Business

Study puts Uber drivers' pay at $9.21 per hour

That's less than minimum wage in many of the biggest markets where the ride-hailing service operates, the analysis by a pro-labor think tank said.

May 18, 2018 at 12:46AM

Most drivers for Uber and Lyft work part time to supplement other jobs. Their estimated $9.21-per-hour take-home pay puts them in the bottom 10 percent of wage earners. (The Minnesota Star Tribune)

A new analysis of Uber drivers' wages finds that they take home about $9.21 an hour, less than minimum wage in many of the biggest markets where the ride-hailing service operates.

The analysis, by the pro-labor think tank Economic Policy Institute, builds on a recent MIT study that at first said that Uber drivers made an average of $3.37 an hour, then revised that figure to a median $8.55 an hour.

Uber economist Jonathan Hall rejected the MIT study's findings in March and released the San Francisco company's own per-hour figure after expenses: $13.04.

The new calculations released this week are derived from the MIT study plus newly available administrative data from Uber, according to Lawrence Michel, former EPI president and now a distinguished fellow at the institute.

"The low pay and small economic weight of Uber and the gig economy overall, coupled with the fact that Uber drivers and other gig workers are mostly working on a part-time basis as a way to earn supplementary income, argue for a change in perspective," Mishel said in a news release on his analysis. "There is a lot of hype around Uber and the gig economy. But in any conference on the future of work, Uber and the gig economy deserve at most a workshop, not a plenary."

Among his other findings:

Uber drivers' wages break down this way: After deducting fees and expenses, they make an average of $11.77 an hour. After deducting mandatory Social Security and Medicare taxes, that figure goes down to $10.87 an hour. After additional deductions, Mishel arrives at the final figure of $9.21 an hour.

About a third of what passengers pay goes to Uber for commissions and booking fees.

The $9.21 figure puts Uber drivers at the bottom 10 percent of wage earners. It "falls below the mandated minimum wage in nine of 20 major markets, including the three largest," which are Chicago, Los Angeles and New York.

Because of Uber drivers' part-time status, the 833,000 Uber drivers in a year is equivalent to 90,521 full-time employees. That "accounts for just 0.1 percent of national FTE employment."

Uber says that more than half of its drivers in the United States drive for the service less than 10 hours a week.

"While we appreciate EPI's contribution to this important topic of research, the paper makes several questionable assumptions while altogether ignoring the flexibility drivers tell us they value and cannot find in traditional jobs," an Uber spokesman said.