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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.
Nice to see a researcher as well as Uber being respectful and honest about their results. Everyone benefits from this type of transparency.
"Profit" means after expenses, not before.
They're getting somewhere between $18 and $20 an hour before expenses.
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.
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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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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.
Pretty sure the 3-10/hour already has new car money removed.
Also, one needs to save payroll tax, but the miles driven deduction takes care of most of the income tax (the number deducted is $0.25/mile over true TCO according to this study).
If the $10/hour number is fairly accurate, it's not a terrible option, not big money, but I can certainly see why people would do it. Of course I imagine it varies a lot regionally too (tipping culture varies a lot).
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They actually make $13.37 per hour.
That's the f'leet average?
Pain is merely failure leaving the body
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.
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.
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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So you only made $2/hour, net? How many hours did you work for Uber last year?
Offhand, I'd say 'too many.' I'm a bit curious as to how expenses are being calculated here, too--has the whole problem of it costing more to license and insure a for-hire vehicle somehow vanished without anybody mentioning it in the news? Or is the cost of getting all the legal paperwork perfect (proper tags, proper insurance) included in the math here?