Uber Drivers and Other Gig Economy Workers Are Earning Half What They Did Five Years Ago (recode.net)

According to a new study by the JPMorgan Chase Instittue, drivers who transport people via apps (e.g. Uber, Lyft, Uber Eats, Postmates) made 53 percent less in 2017 than they did in 2013. Recode reports: The average monthly payments to those who worked for a transportation app in a given month declined to $783 from $1,469. Meanwhile, people working for leasing apps -- Airbnb, Turo, Parklee and other apps that let you rent assets like your home, car or parking space -- saw their incomes from those platforms rise 69 percent to $1,736 on average.

This is happening as online gig work has become more popular, thanks in large part to the growth in the number of transportation jobs. The share of the working population that has participated in the online gig economy at any point in a year rose from less than 2 percent in 2013 to nearly 5 percent in 2018. There are a number of potential reasons why the average pay for gig economy drivers has gone down. It could be any or all of the below, according to JPMorgan: drivers on average are working fewer hours; demand hasn't increased to meet the increased number of drivers; trip prices have fallen; or platforms are paying drivers lower rates.

Comments

That's not necessarily true either

[rsilvergun]

nobody knows since the data is _only_ monthly. It's just as likely that there are so many Uber drivers now that they're crowding each other out and nobody can make a living. Well, strike that, it's more likely. That's why medallion systems were created in the first place, e.g. to make sure the streets weren't flooded with drivers every time the economy dipped.

Re:It was clear from the start they were burning c

[SethJohnson]

I'm not even sure why they would think they'll be able to replace taxis and occupy a Monopoly position that would allow them to increase rates. Are they blind to the fact that their very own model could be used to unseat them if they were to try to act like a city taxi service

You're assuming the business model was not flawed from the outset and because of that, you're interpreting their motive to be more brilliant than it appears to be. Please review the venture capital, and stock market dumpster fire (fueled by investor hundreds of $millions) called MoviePass.

There are a lot of business people who think by sheer force of money, they can disrupt an industry and eventually own the kingdom. In the case of Uber, their investors were racing in a land rush to become such an immense 900lb gorilla that no other competitors could challenge them... they expected to own the consumers and the service providers. As you point out, the free market has stepped in and eliminated the opportunity for Uber.

Re:It was clear from the start they were burning c

[hairyfeet]

Actually MoviePass? If you look at its history it started out making a modest profit but its a classic case of because something worked LOCALLY does NOT mean it would work nationwide.

MoviePass originally started out in San Francisco where with the sky high costs of...well frankly being in San Fran at all, made a lot of movie theaters seriously hurt for butts in seats. The guys that started MP noticed this and made deals with several local theaters to offer them deeply discounted seats because...well having SOME money is better than NO money and it costs the theater the same to show the movie to 10 people or 100 and the duo had a reasonable price for the service, closer to what Amazon Prime costs. These two factors made them a modest if not "VC worthy" profit.

But then came a new CEO who thought he could "pull an Amazon" and went nationwide with NO deals with the theaters AND at a price so low that even if they had the same deal the original duo had (who IIRC wisely cashed out when they heard the "new business plan") would never make a red cent and...yeah surprise surprise dumb business plan? Is dumb.

The sad part is if they kept the original model and simply expanded to other cities with high costs of living and a glut of movie theaters? They could have had a modestly successful little franchise, but that model simply wouldn't work in places where theaters have no issue getting customers.