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Researcher Admits Study That Claimed Uber Drivers Earn $3.37 An Hour Was Not Correct (fortune.com)
Last week, an MIT study using data from more than 1,100 Uber and Lyft drivers concluded they're earning a median pretax profit of just $3.37 per hour. Uber was less than pleased by their findings and used a blog post to highlight problems with the researchers' methodology. "Now the lead researcher behind the draft paper has admitted that Uber's criticism was actually pretty valid -- while also asking Uber and Lyft to make more data available, in order to improve his analysis," reports Fortune. From the report: The issue with the draft paper from MIT's Center for Energy and Environmental Policy Research (CEEPR), Uber's chief economist Jonathan Hall said, was this: The researchers asked drivers how much money they made on average each week from such services, but then asked "How much of your total monthly income comes from driving" -- without specifying that such income must relate to on-demand services. Of course, many people driving for Uber and Lyft also earn money from regular jobs and other income sources. And this, Hall alleged, skewed the researchers' results.
"Hall's specific criticism is valid," wrote Stephen Zoepf, the executive director of Stanford's Center for Automotive Research, who led the MIT study, on Monday. "In re-reading the wording of the two questions, I can see how respondents could have interpreted the two questions in the manner Hall describes." Zoepf said he would be updating the CEEPR paper, but in the meantime he recalculated the figures using a methodology suggested by Hall, and found that the median profit was $8.55 per hour, rather than $3.37, and only 8% of drivers lose money on on-demand platforms. Using another methodology, he added, the median rises to $10 per hour and only 4% of drivers lose money.
"Hall's specific criticism is valid," wrote Stephen Zoepf, the executive director of Stanford's Center for Automotive Research, who led the MIT study, on Monday. "In re-reading the wording of the two questions, I can see how respondents could have interpreted the two questions in the manner Hall describes." Zoepf said he would be updating the CEEPR paper, but in the meantime he recalculated the figures using a methodology suggested by Hall, and found that the median profit was $8.55 per hour, rather than $3.37, and only 8% of drivers lose money on on-demand platforms. Using another methodology, he added, the median rises to $10 per hour and only 4% of drivers lose money.
Obviously there's a difference.
And you have to add in the 50 percent skimmed off for Uber execs too.
-- Tigger warning: This post may contain tiggers! --
Nice to see a researcher as well as Uber being respectful and honest about their results. Everyone benefits from this type of transparency.
They actually make $13.37 per hour.
Ezekiel 23:20
Least important: they claimed that the causes of the error were that the respondents misread "income from on demand activities" as "income from all activities." The lead researcher admitted that could be misread and recomputed the numbers assuming his subjects were idiots.
Most important: The lead economist for Uber then made a bunch of assumptions when recalculating data. But the thing is Uber knows exactly how much each driver makes, how long each driver is working, exactly where they are, etc. If he wanted to correct the record, he could have. That he elected to use alternate assumptions to argue for a result indicates that result is overly optimistic.
Your ad here. Ask me how!
1) What were your hours?
2) What was your income?
3) What were your costs?
Ta da!
This just makes me wonder what researcher body part they threatened to cut off. I guess the fact is we still don't know how much an Uber driver makes, but it can't be much. They may be laughing as they buy a new vehicle and appear to be paying it off, but then that vehicle starts to get old and needs repairs and only a few years in do they find out what they really make. You have a car loan to be paid off and a car that needs constant repairs. It really depends where in the timeline the people being surveyed are.
Laws are rules for the court, but merely a bottom bar to hit for life. Think beyond laws in your actions always.
...all the slashdotters that said drivers are bad at math and lose money were wrong too? It can't be!
The MIT researcher was a little bit too eager to release his findings. Although Uber may have not been very nice to its drivers/customers/employees in general, but it wouldn't go as far as crossing the minimum wage line because if it did, all of its executive management would be in jail.
Having said that, if the researcher found the earning to be at $3.xx per hour, he should have gone back and done extensive revisions to make sure his data wasn't lying. I suspect that the number of drivers participating in his research, and their full/part time status combined may have caused his analysis to go way too low. Best example would be a driver who only drives on the weekend, 4 hours each day. This driver's earnings, if used to describe his only income, then of course the study has gone wrong.
There seems to be a thing among the progressive / neo-liberal camp that requires them to screech down at any occupation or practice that they, from their loftier economic perch, would not personally engage in. Hey, I don't want to be an Uber driver either. It's fine. I have several friends who do it for extra cash (or, in one case, because they actually enjoy it - weird, but that's their thing), and none of them are anywhere near dumb enough to do it for a net of $3 and change. That number should, literally, be unbelievable, and yet many people believed it anyway because it fit a highly (absurdly) hyperbolic narrative. There are two problems here: 1) that these people need to be more skeptical (especially when such strong confirmation bias is involved), and 2) they need to check their fucking privilege. Not everybody has the immediate option of an awesome job, has good spending / saving habits, etc. Just because you wouldn't do something doesn't mean that nobody else should, and fabricating evidence to the contrary is both dishonest and cruel.
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41% of their drivers make less than min wage and 4% make nothing.
So even if you game the numbers (by changing the survey questions, which is how Uber got those numbers) you still get a shit sandwich...
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So instead of $3.37 the Uber drivers are averaging $10.00. Big fucking deal. Long again in a different life I worked as a "self-employed contractor" doing delivery/pickup of airfreight & the money sucked. However, there was a lot of work & when I put in the hours & busted my ass I made decent money. Not paying my taxes made it seem life even more money. That, of course, caught up with me.
So if an Uber driver busts their ass they might make some scratch. But after a year of that their car & body will be burned out. Will there be savings (at $10 an hour) to buy another car? If there is really any money in this, it will not go to the drivers
SLOWER TRAFFIC KEEP RIGHT
Am I incorrect in seeing the follow up discussion and articles as the appropriate thing that happens? Someone says something, it's not correct, they issue a correction?
Seems pretty reasonable, but keep beating that drum. Trump will make you a unionized coal miner in no time.
It shouldn't be up to someone else to do your work for you. Why does someone else need to double check some MIT researchers work? According to them, they are all geniuses. Do your research properly.
But since it pushed a desired narrative, it wasn't questioned.
It's being questioned now. Isn't that good enough for you?
except uber claims $16/hr while this study concluded $8.55
Uber knows the amount they sent to the drivers. That's only one of several important numbers. Most importantly, they don't know what the drivers' expenses were.
Since we're trying to get a "per hour" figure, the "hours worked" is critical, and Uber doesn't have that information. I can log into Uber and click for it to let me know when there are riders in the area. While I sit in my living room watching TV. That doesn't look much like working. Other people may wait at a gas station until a rider is ready. That's working. At least half the time, Uber doesn't know whether I'm working for someone else, getting paid by my boss, whether I'm playing video games with my kids, or I'm working by waiting outside a concert venue until people come out and need a ride.
Uber also doesn't know how much I made from Lyft at same time I was logged in to Uber.
But since it pushed a desired narrative, it wasn't questioned.
It's being questioned now. Isn't that good enough for you?
It already has been questioned (by Uber), the researchers issued a me culpa, and they're re-doing their analysis to fix it. And yes, that's good enough for anyone -- except the OP.
Fake news is written by fake reporters. It is a deliberate fabrication, intended to cause fear, anger, or confusion. It is never (well, rarely) retracted by its author after it is debunked. It is not the same as editorial commentary. It is not the same as news with errors that get corrected. It is not even the same as news reported with a bias. Fake news is fake.
If it weren't for deadlines, nothing would be late.
except uber claims $16/hr while this study concluded $8.55
With all the effort and expense that Uber drivers put into their vehicles, we can either look at "studies" to gauge earnings, or presume that most Uber drivers are not irrational self-deluded actors driving themselves into poverty by working for less than a Walmart stock-boy.
Sure, there's more flexibility with Uber than Walmart, but only those who do it as a hobby would do it for $3 or $8 an hour (as a median of the curve from $0 upwards - there will always be outliers).
As these drivers tend to be entrepreneurial in spirit and safe drivers, we can presume above-average sensibility.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
I have several friends who do it for extra cash (or, in one case, because they actually enjoy it - weird, but that's their thing), and none of them are anywhere near dumb enough to do it for a net of $3 and change. That number should, literally, be unbelievable, and yet many people believed it anyway because it fit a highly (absurdly) hyperbolic narrative.
We'll no one would work for a check that comes out to $3/hr, but lots of people work for net N dollars where they get paid P dollars and have to incur E incidental expenses, where E is on the order of N. Because the expenses are incurred at a different time and not necessarily for direct expenses, they may not be considered in the true earnings equation. Uber is one example. How many drivers actually sit down to calculate their total profit after expenses on a spreadsheet? Working, married moms are another example, where the taxes at the husband's high marginal rate coupled with child care expenses often yield surprisingly low net true earnings.
Peer review only works if you don't have a confirmation bias. If you do then it's not peer review, it's groupthink.
But the thing is Uber knows exactly how much each driver makes, how long each driver is working, exactly where they are, etc. If he wanted to correct the record, he could have.
He did, using generalities, instead of the HIGHLY PROPRIETARY information no other company would give away in detail either.
Also providing some kind of "average income" for a service like Uber is absolute nonsense, with such a mix of workers - some are just doing it here and there for fun, some are serious professional drivers who know how and where to work surge pricing to maximum advantage. An average in such a scenario tells you pretty much nothing.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
There seems to be a thing among the progressive / neo-liberal camp that requires them to screech down at any occupation or practice that they, from their loftier economic perch, would not personally engage in. Hey, I don't want to be an Uber driver either. It's fine. I have several friends who do it for extra cash (or, in one case, because they actually enjoy it - weird, but that's their thing), and none of them are anywhere near dumb enough to do it for a net of $3 and change. That number should, literally, be unbelievable, and yet many people believed it anyway because it fit a highly (absurdly) hyperbolic narrative. There are two problems here: 1) that these people need to be more skeptical (especially when such strong confirmation bias is involved),
I, like many others, were very skeptical of the figure, but thought it could be possible if a) the expenses were not obvious, and b) the median Uber driver didn't stick around long after they figured out the full cost, and/or c) a lot of people didn't mind working for a pittance (or they worked in such a way that a pittance was fine).
and 2) they need to check their fucking privilege. Not everybody has the immediate option of an awesome job, has good spending / saving habits, etc. Just because you wouldn't do something doesn't mean that nobody else should, and fabricating evidence to the contrary is both dishonest and cruel.
Doesn't #2 contradict the supposed implausibility of the $3.37 figure?
Besides, I think this shows a great advantage of the "progressive / neo-liberal camp". If you come to us with evidence that we're wrong we'll generally acknowledge it (at least more so than other camps).
I stole this Sig
Thank you for posting this. I hadn't heard of it before, and after looking at it briefly it seems like I should have.
Hmm, I wonder why the media isn't running with this story?
QAnon is a hero.
still make less than minimum wage. That drives my wages down (and yours too). These Uber drivers aren't dumb, they're desperate and unlucky. They know they're getting screwed and the first chance they get they'll take a real job with real benefits. Ones like you and me have. Ones that will now pay less because we're competing with sub-minimum wage employees who also have no benefits.
Also if you're not willing to abandon 41% of the population to abject poverty that raises my taxes (to subsidize the low wages).
This has absolutely nothing to do with feelings. This is about the cold hard reality of our economic system. Stop using straw man arguments. They work, but not in your favor. You'll get screwed by Uber and the gig economy along with the rest of us.
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And the less common, but still valid example of working, married dads, where the taxes at the wife's high marginal rate coupled with child care expenses often yield surprisingly low net true earnings.
Seems pretty quick for a correction to be published. Maybe the researchers were threatened with loss of grant funding, limited career opportunities, litigation, etc in some way.
Also, maybe some associated (top executives, VCs, banks, etc) with Uber and/or Lyft are large financial supporters of MIT.
A much more likely scenario is that, since not all costs are immediately visible, the drivers are simply bad at estimating their real costs.
The real "Libtards" are the Libertarians!
Wait...they restored the communication links to the secret child slave colonies on Mars? Excellent news!
That's how science works. Someone writes a paper, someone else reads it and points out problems such as here where 2 questions weren't clear, paper gets adjusted, repeat. Not much different then software development where you write code, someone else reviews it and you fix (or argue that you're correct) any problems the reviewer found.
Not everyone is perfect and mistakes aren't fake news.
https://en.wikipedia.org/wiki/Inverted_totalitarianism
I have some news from the real world for you. People work for that and much less every day. I've gone as low as $0.40/hr.
Thankfully I got a job cleaning toilets and mopping floors for $10/hr. Way better money than coding.
MIT's data is limited because Uber won't release stats. That means the MIT guy ran a survey with questions. By changing the questions you can get different results. That's basically what's in contention here is the questions being asked of the drivers. We'd need Uber to open up their books to know what's really being paid.
I'm assuming you don't live in America. If you do you're kind of naive. There is virtually no one enforcing labor law in this country. If there was this MIT study wouldn't exist. Uber would be required to open up their books to prove they pay minimum wage. They're not, hence the reason why we're debating the methodology of an MIT survey vs working off actual data.
If Uber really wants to prove what they pay they can release hard numbers in their SEC filing (where lying is a crime that is actually enforced, since it could hurt the shareholders). Me? I'm inclined to believe that original $3.37 number. It's probably worst case, but if the worst case wasn't what's happening why does Uber work so hard to hide their numbers?
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There seems to be a thing among the progressive / neo-liberal camp that requires them to screech down at any occupation or practice that they, from their loftier economic perch, would not personally engage in.
Well, duh. That's why they're called progressives. They're the only ones that know what's right, and what direction to go to get there.
That's fucking stupid. I've done everything from warehouse work, to delivery driver, to picking strawberries on my fucking knees, all the way to being a well-paid software developer in my lifetime. Your strawman "liberal" does not exist and you should be ashamed of yourself for advancing. But I know you won't, because you're a fucking faggot. Shut the fuck up.
Progressive and neo-liberal are almost polar opposites on the political spectrum. Why would they form a single camp?
...the human condition. If everyone was aware of risks and costs than pyramid schemes like Amway never would have existed, much less be going strong after 60 years. Uber isn't a pyramid scheme, but Uber-fart sniffers need to remember that there will always be a pool of desperate people willing to to take what Uber gives them if they lose their job or simply need to make more money.
Uber-fart sniffers like to bitch about traditional taxi companies, but said taxi companies need to make a profit. Whereas Uber, through the miracles of venture capital, can operate while losing billions a year based on the hope that they drive taxi companies out of business by the time self-driving cars are practical, at which point Uber can fire all their hard working employees, I mean sever ties with their "independent contractors".
dictatorship = waterfall
democracy = peer review, agility, flexibility
commercial = crooks
While the study isn't fake news, the negative impact is still there. The number of people who see the incorrect clickbait headline far exceeds those who saw the correction. While this has always been a problem in news and politics, I hold researchers at a prestigious university to a higher standard.
While probably no one would work at USD $3 if told beforehand (and now that the $3.37 is largely of suspect...) I wonder if many that dropped out of share-riding earn significantly less because they performed much poorer than they thought they can, probably through misjudging their map reading or driving skills.
Purely an personal anedote : One of the more "memorably horrible" driver that I hailed through Grab (a competitor of Uber around here) was just In later conversations in the car, it's clear that this Chinese immigrant does not speak English at all and is such a poor reading of English road names that she clearly does not read the Map nor take GPS instructions that was fed to her as well. An order that should have taken her 8-12 minutes to fulfill for $5 (around USD $4) eventually took over 50 minutes of driving. I "of course" have to guide her all the way home.
I'd be surprised if she manage to grosses zero dollars a day after deducting basic fees and fuel costs(let alone insurance and wear and tear). And I'd believe there's a large enough subset of such people will quit this gig in no time but they're constantly in large enough numbers as fresh adopters, to pull down averages significantly.
As for drivers of that provided came quickly and serviced without any issue, almost all of them said that the riding money is good when I asked.
**I come from a place where having a car is still deemed to be of status and gives face and thus have many people (esp. man) that obviously shouldn't have a car struggle to keep one, considering our convenient public transport. Many of those are not good drivers, and some also perhaps totally misjudged their driving / map-reading ability and thus their earning potential when they started (Over 80% of drivers think they are better than average on the road, old saying says).
What standard would that be, exactly? Omniscience? Or are they allowed to be wrong sometimes, but not when you care about the subject matter? Higher standard, forsooth. The only thing different about scientists is that they're more often expected to own up to their errors. Next time you could spare us this pointless nonsense.
I am sure most will not include writing of their car and perhaps not even the insurance as they have to pay that anyway. Fuel will be the only thing that will be calculated by most.
The thing is that many people do not understand the difference between profit and income.
Don't fight for your country, if your country does not fight for you.
But since it pushed a desired narrative, it wasn't questioned.
What was a real hoot was seeing the Hatorade drinkers try to argue a contradiction: that Uber pays so little that nobody will drive for the company, while at the same time being so dominant that it's driving mass transit systems out of business.
If Uber cares that much about their reputation, then perhaps they shouldn't be operating an illegal and unregulated taxi service.
People are going to buy into things like this when it comes to Uber simply because they're an illegal taxi service that depends upon being allowed to break the law in order to exist.
Nice straw man you just threw up there, snowflake.
The problem with Über is that the company tells people they can make significantly more money than they can and, before people realize it, they have made costly commitments and are trapped.
Now, obviously you have been triggered. So, go lock yourself in your safe space and turn on Fox and Friends.
What a shocker that a right-winger has no problem with companies that exploit desperate people.
in this case law should be broken, taxi drivers should be earning minimal wage, and not a cent more, because it is minimal wage job, like working in Target or McDonalds, does not require any special skill, and only reason it is payed as high is too much regulation
as consequence taxi costs to much compared to other services like McDonalds or electricity or hairdresser
what Uber is doing is what every other business should be doing, putting their customers first and their employees second