Driving for Uber or Lyft Is Awful, New Study Shows

Uber drivers cars are parked outside the Ministry of Transportation building during a protest in Taipei

Uber drivers cars are parked outside the Ministry of Transportation building during a protest in Taipei

A new report from the MIT Center for Energy and Environmental Policy Research found a full 30% of Uber and Lyft drivers are actually losing money while working due to costs associated with the job.

As a working paper, it's important to note the figures haven't been peer-reviewed and are subject to change. While consumers are getting a good deal, the drivers behind the wheel are making considerably less than minimum wage after factoring in expenses. That information was compared with other factors like the cost of insurance, vehicle maintenance and fuel, the study says. The mean monthly pretax profit for drivers is $661, while the median profit for a month is just $310.

Uber could not be reached at time of writing, although earlier a spokesperson told The Guardian it reckoned the study's methodology and findings were "deeply flawed".

Motorists making some extra cash by hauling around Uber or Lyft customers are mostly earning less than minimum wage, and almost a third of ride-hailing drivers are losing money behind the wheel, according to researchers at the Massachusetts Institute of Technology.

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"At an average of $661/month in net profit per driver and with hundreds of thousands of drivers in the USA alone, the standard mileage deduction facilitates billions of dollars of untaxed income, and hundreds of millions of unrealized tax revenue", the paper notes. "Because of this deduction, most ride-hailing drivers are able to declare profits that are substantially lower", the paper stated.

"This paper provides one of the first detailed estimates of ride-hailing profit", researchers said. Many, however, are confused by the statement, as MIT is no second-rate institution, and the findings are corroborated with thousands of drivers who can confirm these findings. The finding: median before-tax profits were a shocking $3.37 an hour.

The paper also received some scrutiny from Harry Campbell, founder of The Rideshare Guy, an industry blog.

Independent studies on driver earnings are rare. Existing surveys also tend to focus on hourly rates rather than per-mile rates; nearly none of them look at driver costs. "It's quite possible that drivers don't realize quite how much they are spending", Zoepf tells the Guardian.

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