New data about the earnings of Uber drivers in three U.S. Cities supports what many already suspected: Drivers don’t make a lot of money.
Average hourly driver earnings in Denver, Detroit, and Houston were the following, according to a combination of leaked internal data obtained by BuzzFeed and additional calculations from Uber:
- Detroit: $8.77 per hour, after expenses, which are an estimated 31% of driver earnings. Detroit’s minimum wage is currently $8.50 per hour.
- Houston: $10.75 per hour, after expenses, which are an estimated 24% of driver earnings. Houston’s minimum wage is currently $7.25.
- Denver: $13.17 per hour, after expenses, which are an estimated 22% of driver earnings. Denver’s minimum wage is currently $8.31.
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The calculations, based on a two-week period in late 2015, are estimates, of course. The amounts reflect earnings after expenses like the estimated amount drivers spend on gas and insurance, as well as Uber’s commission from fares, but without accounting for taxes. They also neglect to take into account the skill level of various drivers. More experienced drivers can make more money by being more strategic about their work.
The calculations only cover Uber’s “peer-to-peer” rides. They do not reflect earnings by drivers for sister services like UberBlack and UberTaxi.
“It is difficult to know what drivers are doing while logged into the app, but not on a trip or en route to pick up a passenger,” an Uber spokesman told Coins2Day, adding that a driver could be actively waiting for a new fare or simultaneously doing something entirely different.
Nevertheless, the numbers published on Wednesday still offer a glimpse into the financial reality of many Uber drivers. Although drivers in Houston and Denver appear to make significantly more than their local minimum wage, those in Detroit barely exceed minimum wage.
Uber advertises much higher wages when trying to recruit drivers. But these findings undermine Uber’s advertised numbers, as BuzzFeed points out.
Moreover, Uber enacted fare cuts in January across 100 U.S. And Canadian cities despite the protests of drivers that could depress earnings even further. All three cities detailed in the article had their fares slashed in January, although Detroit’s have been partially reversed, according to an Uber spokesman. The company added that, after the January price cuts, driver earnings were stable or increased in all three cities.
The company argues that it cuts fares to spur demand for rides and ultimately increase driver earnings. If the changes fail to do so, Uber says it reverses course or adjust prices. Drivers, however, don’t seem convinced. In some cities, they have begun to create driver associations in the hopes of being able to negotiate with Uber over some of its policies. However, as independent contractors, drivers cannot form labor unions.
Uber is currently trying to settle a pair of lawsuits over its classification of drivers as contractors. It has already agreed to a proposed settlement of as much as $100 million, however that has yet to be approved in court. The settlement would result in payouts to eligible drivers in California and Massachusetts to reimburse some of their expenses.
The story has been updated with additional comments from Uber.