Nearly two-thirds of Uber drivers use the ride-hailing service to collect additional income to supplement full- and part-time jobs. But in three large metropolitan cities, drivers make far less than the national average, about $20 per hour, after expenses.
|(Mark Ralston/AFP/Getty Images)|
In Detroit, drivers make on average $8.77 per hour.
In Houston, $10.75 per hour.
And in Denver, $13.17 per hour.
Those figures come from a report published by BuzzFeed News last week, which, based on what BuzzFeed said were leaked internal Uber payscale and driver history documents, estimates hourly wages after expenses, including vehicle depreciation, insurance, maintenance and gasoline.
Uber, using other internal data, performed recalculations using BuzzFeed’s expense formula and came to the above earnings numbers.
But even after all that convoluted math, labor groups think drivers earn less money. And Uber thinks they earn more, or at least earn money at a more efficient rate than typical workers do.
A Washington Post evaluation of BuzzFeed's analysis as well as other data and interviews found that drivers earned the following:
An Uber spokesman, who requested anonymity to discuss company policy, said the company is reluctant to estimate drivers’ expenses, since the app technically doesn’t employ its drivers. They’re considered independent contractors using the app as a service to connect them with riders.
As such, the spokesman said, how could Uber calculate expenses when drivers make individual choices for their vehicles? For example, perhaps one driver only works 10 hours a week and drives a Toyota Prius and another works 40 hours a week in a Chevy Suburban. Fuel expenses are wholly different between the two. Insurance costs are different. The cost of tires are different.
It would be wrong, or at least very challenging, he said, to calculate expenses with such a diverse clientele. Eliminate outliers in the data, he said, and average earning in Detroit, Houston and Denver could be higher.
But factor in taxes and miles driven without a fared passenger, and earnings are probably much lower, said Lawrence Mishel, president of the nonpartisan Economic Policy Institute.
Since drivers are independent contractors, they pay double the taxes on wages that typical workers do. They pay the portion typically reserved for employers along with standard payroll taxes. So add in another 7.65 percent in taxes.
Translate that into dollars and cents, and it cuts a full dollar out of a $13 an hour wage. With taxes alone factored in:
Detroit drivers make $8.10 an hour.
Houston drivers make $9.93 an hour.
And Denver drivers make $12.17 an hour.
That’s barely above minimum wage. In fact, it’s 40 cents below Detroit’s minimum wage.
“Uber likes to play it both ways,” Mishel said. “It claims that it’s the future of work, while it also emphasizes that most of the drivers work less than 10 or 12 hours a week. They want to be the wave of the future, but they also want to picture themselves and their drivers earning [extra] money.”
Plus, Mishel said, factor in the cost of miles driven without a fared passenger. Say you live in the suburbs but drive into the city to pick up fares. That’s extra mileage just to get to your destination. Then, say a passenger asked to be picked up across town. That’s another however many miles just to get them.
According to Uber’s internal measurements, about half of the hours logged into the app in New York City are spent without passengers in the car. And that’s in one of Uber’s busiest markets in the country. So even if we distribute that rate to less busy cities like Detroit, Houston and Denver, you have to double the expenses paid by each driver, which BuzzFeed worked out to $1.50 an hour.
So our new formula, is:
Hourly earnings = (BuzzFeed data) - (7.65 percent in taxes) - ($1.50 in nonpassenger expenses)
And that gives us the following:
Detroit: $6.60 per hour
Houston: $8.43 per hour
Denver: $11.21 per hour
In other words, not a lot of money.
Do you drive for Uber? Apply this formula yourself and let us know how much you make per hour.
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Here's How Much Uber Drivers Really Make
How much money do Uber drivers really earn? Since launching in 2009, the company has often changed its fares in the cities in which it operates. A driver's location, hours driven (including time of day/week), and personal expenses can all affect how much a person will earn picking up rides for Uber.
The question is further complicated because the studies seeking to answer that question over the years have each taken different approaches.
So we've reviewed several studies to get a handle on how much drivers make.The most recent earnings study comes from loan company Earnest, which used loan application data that included Uber earnings to show that Uber can be among the most lucrative platforms for "gig economy" workers.
Earnest found that the median Uber driver makes $155 a month — third most among the nine gig platforms surveyed. (People working with Airbnb and Lyft tended to earned more.) Meanwhile, the average Uber driver makes $364 a month — fourth most — suggesting some drivers are taking home the lion's share of possible earnings.Earnest did not ask drivers to say whether these figures were gross or net. (Expenses vary widely, but can subtract 20% to 30% of one's gross earnings driving for Uber.) The study also did not factor in how many hours individuals worked to earn this income, so we can't gauge how much drivers made on an hourly basis. Here were the totals for all platforms analyzed by Earnest, with Uber highlighted.
Harry Campbell, an Uber driver who runs the popular RideShareGuy blog chronicling the ins-and-outs of gig driving, told Money the Earnest study's findings were "a little low but in the right ballpark" of previous studies.Campbell recently conducted his own study, which polled 1,150 drivers from both Uber and Lyft. He found that the average Uber driver made $15.68 per hour before factoring in expenses like gas, maintenance, and depreciation. (Lyft drivers in the survey made $17.50 per hour before expenses, and reported much higher satisfaction than Uber drivers.) The study also revealed an interesting breakdown that showed hourly earnings on Uber and Lyft deteriorating by age.
Campbell surmised that the higher earnings among young drivers could "be a function of what hours were worked." Drivers can pick up more passengers and therefore make more money if they're willing to work during peak-demand periods, which often mean late nights on weekends.Uber charges different rates in different markets, and big, bustling cities tend to have more passengers in need of rides, so it makes sense that driver earnings have also been found to vary widely by city. This image from SherpaShare shows this breakdown from May 2015, and whether gross earnings (before expenses) had increased or decreased since January 2015.
To get an idea of how an individual driver's earnings are affected by changing one's location and company affiliation, Money spoke to a driver who wished to be identified simply as Matt, in his mid-20s. He recently moved from Raleigh, N.C., to San Francisco and switched from Uber to Lyft. Matt said he now makes nearly $20 an hour after expenses compared with only $6 per hour in North Carolina. He added that Lyft has seen a recent boost in ridership thanks to the #DeleteUber campaign that began after allegations emerged of sexual harassment at the company.
For even more background on how much Uber drivers make, consider a 2015 study funded by Uber, which found that in its top-20 cities drivers averaged more than $19 an hour in earnings before expenses. However, a year later, internal Uber figures provided to Buzzfeed showed that after expenses were factored in, drivers in three markets — Detroit, Houston, and Denver — earned only $8.77, $10.75, and $13.17 per hour, respectively.
Lately, Campbell says the overall mood among Uber drivers is improving. The company launched a "180 Days of Change" campaign in June to make the driver experience better, including the long-awaited addition of an option for passengers to tip drivers through the Uber app.
"I think turnover is still a big problem for Uber but it seems like they're getting serious about addressing some of the root causes," Campbell said. "They did more for the driver's experience on the first day of their '180 Days of Change' initiative than they have in a couple years so I'm optimistic that they will continue to improve the driver experience and improve retention."We reached out to Uber for comment on the findings in these different studies, and have not heard back from the company.
How much do drivers with Uber make?
So you’re thinking about driving with Uber. You like the idea of choosing your own hours, being your own boss, and making great money with your car. But before you get started, you want to know how much you can make as a driver.
How much do drivers make?
Here’s the short answer: You can drive and earn as much as you want. And, the more you drive, the more you’ll make.
Plus, you’ll receive your fares weekly and they are automatically deposited directly into your bank account. For even quicker payment, Uber has rolled out Instant Pay. Instant Pay lets you transfer your current earnings to a debit card account, anytime.
But really, how much can you make? First, let’s start with how fares are calculated when you drive with Uber.
How are Uber fares calculated?
When a rider takes a trip with you, they are charged a fare at the end of the ride. Each fare is calculated based on how far and how long the trip took to complete.
What is surge?
During times of high demand for rides, fares may increase to make sure those who need a ride can get one. For riders, surge helps ensure that pickup is available quickly and reliably. For drivers, surge means higher fares and a steady stream of ride requests.
Prices increase during times when many ride requests are made in specific areas of the city, and when there are not enough drivers in a specific area to accommodate the number of riders requesting. When you’re online, your app displays areas with high demand for rides in shades of red. The deeper the shade of red, the greater that area's demand.
Surge pricing is calculated by multiplying the trip’s total fare by a current surge multiplier. For example, a rider in a surging area may see and accept a surge multiplier of 1.3x or 2.1x. This surge multiplier applies to the base, time, and distance of the trip fare.
What expenses does Uber cover?
Drivers are responsible for their own expenses. Uber does offer every driver a commercial insurance policy with $1 million of coverage per incident.
From the time you accept a trip until the completion of that trip with the rider(s) exiting the vehicle, you have the following coverage:
- $1M of 3rd party liability
- $1M of uninsured or underinsured motorist injury
- Contingent comprehensive and collision insurance - so if you maintain comprehensive and collision insurance on your own personal policy, Uber’s policy will cover physical damage to that vehicle up to the actual cash value of the vehicle, for any reason, subject to a $1,000 deductible.
We hope and expect that riders treat your vehicle with care and respect, but if a rider were to cause damage or get sick in your vehicle, you are able to contact our support team for reimbursement for things like cleaning fees to get your car cleaned, for example.
How do drivers with Uber pay taxes?
As an independent contractor running your own business, taxes from your earnings are not withheld by the federal or state government. This means that it is your responsibility to file taxes at the end of each year.
If you earn $600 or more from using the Uber App during a calendar year, we use the banking and tax information associated with your partner account to send you a 1099 form by January 31st.
We’ve also added a new feature to the partner dashboard that gives every partner access to their tax materials, and every partner will receive a tax summary from Uber along with the link to their 1099.
Can you drive with Uber part-time?
Driving with Uber is perfect for a those looking for seasonal work, temporary work, part-time work or for those looking for a flexible full-time opportunity.
If you have a full-time job, Uber is an excellent way to work a few hours during nights or weekends to save up money for gifts, school or a vacation.
According to a national study, 80% of our partners drive fewer than 35 hours a week across 20 of our largest markets, and more than half only drive between one and 15 hours each week.