The vast majority of Uber and Lyft drivers are earning less than minimum wage and almost a third of them are actually losing money by driving, according to researchers at the Massachusetts Institute of Technology.
A working paper by Stephen M. Zoepf, Stella Chen, Paa Adu and Gonzalo Pozo at MIT's Center for Energy and Environmental Policy Research says the median pretax profit earned from driving is $3.37 per hour after taking expenses into account. Seventy-four percent of drivers earn less than their state's minimum wage, the researchers say.
Thirty percent of drivers "are actually losing money once vehicle expenses are included," the authors found.
The conclusions are based on surveys of more than 1,100 drivers who told researchers about their revenue, how many miles they drove and what type of car they used. The study's authors then combined that with typical costs associated with a certain car's insurance, maintenance, gas and depreciation, which was gathered in data from Edmunds, Kelley Blue Book and the Environmental Protection Agency.
Drivers earning the median amount of revenue are getting $0.59 per mile driven, researchers say, but expenses work out to $0.30 per mile, meaning a driver makes a median profit of $0.29 for each mile.