Uber and its CEO, Dara Khosrowshahi, pushed back swiftly against a new MIT study claiming that the median income for Uber and Lyft drivers is just $3.37 per hour, and that 30% are actually losing money while they work.
On Twitter, Khosrowshahi wrote that “MIT = Mathematically Incompetent Theories,” and shared a response from the company’s chief economist, Jonathan Hall.
MIT = Mathematically Incompetent Theories (at least as it pertains to ride-sharing). @techreview report differs markedly from other academic studies and @TheRideshareGuy recent survey. Our analysis: https://t.co/S2aAqCuDR0
— dara khosrowshahi (@dkhos) March 3, 2018
Describing MIT researchers as “incompetent” is a big swing (and also seems to diverge from Khosrowshahi’s aspirations to a kinder, gentler approach to leading Uber). And Hall’s claims to have found a flaw in the MIT study are, at least as presented, not entirely compelling.
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The MIT study used data from a survey conducted by The Rideshare Guy, aka Harry Campbell, a leading independent analyst and rideshare driver advisor. Hall argues that some of the questions, because of unclear wording, could lead respondents to misreport how much time they spend working for ride-hailing services, and misreport income from other sources. That, he says, drives down the hourly rate MIT reported by nearly 60%.
But in the end, Hall’s critique seems to hinge on a fight over how respondents interpreted a series of not terribly well-designed questions. On Twitter, Campbell says he has since modified at least one of the survey questions.
I wrote the question and thought it was pretty clear, ie how much do you make per month from Uber driving?
To be fair, I modified it in 2018 to be more clear.
— Harry Campbell 🇺🇸 (@TheRideshareGuy) March 3, 2018
Meanwhile, Hall says Uber doesn’t take issue with the MIT study’s assessment of driver costs, a major factor in its calculation of lower per-hour pay. Those costs, including lease fees or depreciation and maintenance of vehicles drivers own, have been excluded from many prior studies of Uber driver pay. Hall cites one such lopsided study in his rebuttal, which was coauthored by an Uber employee. (Easily, one takeaway from all this is how little unbiased analysis there is about the pay question.)
Setting averages aside, the most recent version of Campbell’s annual driver survey found that 30.9% of Uber drivers reported earning less than $15 per hour before expenses. The MIT study found that driver expenses were about half of revenue on a per-mile basis — a finding that, again, Uber doesn’t contest. So, even if it’s not $3.37 per hour, many Uber drivers’ real hourly income is indeed significantly below minimum wage.