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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.
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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They actually make $13.37 per hour.
That's the f'leet average?
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