Leaked Docs Provide An Unprecedented Look At Income Of Uber Drivers (buzzfeed.com)

In 2013, Uber told the Wall Street Journal that a typical Uber driver takes in more than $100,000 in annual gross fares. The ride-hail platform, which has shared similar estimates many times since, says that the company's efforts toward its drivers is a pathway to a modest, more attainable American dream. Turns out, the it has been exaggerating. According to BuzzFeed News, which obtained leaked documents, drivers in some markets don't take home much more than service workers at major chains like Walmart when it comes to net pay. According to the publication, drivers in three major U.S. markets -- Denver, Detroit, and Houston -- earned less than an average of $13.25 an hour after expenses. From the report:Based on these calculations, it's possible to estimate that Uber drivers in late 2015 earned approximately $13.17 per hour after expenses in the Denver market (which includes all of Colorado), $10.75 per hour after expenses in the Houston area, and $8.77 per hour after expenses in the Detroit market, less than any earnings figure previously released by the company.

Comments

What, me exaggerate??

[inode_buddha]

Of course the exaggerated. I've been watching companies do this my whole life, it seems par for the course.

The large print giveth, and the small print taketh away. Because of this, I would never work for a franchise outfit like Uber; instead I would file a 1099 and use my own SSN for the business number (sole proprietorship) and actually work for myself.

Bad reporting.

[gurps_npc]

If you start out talking about "100k in Gross Fares" then reveal that number was wrong, you need to tell us what the actual GROSS FARE was. Switching to take hour earnings, after expenses is the mark of an incompetent statistician, and a poor journalist. At the very least.

For those of you that did not read the article, they claimed that expenses were 25-33%, so at 100k, that would be somewhere between 66 and 75k, assuming 60 hour week that would have been $22 an hour, far more than the current claims of $13.25 (which sound exaggerated to me.)

Re:Bad reporting.

[Anonymous Coward]

The point is that Uber deliberately chose that number to make it seem like it was giving its drivers a fair deal. When most people see that, they think that the driver is making $100k pre-tax, so that their income is that number minus taxes.

This new number shows to what extent Uber has externalized its operating costs onto its drivers. That a company worth a staggering $62BN should do this is reprehensible. It is truly a business model built on finding ways around all rule of law (labor law, insurance law...). I'm guessing they attract investment because investors think Uber will do this successfully.

Re:Bad reporting.

[NoNeeeed]

The $13.25 is a calculation by Uber, not by the journalist. The journalists re-ran some of the calculations and got slightly lower figure.

"Internal Uber calculations, provided to BuzzFeed News by Uber, based on data spanning more than a million rides and covering thousands of drivers in three major U.S. markets — Denver, Detroit, and Houston — suggest that drivers in each of the three markets overall earned less than an average of $13.25 an hour after expenses."

Assuming Uber are not lying about the $13.25, that would still mean that if you worked 40 hours a week, every week of the year, you'd make $27,560 a year.

Whether this is a good or bad depends on how much ordinary taxi drivers make for a similar amount of work.

Uber has frequently talked about how much a driver's gross income will be as a way of encouraging people to join up, which is a nice bit of marketing, and standard practice for companies like Uber.

Re:Bad reporting.

[Anon-Admin]

Actually, you missed something and at @$100,000 it breaks down as follows assuming no state income tax.

Gross @ $100,000
Federal Taxes = $18,184
Social security = $12,400
Medicare = 2,900
25% in expenses == $25,000

Leaves $41,516 or a profit of $798 a week, If the state has an income tax it changes those calculations some.

as a 1099 self employed you are responsible for all of the above.

Re:Bad reporting.

[stephanruby]

If you start out talking about "100k in Gross Fares" then reveal that number was wrong,

One problem is that this 100k figure was quoted in 2013 (and I assume it only covered year 2012 for a Uber driver, to make the company look as good as possible).

We're now in 2016, and the article compares the 2013 (2012 year) to a calculation done for the 2015 year. The problem is that Uber has lowered its base rate since that quote in 2013, flooded the market with new drivers since then, added UberPool in some regions with an even lower base rate (and increased risks for drivers who don't get the per person safety fee that Uber collects despite the fact that drivers make that many more stops when pooling), and in addition to that, Uber has increased the commission percentage it took from drivers. In other words, Uber drivers that used to drive around that 2012 period used to make a lot more and are super upset at the company (and for good reasons).

That being said, I have no reason to believe that Uber lied to the Wall Street Journal in 2013, and to imply that Uber did, is just lazy click-bait journalism. And I really do mean lazy. It's not like there is a shortage of Uber drivers that you can interview (all Uber drivers know this stuff, even the new ones). And that so-called Buzzfeed reporter could have just called an Uber driver to get a reaction on that story, or just plainly have done a google search on ridesharing bulletin boards, where all of this is talked about in thousands of bulletin threads. But that writer did no such thing, neither did her Buzzfeed News Data Editor listed next to her byline, which brings me to another point.

Buzzfeed staff are probably paid very little to nothing at all (one would surmise). If paid something, they're probably paid on the amount of controversy and clicks they can generate, not on the amount of time the spent researching the topic. There is obviously little to no quality control done on each article and no double-checking of any kind. And Buzzfeed readers are actually dumber for having read Buzzfeed than not having read it.

Re:Bad reporting.

[whoever57]

That a company worth a staggering $62BN should do this is reprehensible.

You have things backwards. The company is worth $62B because it has externalized its costs.

Taxis

[Major Blud]

Looks like they make less than they do driving a taxi full-time in Denver....

"The median annual Taxi Driver salary in Denver, CO is $33,803, as of May 31, 2016, with a range usually between $28,077-$41,255 not including bonus and benefit information"
http://www1.salary.com/CO/Denv...

At $13.17 an hour, 40 hours a week, 52 weeks a year, an Uber drive in Denver would pull in $27,394 at that rate, and that's WITHOUT benefits and bonuses.

There's a lot that I' assuming here, like a person working strictly full time as an Uber driver.....but if you were going to work strictly as a driver, you'd probably be better off driving a taxi.

Similar to DoorDash

[rgbscan]

I used to track all my DoorDash deliveries to a T. That gig earns $11.21 an hour in the Minneapolis/Saint Paul market on average. I'd be happy to share my data spreadsheet with anyone interested.

Re:Uber income

[TapeCutter]

They won't buy you a car but they're eager to sell you one on dubious credit terms..

Obviously..

[laxguy]

Did anyone really think that being an Uber driving was the new American Dream??

Re:Obviously..

[houghi]

I am not even sure what the American Dream is. I see one person making a calculation on a 60 hour week and another a working year of 52 weeks.

As a European that sounds more like a nightmare. I rather have my 38 hours per week and 45 weeks per year. That way I can actually live my life and not just dream about it.

But then if the American Dream is to work as much as possible, more power to you. Just do not be surprised if people are less jealous of your dream.

Re:Obviously..

[alvinrod]

I always thought that the American Dream meant that it didn't matter if you were poor or came from nothing in the United States because you were afforded the freedom to pursue your own ambitions and that your hard work could give you a better life. It doesn't mean that you'll be successful in your endeavor only that you can try and if it works you'll be able to keep the fruits of your labors. There are still a lot of people who immigrate to America and do improve things for themselves and their family, but they probably do need to put in 60+ hours in order to achieve that.

I don't think it's really something that's unique to America either. Plenty of people immigrate to Canada or European countries for much the same reasons and similarly build better lives for themselves, but the name dates back to an earlier time in America's history when a large number of people (typically Europeans) were immigrating to the U.S. for a variety of reasons so the name has stuck.

Re:Uber income

[mvdwege]

Ah, the return of the company store.

Really, given the facts on display and a history of the 19th century only a few clicks away, why exactly does Uber still have defenders?

Re:$13 and hour and my car is a tax write off?

[whoever57]

with all the miles they drive and the time on the app their car and smartphone plan might as well be free. if i was an uber driver i'd get the top AT&T or Verizon plan to share with my family

A good accountant will tell you that you can't do that. You could only write off a portion of the cellphone plan.

And why are you surprised?

[MikeRT]

Driving people around is a marginally skilled luxury service that in theory a teenager with 1-3 years of personal driving experience could do. Heck, a 20 year old born and raised in an area can probably do it more competently than an older "more experienced" driver who hasn't lived in the area that long.

This is like the outrage that McDonalds workers, people who make $2 hamburgers, are the lowest men and women on the food industry totem poll in terms of wages. Forget automation; if your job is something that a 19 year old high school dropout who fits the stereotypes can do as competently as a "20 year veteran," you aren't going to make much money because the barrier to entry and value of experience is minimal.

It's like going back 100 years and complaining that "senior ditch digger" doesn't pay substantially more than "junior ditch digger."

Re:And why are you surprised?

[TheSync]

Driving people around is a marginally skilled luxury service that in theory a teenager with 1-3 years of personal driving experience could do.

Thanks to automation (GPS/Waze/Google Maps), now you don't event need to know anything about directions to drive a cab/rideshare. 30 years ago, you needed deep geographic and traffic knowledge. Thus it has become a less-skilled job.

Did anyone actually believe the $100k number?

[zerofoo]

The job market is exactly that - a market that sets wages.

Rare, highly sought skills command high salaries. Driving a car is not one of those skills.

No one should expect a person driving people around in a car to make $100k a year. That's crazy.

If people willingly want to work for Uber at those wages - what's the issue?

Re:Uber income

[DahGhostfacedFiddlah]

Really, given the facts on display and a history of the 19th century only a few clicks away, why exactly does Uber still have defenders?

Because the taxi racket has been enjoying its monopoly for too long. Where I am, we have some of the highest taxi prices in Canada while many the taxi drivers are near minimum wage (because the drivers rent the licenses from the people who could actually afford them). An Uber driver told me he makes more money on Uber than he did driving a cab, although I didn't ask if that factored in vehicle wear'n'tear.

Everyone I know had pretty much stopped taking cabs because they were so unreliable. You could end up waiting an hour longer than claimed, or the cab just wouldn't show. Uber has effectively brought taxis back into our lives as a viable option.

From everything I've heard, Uber takes advantage of its workers and uses some pretty shady tactics. I support government regulation to ensure drivers can make a decent wage. But they've disrupted a market that desperately needed disrupting and have noticeably improved my personal standard of living.

So given the choice between Uber and the previous status quo? Yeah, I'm an Uber Defender, if a cautious one.

Re:Uber income

[rockmuelle]

Interesting what you did there, calling the $13.00 after expenses a "profit". What's left out in the expenses is the salary for the contractor. That $13.00 is their take home pay after the expenses of running their car. So, if you have zero living expenses and don't eat, then sure, call it profit. But since Uber drivers are humans, they actually need food and shelter. Some of us also think that all humans should have a decent standard of living and have a decent work/life balance, not just those of us that can make six figures surfing the web all day and occasionally banging out a few lines of code.

$13.00 take home pay equates to roughly $26k/year (using the standard 2000 hour work year that every software person I know uses to compute their "salary" based on their consulting rate). The poverty line in the US is roughly $23k.

tl;dr: the $13.00 is not profit, it's salary; $13/hr won't even let you save and the US deems that salary the bare minimum to just scrape by. Working more destroys the work/life balance.

-Chris

Re: Uber income

[ShieldW0lf]

How many "jobs" let you decide you don't feel like working this week with no consequences?

How many "jobs" let you decide on the spur of the moment that, because your plans fell through, you're going to work for an hour and make some extra cash?

Uber isn't a job. It's a way for people who have a stable income to pick up a little extra cash. Uber drivers deserve to be paid practically nothing. They are not taxi drivers, who commit to serve an area on a predictable and reliable schedule, and do not deserve to be compensated as though they were.

Re: Uber income

[The-Ixian]

How many "jobs" let you decide you don't feel like working this week with no consequences?

UPS is one

When I worked as a loader (in the local Teamsters union) I got 100% medical and dental benefits, got $15/hour and the official policy was that if you don't show up WITHOUT CALLING IN for 4 days in a row, that was grounds for termination (it was *grounds* for termination... but I rarely, if ever, saw anyone fired)

I personally saw, several times, people not call in and not show up for a week at a time. Then they would show up when they needed money.

Because of the benefits and short hours (no full time employment and anything over 4 hours in a single shift is overtime, which was almost never authorized) there were a lot of people who had their own businesses during the day and just use UPS for the benefits.

I was going to school at the time and UPS also kicked in a few thousand per semester for that.... I always recommend UPS to people... it amazes me how many people turn their nose up at it.

Re:Uber income

[GLMDesigns]

Not in the slightest. People own the car anyway. They have a few hours in which they would like to make some money - and now, through Uber, they can. They can sit in their car watching a movie or reading a book until a car comes and then make some money. No work. No fuss. Until there is a fare. Then you go, make some money and then go back to your book or movie.

Some people might actually like having a part-time job that they go to WHEN THEY FEEL LIKE IT.

It has its advantages. If you don't like it - don't do it. If you use the service and feel that way then tip better.