MIT study says Uber wages are horrible

Finally some data about what a racket Uber/Lyft/AirBnB are.

MIT study shows how much driving for Uber or Lyft sucks

The researchers found profit from ride-hail driving to be “very low”. On an hourly basis, the median profit was $3.37 per hour, with 74% of drivers earning less than the minimum wage in the state where they operate.

They also found a median driver generates $0.59 per mile of driving but incurs costs of $0.30 per mile; and almost a third (30 per cent) of drivers were found to incur expenses exceeding their revenue or to be losing money for every mile they drive.

Basically, the report said that many drivers are simply unable to factor in the price of car maintenance and gasoline. They don't understand they are losing money.

Of course, the famously combative Uber immediately dismissed the study:

an Uber spokesperson told The Guardian the company believes the research methodology and findings are “deeply flawed”, adding: “We’ve reached out to the paper’s authors to share our concerns and suggest ways we might work together to refine their approach.”

And defenders fired right back, because MIT.

Tluszcz was quick to dispatch that critique. “MIT is not some second tier organization that did this study,” he points out...“These business are built on situations in the market that are not realistic,” he tells TechCrunch. “They took advantage of a hole in legislation… Governments let that happen. And it made all of sudden services cheaper. But people have to eat. People have to live. And ultimately there’s only 100% of a cake."

Even Uber's heavily cooked books show a loss of $5B on $5B of revenue this year, their seventh year in existence. But this corporate finance angle has not penetrated the public'
s consciousness. Perhaps a study about actual wage levels and individuals' P&L will get through. Don't count on it, though. Defenders of the sharecropping economy are already attacking from multiple angles.

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arendt's picture

MIT Study: Median Uber and Lyft Profits Less Than Half Minimum Wage; 30% of Drivers Lose Money

I find the last paragraph to be the dirty secret that my well-off high-tech friends will never admit:

But as one colleague pointed out, the people who seem keenest about Uber are the affluenza and high-end professionals who can easily afford to pay more for car service. Her take was that this was another manifestation that they now see it as a matter of right to have a servant class at their beck and call. And not even a well treated servant class.

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Pluto's Republic's picture

@arendt

...(they already are where I happen to be) we can heap our disdain on the robots, instead. The drivers will be gone, scrounging for another job to keep them alive.

I, for one, want to see all robots taxed in order to provide Universal Basic Income to everyone.

The reason these services are preferred over taxis is because they can watch their driver come toward them the moment they call for one.It's apparently mesmerizing. In cities like New York where one can hail a cab in the street, many no longer care to compete, especially in poor weather. A designated car seems much more civilized.

Cab companies have the option of licensing Uber software for their own use. Get rid of the dispatcher and streamline the business model. Maybe put some new shock absorbers on the fleet and wipe down the interiors.

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____________________

The political system is what it is because the People are who they are. — Plato

ever. I have friends who do though. I've explained it to a few of them and some get it, but not all want to get it. They like that its cheap and supposedly more convenient and that's all they want to see. Same with Amazon.

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Only a fool lets someone else tell him who his enemy is. Assata Shakur

@lizzyh7 I know a lot of well meaning people who wouldn’t shop at Walmart, for instance, but have no issues with Uber. I can’t begin to understand that except they’ve been fooled by the neoliberal lies of the gig economy. Still, I just want to know how anyone who gives a damn about the quality of our world could use just going by the publicity they bring on. Has there ever been a positive headline about Uber?

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Idolizing a politician is like believing the stripper really likes you.

Socialprogressive's picture

She said the day she worked for two hours and only made $6 was the day she said that's enough of this shit.

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When I offer to wash your back in the shower, all you have to say is yes or no.
Not all this "who are you, and how did you get in here?" nonsense.

Wink's picture

than your basic Yellow Cab ride. In fact, here at least, a cab ride that costs $8 costs $10 with Uber, 25% more. These drivers would do better - and run more competitively - by doing what they do minus the Big Corporate parent. Just DIY themselves. A two-fer. Could charge less and put more $$ in their pocket.

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the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.

snoopydawg's picture

Yep Uber is going to bring people to their doctor's appointment and they will be paid by their doctor's offices.

Uber Heath will partner with health care providers, who will be able to schedule rides for patients using a special digital platform. The providers cover the cost of the rides.

The digital dashboard, which adheres to the federal privacy law HIPAA, lets doctors alert patients to their rides via SMS messages or by printing out a piece of paper.

Why? Money of course.

Every year, 3.6 million Americans miss medical appointments because they don't have transportation. Missed appointments cost the medical system more than $150 billion a year. Uber, and its U.S. competitor Lyft, want to chip away at the problem.

Last week, Lyft announced a partnership with Hitch Health, a non-emergency transportation company that identifies patients who may need free rides and sends SMS texts.

Hmm. How would Uber know which patients would need transportation to their appointments without violating HIPAA? I have no idea how that works, but I'm thinking that isn't kosher.

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Which AIPAC/MIC/pharma/bank bought politician are you going to vote for? Don’t be surprised when nothing changes.

Lily O Lady's picture

@snoopydawg

ambulances due to the cost of ambulance services. Our economy is increasingly insane.

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"The object of persecution is persecution. The object of torture is torture. The object of power is power. Now do you begin to understand me?" ~Orwell, "1984"

arendt's picture

@Lily O Lady

Because there are very few buses in the suburbs, especially wheelchair friendly ones.

Since I don't Uber, I made the expensive decision to take the local cab company across town to pick my car up from the repair shop. It cost me $20 for a ten mile trip!

Given the skyrocketing prices of everything and the highway robbery of ambulances and health services, I can understand why people take Uber.

My problem with Uber is the distribution of income - cab medallion holders see their investment vaporized, the sharecropper drivers are robbed of wages, the stockholders are betting on the future (Uber becomes THE monopoly transportation company, one town at a time). Without the subsidies from Wall St., Uber could not afford these prices.

There is nothing magic about what Uber did. The cab companies could do the same if Wall St. would hand them $5 B a year. Actually, what Uber is doing is called "capital dumping". Its a means of driving competitors out of business, by selling below cost.

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gulfgal98's picture

@arendt

My problem with Uber is the distribution of income - cab medallion holders see their investment vaporized, the sharecropper drivers are robbed of wages, the stockholders are betting on the future...

This is exactly what has happened to our economy with the loss of living wage jobs outsourced overseas. The gig economy is harmful, not just to those who are forced to take gig jobs in the absence of decent living wage jobs, but it is also harmful to entire industries. It is symptomatic of the economic stripping out of the middle and lower classes that is going on in this country. I also believe that the gig economy is also a sign of the end stages of the capitalistic system in this country.

AirB&B and VRBO rentals have a similar impact upon the viability of entire neighborhoods by removing housing units from the inventory and turning them into hotel rooms, thus robbing the neighborhoods of 24/7 neighbors and driving up the cost of housing due to the scarcity of housing stock. In most cases, the houses coverted to vacation rentals tend to be more affordable which is why they are snapped up by investors who convert them to short term rentals.

The gig economy is a very overt sign of a disfunctional economy in which income and wealth gap increasingly widens between the very wealthy and the rest of society.

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Do I hear the sound of guillotines being constructed?

“Those who make peaceful revolution impossible will make violent revolution inevitable." ~ President John F. Kennedy

The Aspie Corner's picture

@gulfgal98 But the plebs would rather fight each other over some stupid shit that was said, characters in tv and movies, etc.

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Modern education is little more than toeing the line for the capitalist pigs.

Guerrilla Liberalism won't liberate the US or the world from the iron fist of capital.

Pluto's Republic's picture

@snoopydawg

...for medical patients called Veyo. Even Medicaid-based services use Veyo to bring patients in and send them home. How else could they receive medical care?

I remember talking to an American friend who lived in Paris about this several years ago. She was undergoing cancer treatment, and was telling me how she was driven to all her appointments. This in addition to other support services that are unheard of in the US. For example, every few weeks, her doctors would send her to a stay at a luxury guest house/spa because she was looking a little pale. A driver would come fetch her and carry her bags. There was no charge. It's part of the medical treatment.

This should not be about Uber et al. vs. taxis or AirBnB vs. hotels. That's the wrong conversation and a distraction from what is really important. People are forced into this bottom-feeder form of capitalism to survive in the US. In many places I go, there is no infrastructure for modern civilized public transportation because that investment was never made in the United States.

As for housing, there is not one state in the US where a full-time worker at the low end of the wage scale is able to afford rent on a one bedroom apartment. I know of many people who rent their bedroom out for $20+ per night, while they sleep in the living room. And that's the case at every price point from tenants in modest apartment buildings to some in luxury digs. That's a big part of the AirBnB story in the US. Housing is not affordable in the US and unemployment is too stingy and short to cover rent. People have a rent crisis every month. When rent is five days late, landlords now file eviction notices to get a jump on the thirty day wait. They are squeezed by their mortgage companies, who also play hardball. Every taxi driver and Uber driver I know is broke and eat convenience-store diets, which keep them broke.

Freedom from hunger, access to medical care, and affordable housing are Human Rights. They've been Human Rights since 1948. If Americans had Human Rights, this discussion would not be happening. The dogs would stop fighting over the scraps.

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____________________

The political system is what it is because the People are who they are. — Plato
snoopydawg's picture

This is a very bad bill and I'm hoping it gets shut down. This is so very unconstitutional that I can't believe they are even thinking about doing this.

Bill that gives police access to the drug database advances

A bill allowing certain law enforcement officers access to the state's Controlled Substance Database without a warrant narrowly passed a Senate committee hearing following nearly an hour of heated debate.

HB260 was recommended by the Senate Business and Labor Committee by a 4-3 vote despite Sen. Todd Weiler's numerous criticisms of the bill that it was unconstitutional and hostile to people's Fourth Amendment rights.

How would cops get trained to do this?

The proposed law would let a police officer assigned specifically to drug diversion cases to request prescribing data from the state Division of Professional Licensing after the officer and their superior have completed an eight-hour training course regarding the rules for using the database.

Ward said the bill is designed to allow police to better target prescribers who have perpetuated large-scale distribution of opioids through an inordinate number of prescriptions and those patients who distribute the substances.

I am very against this passing because it's not people in the drug database who are O'ding on opioids, it's people who were cut off prescription medications and turn to the streets to find them. People who are in pain clinics know damn well what the rules are and what happens to them if they break them.

Is there a problem with people overdosing on opioids? Are there a lot of people addicted to opioids? You betcha, but instead of giving police more power to spy on us, let's address the issues of why people are taking them.

Studies have shown that many people are under enormous stress for various reasons. No jobs, high cost of housing, wealth inequality and numerous other issues. Oh yeah, people might be in chronic pain and have nowhere to turn to get help because they don't Have Health Insurance!. So maybe we can work on those issues instead of giving up more of our rights. Yes, let's start with this.

Here is one good reason for why this should not get passed.

"This constitutes a clear violation of our 4th Amendment rights. Additionally, this violates the provider-patient confidentiality that is at the core of our profession. If I prescribe anything to a patient, that is done under my best medical judgment, as it should be for anyone prescribing a potentially hazardous substance. This allows someone with absolutely NO medical training to second guess those of us who have devoted our lives to doing what is best for those under our care. You can't teach 7+ years of pathophysiology and pharmacology in an 8 hour course."

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Which AIPAC/MIC/pharma/bank bought politician are you going to vote for? Don’t be surprised when nothing changes.

Pluto's Republic's picture

@snoopydawg

(Which does not allow medical professionals to be present during deliberations.) Can you imagine their brainstorming? I think this is Melania's First Lady thingie. It's got to be comedy gold! I wonder if they've gotten to the "Just Say No" remedy yet. Or the public service commercials telling viewers that "This is your brain on Opiates." I can't remember what D.A.R.E. stands for. Too stoned.

All the while they are seething because ObamaCare still covers rehab.

We all know they will finally emerge with their genius solution — steeper sentences for drug users! At least it's a lot easier to get heroin on the inside; the only bright spot for those in despair. For every pill pusher, they'll nab 20,000 users and destroy just as many families. So, things are looking up for privatized prison profits.

This constitutes a clear violation of our 4th Amendment rights.

Americans lost those rights decades ago. When police say, "Do I have your permission to search your car?" trust me. It doesn't matter what you say or don't say. Every word I type right now is being scooped up and cross-linked to me. When I spoke to Alexa a few minutes ago, that was scooped up by a government agency, and stashed in Utah. If Americans could emerge from their denial and get real for once, they and their children might not have to go down with the rogue ship of state.

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____________________

The political system is what it is because the People are who they are. — Plato
The Aspie Corner's picture

This country was founded on mercantile racketeering, after all. It doesn't matter where you work nowadays. If you're anywhere but the top, you're fucked. Thanks, Austrian/Chicago School Royalist bastards.

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Modern education is little more than toeing the line for the capitalist pigs.

Guerrilla Liberalism won't liberate the US or the world from the iron fist of capital.

Lily O Lady's picture

they are currently living in Japan where they use cabs if they can’t use public transport. The only exception is Uber Eats probably due to the language barrier. The Japanese have very efficient food delivery, so it may be that Uber Eats appeals mainly to foreigners.

In Japan, taxis are gleaming chariots, clean inside and out. The drivers dress in dark suits and wear white gloves. Tipping is not expected. I don’t think ride share services have much of a chance there.

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"The object of persecution is persecution. The object of torture is torture. The object of power is power. Now do you begin to understand me?" ~Orwell, "1984"

Contribute greatly to traffic congestion. So in addition to not paying much tax, they put a burden on our infrastructure.

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arendt's picture

@Blueslide

The free market strikes again. Uber sharecroppers causing traffic jams in their bottom feeding search for sub minimum wage jobs.

Then the city tries to impose fees and Uber screams, and the outer boroughs scream. Everbody recognizes there is a problem. Everyone wants someone else to pay for it.

But we should never, never have planning, because planning leads to communism, like dancing leads to sex.

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and the Massah reaps the lion share of after-cost profits. This is why the biz model is so popular, and why it should be tightly regulated and Uber, LLC and its stock heavily taxed to provide full benefits to driver-owners.

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