Drivers earning the median amount of revenue are getting $0.59 per mile driven, researchers say, but expenses work out to $0.30 per mile, meaning a driver makes a median profit of $0.29 for each mile. That's far below the federal minimum wage of $7.25. In September of past year, London decided not to renew Uber's license to operate in the city, citing lacking corporate responsibility as one of the primary determinants.
Independent studies on driver earnings are rare. Campbell worked with the MIT researchers on questions for the survey. Zoepf told HuffPost the Toyota Prius, a gas/electric hybrid, was drivers' vehicle of choice by a factor of two.
Other studies have shown that Uber drivers make higher wages because there are many ways to calculate wages and expenses. The Guardian reports the situation isn't much better for the other 70%, as the median profit for drivers for the two ride-share companies is just $3.37 per hour before taxes. 74% of drivers were taking home less than their state's minimum wage, and 30% of drivers were losing money for every mile they drove.
For tax purposes, the government allows drivers to take a standard deduction of $0.54 per mile.
At issue is the number of miles devoted to the rideshare business versus personal use. When operating expenses -insurance, vehicle maintenance, depreciation, repairs and fuel - are included, that figure is reduced to 29 cents per mile.
'Results indicate that profit from ride-hail driving are very low, ' the study notes.
It might well be that many drivers don't sit down and think through the numbers in great detail. Mark Tluszcz, co-founder and CEO of Mangrove Capital Partners, succinctly summed the problem in an interview with TechCrunch: "We're creating the next lost generation of people who simply don't have enough money to live, and those companies are fundamentally enabling it under the premise that they're offering a cheaper service to consumers".
But to understand the dynamics of a business, you have to consider all costs, including the business proportion of depreciation, vehicle payments, insurance (which should mean commercial insurance), fuel, and maintenance.