drive for Uber (more than half drive between 1 and 15 hours a week [0]), you're doing it on the side. Your per mile costs for driving for Uber are the marginal costs (costs of additional insurance, fuel, marginal wear and tear, etc). Also, if you're driving for Uber in a new car that gets 17 mi / gal fuel efficiency, you're not making wise moves. There's a reason a lot of Uber drivers are using 5 year old Prius's - this cuts the fuel cost in half, and the depreciation down quite a bit. [0] https://www.vox.com/2018/10/2/17924628/uber-drivers-make-hourly-expenses https://www.vox.com/2018/10/2/17924628/uber-drivers-make-hou...
      - sudosysgen 6y ago
        Well, no, because if you are an Uber driver the vast majority of the depreciation in the value of your car comes from driving Uber. Cars depreciate in large part due to mileage. Finally, "marginal wear and tear" is a completely absurd concept. The cost of wear and tear on maintenance of a car has a positive derivative and thus has no margin, the more wear and tear the more expensive wear and tear gets. In other words, the limit of the cost of wear and tear as wear goes to infinity is divergent towards positive infinity. Thus, there is no marginal cost.
- beached_whale 6y ago
  I was talking to a taxi dispatcher at some function here in Canada, and it came up that each vehicle on the road would drive about 500km/day. That's about $200-$250/day in what the per distance rate many employers give out(40¢-50¢/km) for fuel and wear on vehicle. But assuming an 22hrs of driving a day(on a taxi with multiple drivers), that's about 22km each hour or $11/hr for fuel and wear on the vehicle according to what many employers would pay in addition to time driving. This is in Canadian dollars, so $11/hr is about $8/hr in USD and works out to an average of $16USD/hr of driving(assuming (22km|13miles)/hr average)
- Skunkleton 6y ago
  TCO for a Prius is about 6k a year for non-rideshare applications. The link has this cost around ~13k per year, which isn't outlandish. I think you are right in general though. Uber will let you drive an F-350, but there is no way you will make money with it.
- sudosysgen 6y ago
  I am almost certain 6$/hr doesn't count depreciation and only part of maintenance. Just fuel costs mean that if you were to drive an average of 20mph, you would pay on average 3$ in gas (in California).
asdasfasdfasdf 6y ago
"personal risk" This is kind of the state of the country really. Ridesharing is an OK gig until you get into an accident, you're fine without health insurance until you get injured, you don't really need a union until you start getting treated unfairly, you can pay for college as long as you consistently have a good salary... we're being statistically gaslit with the idea that most people can scrape by without higher wages and better general protections.
- macinjosh 6y ago
  I think you're gas lighting us by ignoring the fact that this personal risk is taken at personal choice. If someone wanted the arrangement that comes with an employee/employer relationship there are jobs that offer that. But not everyone wants that, some people prefer, for their own reasons that are really none of your business to be an independent contractor. This is about choice plain and simple.
  - vore 6y ago
    Not everyone has that choice, which is why so many people depend on gig economy jobs as their livelihood. If you do not have in-demand skills for the market, have a family to feed, and the cost of training exceeds your expenses, Uber/Lyft might be one of your only job options.
  - RangerScience 6y ago
    We make choices within contexts other people create.
    - macinjosh 6y ago
      And your solution is to take away more choices from people?
      - Klinky 6y ago
        The solution is to ensure the worker's employment status is within the legal definition as it's defined. Gig economy could usher in a new era of worker flexibility, but it could also usher in a new era of worker exploitation. The gig economy keeps pushing risks and cost down the chain, while also showing signs that it may not be a sustainable model as a whole without venture capital to burn through or an end game of predatory monopolist behavior within the market region.
hammock 6y ago
Who says driving for Uber/Lyft should be a full-time job, or statutorily viable as a full-time job? If you consider it only as a second or third job, then it makes a lot more sense that your second or third job is not going to pay as well or have the same benefits as your first job. Those aspects would be expected and reasonable. The low-risk, high-reward jobs fill your primary job slot, then you seek other options as needed. (After all, if it was any different, you might quit your first job and drive for rideshare instead)
- skybrian 6y ago
  What happens in practice is that people try to make ends meet with two or three crappy part-time jobs, because that's all they can find. (Insert plug for UBI here.)
  - malandrew 6y ago
    Passing laws to eliminate crappy jobs doesn't magically make non-crappy jobs come into existence. Unsure where UBI comes into the picture either since UBI also does not make non-crappy jobs magically come into existence.
    - skybrian 6y ago
      It doesn't solve anything, but having an income stream that's not connected with your job should help make crappy jobs livable, and also increase bargaining power for workers, due to having better alternatives. Also, increased spending does tend to result in more jobs, at least in normal times.
      - malandrew 6y ago
        Can you provide a specific fairly objective definition of what a "crappy" job is? Is it just a job you don't like doing? How does adding UBI address bargaining power beyond a temporary fix? Eventually prices will adjust to take into account the buying power of UBI. UBI will become the new baseline and people on UBI will lose the benefits of that buying power. Not denying that UBI won't provide a temporary fix, but there is nothing about UBI prevents the market from adjusting to take into account UBI.
orclev 6y ago
Our economy has become so overwhelmingly top heavy that the majority of the population is losing the ability to take part in it. The middle class used to be the mean income, but these days the mean has drifted so far from the mode that the distinction between middle class and lower class has all but vanished. Just taking a brief look at the 2014 census numbers, the mode income was centered around $22,000 a year while the mean was $75,000. Let that sink in. The largest percentage of the US population makes less than $25,000 a year.
- macinjosh 6y ago
  This information is only useful if it is contrasted against the number of people who want/need/are able to work. People like the retired, teenagers, stay-at-home parents, college students, etc. all may make some small amount of income each year but generally speaking don't work full time. This isn't evidence of people struggling. It is evidence of people exercising their personal rights which include not being a worker.
  - orclev 6y ago
    You're suggesting that the retired, teenagers, stay-at-home parents, and college students make up the majority of the US working population? Yeah, not buying that one at all. The US economy is fucked right now, we've been madly spinning the plate to try to keep it going, but it's starting to wobble badly. Unless something major is done soon it's only a question of when not if things start to implode.
    - macinjosh 6y ago
      > You're suggesting that the retired, teenagers, stay-at-home parents, and college students make up the majority of the US working population? Yeah, not buying that one at all. No where did I say this. What are you talking about?
      - orclev 6y ago
        My point was that the mode income, that is the income reported by the largest number of people was incredibly low. You claim that's because there are a bunch of people that don't really need/want to work, so they don't make much. That implies that that group represents the majority of the working population (in order to be the mode income). You're point might have been correct if we were talking about the mean income being very low, but in this case it's exactly the opposite.
JumpCrisscross 6y ago
> Rideshare companies are asking you to take more personal financial risk than you might as a taxi driver At least in New York, the drivers carry all the risk. They pay for insurance and gas and damages and time (so they take risk of not getting fares).
sampsonitify 6y ago
And what does welfare pay? Serious question as I'm not in the USA and have no idea. If Welfare pays less, isn't Uber/Lyft a positive thing? And that is just the direct monetary benefit of $27K vs welfare. There are many intangible benefits to work vs welfare beyond money. Being unemployed has mental health and life satisfaction costs (summary: https://marginalrevolution.com/marginalrevolution/2019/04/is-work-fun.html https://marginalrevolution.com/marginalrevolution/2019/04/is...). This is research that has existed for > 30 years. There is significant evidence that long term unemployment REALLY hurts someone's hiring chances when applying for a job (see https://marginalrevolution.com/marginalrevolution/2013/04/companies-wont-even-look-at-the-resumes-of-the-long-term-unemployed.html https://marginalrevolution.com/marginalrevolution/2013/04/co... from 2013 with linked papers). As a stepping stone to a living wage, driving rideshare likely helps people looking for better paid work, especially given you can clock off for two hours to take an interview, then clock back on. Try that working any other job. The rideshare side of the ledger has better mental health & life satisfaction, more money and better job prospects, vs the welfare side with more free time. I'd prefer to frame the "living wage" question as of all the people who drive Uber/Lyft, not Uber/Lyft drivers which puts their job above their humanity and implies it is a permanent state of affairs, anyway of all the people who drive Uber/Lyft at some point in their lives, will they be better off with the option of driving Uber/Lyft, or better off in a world where Uber/Lyft is not an option?
- gruez 6y ago
  >There is significant evidence that long term unemployment REALLY hurts someone's hiring chances when applying for a job (see https://marginalrevolution.com/marginalrevolution/2013/04/co.. https://marginalrevolution.com/marginalrevolution/2013/04/co.... from 2013 with linked papers). But in the study linked, they're really testing whether a resume gap hurts your chances of getting hired. I'm skeptical that it would translate the same to gig economy job, given you can't ask them for a reference, nor is there any indication of how much you worked (did you work 40 hour weeks? a few hours a week?), or how reliable/timely you were.
  - sudosysgen 6y ago
    This is a good point. Gig work is unfalsifiable and worth as much as a blank period to an employer trying to see if you are a good fit. Hell, you could lie and say that you were an Uber driver and there is literally no way for this to be verified.
sudosysgen 6y ago
It's also important to note that the 13.47$ an hour is heavily biased towards expensive cities, where it really isn't much, and is actually often under the minimum salary.
- Skunkleton 6y ago
  Its probably also worth noting that it is $13/hour while working. Your income will fluctuate heavily with demand, which further increases your risk. This of course is also true of taxi drivers.

jluxenberg 6y ago

Tangent: $6/hr sounds a bit low; actual costs are probably higher. The IRS standard mileage rate (the amount you can deduct from your taxes for each mile driven) is $0.58/mi (https://www.irs.gov/tax-professionals/standard-mileage-rates https://www.irs.gov/tax-professionals/standard-mileage-rates) $6/hr operating costs means the driver is driving a max of ~10mi/hour, if costs to operate are in line with IRS guidelines.

Hamuko 6y ago
I wouldn't be surprised if drivers are underestimating their costs. The true cost of vehicle ownership is rather murky and I doubt many of these drivers are self-taught accountants.
- jeffbee 6y ago
  That's why the driver attrition rate is so high and Lyft/Uber have to constantly run driver recruitment efforts in mature service areas. After the driver ruins their original car in less than a year, they quickly realize the true operating costs. Say what you will about the taxi business but at least taxi drivers knew that the gate fee on a leased vehicle was $100/day.
bpodgursky 6y ago
The IRS deprecation is very far above the costs in actual practice. It's a very conservative number.
- jluxenberg 6y ago
  I think the IRS number might be spot on. Quick math: ($25,000 cost to buy car new - $4,000 residual value at end-of-life ) / 100,000 miles usable lifetime = $0.21/mi depreciation of value $3.22 / gallon * (1 / (17 mi / gal fuel efficiency)) = $0.19/mi for fuel Maintenance: $40 per oil change / 8,000 miles = $0.01 / mi $600 tire change / 60,000 miles = $0.01 / mi $1,186 average yearly repair / 16,000 average miles driven = $0.07 mile That all adds up to $0.49 / mi and does NOT include insurance and DMV registration fees.
  - xur17 6y ago
    But in most cases, you aren't buying a car just to drive for Uber (more than half drive between 1 and 15 hours a week [0]), you're doing it on the side. Your per mile costs for driving for Uber are the marginal costs (costs of additional insurance, fuel, marginal wear and tear, etc). Also, if you're driving for Uber in a new car that gets 17 mi / gal fuel efficiency, you're not making wise moves. There's a reason a lot of Uber drivers are using 5 year old Prius's - this cuts the fuel cost in half, and the depreciation down quite a bit. [0] https://www.vox.com/2018/10/2/17924628/uber-drivers-make-hourly-expenses https://www.vox.com/2018/10/2/17924628/uber-drivers-make-hou...
    - sudosysgen 6y ago
      Well, no, because if you are an Uber driver the vast majority of the depreciation in the value of your car comes from driving Uber. Cars depreciate in large part due to mileage. Finally, "marginal wear and tear" is a completely absurd concept. The cost of wear and tear on maintenance of a car has a positive derivative and thus has no margin, the more wear and tear the more expensive wear and tear gets. In other words, the limit of the cost of wear and tear as wear goes to infinity is divergent towards positive infinity. Thus, there is no marginal cost.
beached_whale 6y ago
I was talking to a taxi dispatcher at some function here in Canada, and it came up that each vehicle on the road would drive about 500km/day. That's about $200-$250/day in what the per distance rate many employers give out(40¢-50¢/km) for fuel and wear on vehicle. But assuming an 22hrs of driving a day(on a taxi with multiple drivers), that's about 22km each hour or $11/hr for fuel and wear on the vehicle according to what many employers would pay in addition to time driving. This is in Canadian dollars, so $11/hr is about $8/hr in USD and works out to an average of $16USD/hr of driving(assuming (22km|13miles)/hr average)
Skunkleton 6y ago
TCO for a Prius is about 6k a year for non-rideshare applications. The link has this cost around ~13k per year, which isn't outlandish. I think you are right in general though. Uber will let you drive an F-350, but there is no way you will make money with it.
sudosysgen 6y ago
I am almost certain 6$/hr doesn't count depreciation and only part of maintenance. Just fuel costs mean that if you were to drive an average of 20mph, you would pay on average 3$ in gas (in California).

asdasfasdfasdf 6y ago

"personal risk" This is kind of the state of the country really. Ridesharing is an OK gig until you get into an accident, you're fine without health insurance until you get injured, you don't really need a union until you start getting treated unfairly, you can pay for college as long as you consistently have a good salary... we're being statistically gaslit with the idea that most people can scrape by without higher wages and better general protections.

macinjosh 6y ago
I think you're gas lighting us by ignoring the fact that this personal risk is taken at personal choice. If someone wanted the arrangement that comes with an employee/employer relationship there are jobs that offer that. But not everyone wants that, some people prefer, for their own reasons that are really none of your business to be an independent contractor. This is about choice plain and simple.
- vore 6y ago
  Not everyone has that choice, which is why so many people depend on gig economy jobs as their livelihood. If you do not have in-demand skills for the market, have a family to feed, and the cost of training exceeds your expenses, Uber/Lyft might be one of your only job options.
- RangerScience 6y ago
  We make choices within contexts other people create.
  - macinjosh 6y ago
    And your solution is to take away more choices from people?
    - Klinky 6y ago
      The solution is to ensure the worker's employment status is within the legal definition as it's defined. Gig economy could usher in a new era of worker flexibility, but it could also usher in a new era of worker exploitation. The gig economy keeps pushing risks and cost down the chain, while also showing signs that it may not be a sustainable model as a whole without venture capital to burn through or an end game of predatory monopolist behavior within the market region.

hammock 6y ago

Who says driving for Uber/Lyft should be a full-time job, or statutorily viable as a full-time job? If you consider it only as a second or third job, then it makes a lot more sense that your second or third job is not going to pay as well or have the same benefits as your first job. Those aspects would be expected and reasonable. The low-risk, high-reward jobs fill your primary job slot, then you seek other options as needed. (After all, if it was any different, you might quit your first job and drive for rideshare instead)

skybrian 6y ago
What happens in practice is that people try to make ends meet with two or three crappy part-time jobs, because that's all they can find. (Insert plug for UBI here.)
- malandrew 6y ago
  Passing laws to eliminate crappy jobs doesn't magically make non-crappy jobs come into existence. Unsure where UBI comes into the picture either since UBI also does not make non-crappy jobs magically come into existence.
  - skybrian 6y ago
    It doesn't solve anything, but having an income stream that's not connected with your job should help make crappy jobs livable, and also increase bargaining power for workers, due to having better alternatives. Also, increased spending does tend to result in more jobs, at least in normal times.
    - malandrew 6y ago
      Can you provide a specific fairly objective definition of what a "crappy" job is? Is it just a job you don't like doing? How does adding UBI address bargaining power beyond a temporary fix? Eventually prices will adjust to take into account the buying power of UBI. UBI will become the new baseline and people on UBI will lose the benefits of that buying power. Not denying that UBI won't provide a temporary fix, but there is nothing about UBI prevents the market from adjusting to take into account UBI.

orclev 6y ago

Our economy has become so overwhelmingly top heavy that the majority of the population is losing the ability to take part in it. The middle class used to be the mean income, but these days the mean has drifted so far from the mode that the distinction between middle class and lower class has all but vanished. Just taking a brief look at the 2014 census numbers, the mode income was centered around $22,000 a year while the mean was $75,000. Let that sink in. The largest percentage of the US population makes less than $25,000 a year.

macinjosh 6y ago
This information is only useful if it is contrasted against the number of people who want/need/are able to work. People like the retired, teenagers, stay-at-home parents, college students, etc. all may make some small amount of income each year but generally speaking don't work full time. This isn't evidence of people struggling. It is evidence of people exercising their personal rights which include not being a worker.
- orclev 6y ago
  You're suggesting that the retired, teenagers, stay-at-home parents, and college students make up the majority of the US working population? Yeah, not buying that one at all. The US economy is fucked right now, we've been madly spinning the plate to try to keep it going, but it's starting to wobble badly. Unless something major is done soon it's only a question of when not if things start to implode.
  - macinjosh 6y ago
    > You're suggesting that the retired, teenagers, stay-at-home parents, and college students make up the majority of the US working population? Yeah, not buying that one at all. No where did I say this. What are you talking about?
    - orclev 6y ago
      My point was that the mode income, that is the income reported by the largest number of people was incredibly low. You claim that's because there are a bunch of people that don't really need/want to work, so they don't make much. That implies that that group represents the majority of the working population (in order to be the mode income). You're point might have been correct if we were talking about the mean income being very low, but in this case it's exactly the opposite.

JumpCrisscross 6y ago

> Rideshare companies are asking you to take more personal financial risk than you might as a taxi driver At least in New York, the drivers carry all the risk. They pay for insurance and gas and damages and time (so they take risk of not getting fares).

sampsonitify 6y ago

And what does welfare pay? Serious question as I'm not in the USA and have no idea. If Welfare pays less, isn't Uber/Lyft a positive thing? And that is just the direct monetary benefit of $27K vs welfare. There are many intangible benefits to work vs welfare beyond money. Being unemployed has mental health and life satisfaction costs (summary: https://marginalrevolution.com/marginalrevolution/2019/04/is-work-fun.html https://marginalrevolution.com/marginalrevolution/2019/04/is...). This is research that has existed for > 30 years. There is significant evidence that long term unemployment REALLY hurts someone's hiring chances when applying for a job (see https://marginalrevolution.com/marginalrevolution/2013/04/companies-wont-even-look-at-the-resumes-of-the-long-term-unemployed.html https://marginalrevolution.com/marginalrevolution/2013/04/co... from 2013 with linked papers). As a stepping stone to a living wage, driving rideshare likely helps people looking for better paid work, especially given you can clock off for two hours to take an interview, then clock back on. Try that working any other job. The rideshare side of the ledger has better mental health & life satisfaction, more money and better job prospects, vs the welfare side with more free time. I'd prefer to frame the "living wage" question as of all the people who drive Uber/Lyft, not Uber/Lyft drivers which puts their job above their humanity and implies it is a permanent state of affairs, anyway of all the people who drive Uber/Lyft at some point in their lives, will they be better off with the option of driving Uber/Lyft, or better off in a world where Uber/Lyft is not an option?

gruez 6y ago
>There is significant evidence that long term unemployment REALLY hurts someone's hiring chances when applying for a job (see https://marginalrevolution.com/marginalrevolution/2013/04/co.. https://marginalrevolution.com/marginalrevolution/2013/04/co.... from 2013 with linked papers). But in the study linked, they're really testing whether a resume gap hurts your chances of getting hired. I'm skeptical that it would translate the same to gig economy job, given you can't ask them for a reference, nor is there any indication of how much you worked (did you work 40 hour weeks? a few hours a week?), or how reliable/timely you were.
- sudosysgen 6y ago
  This is a good point. Gig work is unfalsifiable and worth as much as a blank period to an employer trying to see if you are a good fit. Hell, you could lie and say that you were an Uber driver and there is literally no way for this to be verified.

sudosysgen 6y ago

It's also important to note that the 13.47$ an hour is heavily biased towards expensive cities, where it really isn't much, and is actually often under the minimum salary.

Skunkleton 6y ago
Its probably also worth noting that it is $13/hour while working. Your income will fluctuate heavily with demand, which further increases your risk. This of course is also true of taxi drivers.