Leaked Docs Provide An Unprecedented Look At Income Of Uber Drivers (buzzfeed.com) 323
In 2013, Uber told the Wall Street Journal that a typical Uber driver takes in more than $100,000 in annual gross fares. The ride-hail platform, which has shared similar estimates many times since, says that the company's efforts toward its drivers is a pathway to a modest, more attainable American dream. Turns out, the it has been exaggerating. According to BuzzFeed News, which obtained leaked documents, drivers in some markets don't take home much more than service workers at major chains like Walmart when it comes to net pay. According to the publication, drivers in three major U.S. markets -- Denver, Detroit, and Houston -- earned less than an average of $13.25 an hour after expenses. From the report:Based on these calculations, it's possible to estimate that Uber drivers in late 2015 earned approximately $13.17 per hour after expenses in the Denver market (which includes all of Colorado), $10.75 per hour after expenses in the Houston area, and $8.77 per hour after expenses in the Detroit market, less than any earnings figure previously released by the company.
What, me exaggerate?? (Score:4, Insightful)
Of course the exaggerated. I've been watching companies do this my whole life, it seems par for the course.
The large print giveth, and the small print taketh away. Because of this, I would never work for a franchise outfit like Uber; instead I would file a 1099 and use my own SSN for the business number (sole proprietorship) and actually work for myself.
Re: (Score:2)
However with a Franchise you have a marketing engine behind you. If you go in it for yourself you will need to do all your marketing yourself. Without the economy of scale thus you may be working in the red for many years.
Long term if you can tolerate it, you will make out. However short term it will just suck.
Re: (Score:2)
It probably isn't exaggerated at all, you just have to understand the terms involved. Right there in the first sentence it clearly states "gross fares". Of course this number is going to be higher, and probably a lot higher, than "net pay". Basic finance fail for anyone who thought someone bragging about workers' gross contribution to company balance sheet was going to vaguely resemble employees' personal income.
Bad reporting. (Score:5, Insightful)
If you start out talking about "100k in Gross Fares" then reveal that number was wrong, you need to tell us what the actual GROSS FARE was. Switching to take hour earnings, after expenses is the mark of an incompetent statistician, and a poor journalist. At the very least.
For those of you that did not read the article, they claimed that expenses were 25-33%, so at 100k, that would be somewhere between 66 and 75k, assuming 60 hour week that would have been $22 an hour, far more than the current claims of $13.25 (which sound exaggerated to me.)
Re: (Score:3)
Re: (Score:2)
I know... I think of Buzzfeed as the crappy clickbait list people... definitely NOT the news people...
Re:Bad reporting. (Score:5, Insightful)
The point is that Uber deliberately chose that number to make it seem like it was giving its drivers a fair deal. When most people see that, they think that the driver is making $100k pre-tax, so that their income is that number minus taxes.
This new number shows to what extent Uber has externalized its operating costs onto its drivers. That a company worth a staggering $62BN should do this is reprehensible. It is truly a business model built on finding ways around all rule of law (labor law, insurance law...). I'm guessing they attract investment because investors think Uber will do this successfully.
Re: (Score:2)
Sounds the same as any other ad for an MLM scheme or work at home scheme or real estate scheme. "Working with us you can make thousands of dollars a day! *"
*: [3 pt font]The president makes thousands of dollars a day. Median income 38 cents.
Re:Bad reporting. (Score:5, Insightful)
You have things backwards. The company is worth $62B because it has externalized its costs.
Re:Bad reporting. (Score:4, Informative)
The $13.25 is a calculation by Uber, not by the journalist. The journalists re-ran some of the calculations and got slightly lower figure.
"Internal Uber calculations, provided to BuzzFeed News by Uber, based on data spanning more than a million rides and covering thousands of drivers in three major U.S. markets — Denver, Detroit, and Houston — suggest that drivers in each of the three markets overall earned less than an average of $13.25 an hour after expenses."
Assuming Uber are not lying about the $13.25, that would still mean that if you worked 40 hours a week, every week of the year, you'd make $27,560 a year.
Whether this is a good or bad depends on how much ordinary taxi drivers make for a similar amount of work.
Uber has frequently talked about how much a driver's gross income will be as a way of encouraging people to join up, which is a nice bit of marketing, and standard practice for companies like Uber.
Re: (Score:3)
Re: (Score:2)
Re:Bad reporting. (Score:5, Informative)
If you start out talking about "100k in Gross Fares" then reveal that number was wrong,
One problem is that this 100k figure was quoted in 2013 (and I assume it only covered year 2012 for a Uber driver, to make the company look as good as possible).
We're now in 2016, and the article compares the 2013 (2012 year) to a calculation done for the 2015 year. The problem is that Uber has lowered its base rate since that quote in 2013, flooded the market with new drivers since then, added UberPool in some regions with an even lower base rate (and increased risks for drivers who don't get the per person safety fee that Uber collects despite the fact that drivers make that many more stops when pooling), and in addition to that, Uber has increased the commission percentage it took from drivers. In other words, Uber drivers that used to drive around that 2012 period used to make a lot more and are super upset at the company (and for good reasons).
That being said, I have no reason to believe that Uber lied to the Wall Street Journal in 2013, and to imply that Uber did, is just lazy click-bait journalism. And I really do mean lazy. It's not like there is a shortage of Uber drivers that you can interview (all Uber drivers know this stuff, even the new ones). And that so-called Buzzfeed reporter could have just called an Uber driver to get a reaction on that story, or just plainly have done a google search on ridesharing bulletin boards, where all of this is talked about in thousands of bulletin threads. But that writer did no such thing, neither did her Buzzfeed News Data Editor listed next to her byline, which brings me to another point.
Buzzfeed staff are probably paid very little to nothing at all (one would surmise). If paid something, they're probably paid on the amount of controversy and clicks they can generate, not on the amount of time the spent researching the topic. There is obviously little to no quality control done on each article and no double-checking of any kind. And Buzzfeed readers are actually dumber for having read Buzzfeed than not having read it.
Re:Bad reporting. (Score:5, Informative)
Gross @ $100,000
Federal Taxes = $18,184
Social security = $12,400
Medicare = 2,900
25% in expenses == $25,000
Leaves $41,516 or a profit of $798 a week, If the state has an income tax it changes those calculations some.
as a 1099 self employed you are responsible for all of the above.
Re: (Score:2)
Comparing apples to apples, I wouldn't take income taxes into account. Everyone has to pay those. I would take the 6.2% in SSA and 2.8% that the employer pays if you're not a contractor into account.
Re: (Score:2)
Re: Bad reporting. (Score:2)
It's not cherry picking. When most people talk about their income. They are talking about income before taxes. Everyone's tax situation is different. But no one pays 25% of every dollar in taxes.
$13 and hour and my car is a tax write off? (Score:3)
Re: (Score:2)
Are you including the higher insurance costs related to using your vehicle for business purposes?
As to smartphone use, it would be similar to a home office. The space designated as a home office would have to be the primary use of that space to get a tax deduction. Not your den where you occasionally work.
In this case the primary use of the smartphone would have to be for Uber. Not your personal phone which happens to have an app for Uber. This means you would have to have two phones and the cost of the se
Re: (Score:2)
Re: (Score:2)
Tell me what part of the US a roughly $26k annual salary is a "great deal"?
-Chris
Re: (Score:2)
Re: (Score:2)
Re:$13 and hour and my car is a tax write off? (Score:5, Insightful)
A good accountant will tell you that you can't do that. You could only write off a portion of the cellphone plan.
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Good luck doing that write off of the plan! You only get to deduct YOUR PORTION, not the whole thing, and only the portion that is 100% used for your business. Claim more - and you're setting yourself up for an audit. And $200/yr for a good accountant? Try that PER HOUR. You'll need to keep your own expenses, receipts, and costs fully documented as well (dates, amounts, copies of receipts) for that accountant to spend a few thousand to get you lowish taxes.
And that good accountant will NOT go for a 100
Re: (Score:3)
Why do so many people have trouble with such basic financial concepts and terms?
Because financial literacy isn't taught in the schools. The last thing Wall Street wants is a population of financially literate people who can easily avoid all the scams that separate their hard earned money from their wallet.
Taxis (Score:5, Interesting)
Looks like they make less than they do driving a taxi full-time in Denver....
"The median annual Taxi Driver salary in Denver, CO is $33,803, as of May 31, 2016, with a range usually between $28,077-$41,255 not including bonus and benefit information"
http://www1.salary.com/CO/Denv... [salary.com]
At $13.17 an hour, 40 hours a week, 52 weeks a year, an Uber drive in Denver would pull in $27,394 at that rate, and that's WITHOUT benefits and bonuses.
There's a lot that I' assuming here, like a person working strictly full time as an Uber driver.....but if you were going to work strictly as a driver, you'd probably be better off driving a taxi.
Re: (Score:2)
Re: (Score:2)
No clue. Obviously I'm leaving out a lot of info here, and I don't know how much licensing and such cost for a taxi driver that Uber drivers don't seem to have to worry about (for the time being anyway).
Re: (Score:2)
Similar to DoorDash (Score:5, Interesting)
I used to track all my DoorDash deliveries to a T. That gig earns $11.21 an hour in the Minneapolis/Saint Paul market on average. I'd be happy to share my data spreadsheet with anyone interested.
Gross Fares? (Score:2)
...typical Uber driver takes in more than $100,000 in annual gross fares.
Are they saying that the typical driver brings in $100,000 to Uber? If you take an Uber or taxi, the fare is brought in by the driver, then his pay is deducted from that.
Re: (Score:2)
I get the feeling that this is exactly where that number came from.
Take all revenue earned by drivers and divide by number of drivers. See? every driver earns, on average, $100k/year (for us)...
Shocked (Score:2)
Obviously.. (Score:5, Insightful)
Comment removed (Score:5, Insightful)
Re: (Score:3)
Re: (Score:2)
The "American Dream" only works for a select few...oblivious to what conditions are elsewhere, like in Europe.
The upper middle class in the US has expanded [forbes.com] from about 12% of the population in 1979 to a new record of nearly 30% as of 2014.
Also the US has an unemployment rate half that of most European countries (Germany is the only exception with equivalent unemployment rates to the US due to labor law reform there in the early 2000's).
Re: (Score:2)
Re: (Score:3)
Re:Obviously.. (Score:4, Interesting)
I don't think it's really something that's unique to America either. Plenty of people immigrate to Canada or European countries for much the same reasons and similarly build better lives for themselves, but the name dates back to an earlier time in America's history when a large number of people (typically Europeans) were immigrating to the U.S. for a variety of reasons so the name has stuck.
Re: (Score:2)
It may not be a dream come true, but it can be a way to make a second paycheck working entirely on your own schedule. There aren't a lot of easy ways to turn a few otherwise idle hours into an income.
Plus it provides a helpful service to people and leads to less drunk driving.
What were the arguments against it supposed to be? We owe the taxi monopoly and their political friends a favor?
Re: (Score:2)
it can be a way to make a second paycheck working entirely on your own schedule. There aren't a lot of easy ways to turn a few otherwise idle hours into an income.
Especially if you now fall under the higher income limit for overtime non-exemption, where you would have to be paid time-and-a-half for an hour on your primary job, as opposed to just being paid normal pay for your secondary job.
They boss themselves. They work extras as needed. (Score:2)
"which includes all of Colorado" (Score:3)
This completely invalidates the analysis. Colorado is huge and I'm sure there are several small cities way outside of Denver that skew the statistics.
I've used Uber in some small towns (like Idaho Falls, ID) where it was basically just one dude with his old Prius. He just sits at home and waits for Uber to ding and jumps in his car. How much money he's making "per hour" isn't really a relevant metric...
Re: (Score:2)
Eh, maybe not the most rigorous analysis but I wouldn't go "completely invalid" either. 70% of Colorado's population lives in the greater Denver area (including Boulder and CO springs). The next biggest population center is Ft Collins, 90 min up the road at ~300k and most of the rest is small or spread out enough that there probably aren't any Uber drivers (Idaho Falls has 50K residents? Thats huge!).
Using Denver to represent the state is a fair ballpark.
Re: (Score:2)
Re: (Score:2)
Comment removed (Score:4)
Re: (Score:3)
Re:And why are you surprised? (Score:5, Insightful)
Driving people around is a marginally skilled luxury service that in theory a teenager with 1-3 years of personal driving experience could do.
Thanks to automation (GPS/Waze/Google Maps), now you don't event need to know anything about directions to drive a cab/rideshare. 30 years ago, you needed deep geographic and traffic knowledge. Thus it has become a less-skilled job.
Common practice... (Score:2)
Comment removed (Score:4)
Re: (Score:2)
Not as bad as I'd assumed. I feel LESS guilty now (Score:2)
On the other hand, it indicates that in most markets Uber drivers can earn a living wage and even in the most competitive markets they can cover expenses and beat the minimum wage.
I suggest this is a valid choice for Uber drivers. It doesn't suggest that you would leave a good manufacturing job with benefits to drive people around, but is that realistic in any case?
I
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Re:Uber income (Score:5, Interesting)
Re: (Score:2)
They won't buy you a car but they're eager to sell you one on dubious credit terms..
Actually, what they do is hook you up with a sleazy lease company. They will give you a lease even if you don't "deserve" one because you're a bad risk, but the rates are high, and they want way too much to buy out the vehicle at the end of the lease period. Presumably since times are tough there's no trouble finding people willing to work as repo men, so it's a fairly secure business model. People aren't going to shit up a car they're using as an Uber taxi.
Re: (Score:2, Insightful)
About a year ago, Uber was advertising heavily on Craigslist for drivers in my area. But if you did the math, based on the numbers they put in their ads, you would have to drive 70 hours a week to make the amount of money they claimed. I see now that the amount of money they are claiming you can make per week has been cut in half.
Re: (Score:2)
Re: (Score:2)
so you pay this first car on time, raise your credit and get the next car on better terms.
Or you don't make enough to survive and pay for the lease driving for uber unless you spend every waking hour doing it, and uber knew they were grossly exaggerating so they're party to your suffering.
I'm an outspoken proponent of things like uber, I'm just not sure it's uber. I still cheer their legal victories since it's good for their competitors, too
Re: (Score:3)
Re: (Score:2)
Re: (Score:2, Troll)
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
Re: (Score:2)
It's a work vehicle, it's supposed to wear out from extreme use. It's more economical to use a piece of capital equipment 24 hours a day than to let it sit. The faster they use it up, the faster they reclaim their initial investment.
Re: (Score:3)
Re: (Score:3)
In any case, that figure is ludicrous.
So is 25 mpg, isn't it? Here in Europe, that would be 9.5 liters/100 km. Here, you'd throw that car away and buy a new one to save almost $20k over the life time of that vehicle.
Re: (Score:3)
The majority of wear and tear on vehicles happens when their fluid and tire rotations/changes are neglected. Keep those things constant, realign the suspension every 3-6 months, and a car would last a long time as a taxi. The issue is companies see those costs as an issue up front, even though long term they would get 2-4 times the use out of it with minimal repairs.
Re: Uber income (Score:5, Insightful)
How many "jobs" let you decide you don't feel like working this week with no consequences?
How many "jobs" let you decide on the spur of the moment that, because your plans fell through, you're going to work for an hour and make some extra cash?
Uber isn't a job. It's a way for people who have a stable income to pick up a little extra cash. Uber drivers deserve to be paid practically nothing. They are not taxi drivers, who commit to serve an area on a predictable and reliable schedule, and do not deserve to be compensated as though they were.
Re: Uber income (Score:5, Informative)
How many "jobs" let you decide you don't feel like working this week with no consequences?
UPS is one
When I worked as a loader (in the local Teamsters union) I got 100% medical and dental benefits, got $15/hour and the official policy was that if you don't show up WITHOUT CALLING IN for 4 days in a row, that was grounds for termination (it was *grounds* for termination... but I rarely, if ever, saw anyone fired)
I personally saw, several times, people not call in and not show up for a week at a time. Then they would show up when they needed money.
Because of the benefits and short hours (no full time employment and anything over 4 hours in a single shift is overtime, which was almost never authorized) there were a lot of people who had their own businesses during the day and just use UPS for the benefits.
I was going to school at the time and UPS also kicked in a few thousand per semester for that.... I always recommend UPS to people... it amazes me how many people turn their nose up at it.
Re:Uber income (Score:4, Insightful)
Ah, the return of the company store.
Really, given the facts on display and a history of the 19th century only a few clicks away, why exactly does Uber still have defenders?
Re:Uber income (Score:5, Insightful)
Really, given the facts on display and a history of the 19th century only a few clicks away, why exactly does Uber still have defenders?
Because the taxi racket has been enjoying its monopoly for too long. Where I am, we have some of the highest taxi prices in Canada while many the taxi drivers are near minimum wage (because the drivers rent the licenses from the people who could actually afford them). An Uber driver told me he makes more money on Uber than he did driving a cab, although I didn't ask if that factored in vehicle wear'n'tear.
Everyone I know had pretty much stopped taking cabs because they were so unreliable. You could end up waiting an hour longer than claimed, or the cab just wouldn't show. Uber has effectively brought taxis back into our lives as a viable option.
From everything I've heard, Uber takes advantage of its workers and uses some pretty shady tactics. I support government regulation to ensure drivers can make a decent wage. But they've disrupted a market that desperately needed disrupting and have noticeably improved my personal standard of living.
So given the choice between Uber and the previous status quo? Yeah, I'm an Uber Defender, if a cautious one.
Re: (Score:3)
Uber has zero regulation burden while cabs have a lot of regulation they must comply with. Regulation compliance costs money which is why there is a lower margin for cab drivers.
Re: (Score:3)
Lets go back to the no regulation time where the following occurred;
1. No inspections to ensure safe vehicles.
2. No licenses to pull in case of violations.
3. No accessible vehicles for the disabled.
4. No employment standards so exhausted drivers are on the road.
5. Rampant discrimination so certain groups can not get a cab.
6. Low insurance so accident victims are not compensated fully.
etc.
Do you have to wait an hour every time you call a cab? Doubt it. Do you have to wait an hour on the few high usage night
fuck all them fuckers (Score:3)
It says on the cover "Human Resources"
It's a cookbook.
A COOOOOKBOOOOK!!!!11!!!
Re: (Score:3)
Really, given the facts on display and a history of the 19th century only a few clicks away, why exactly does Uber still have defenders?
I think Uber are a bunch of cocks but I also think that Taxi medallion programs are bullshit. I'm happy to cheer for Uber's legal victories against them. If people mistake that for cheering for Uber, so be it.
Re: (Score:2)
However with the "gig economy" you are your own boss, and have greater control of your hours and what you do. So that $13.00 an hour isn't going to make you rich, It is profit. Plus you can work more hours to make up the difference too. Or work a job and have this as a part time supplemental job.
Re:Uber income (Score:5, Insightful)
Interesting what you did there, calling the $13.00 after expenses a "profit". What's left out in the expenses is the salary for the contractor. That $13.00 is their take home pay after the expenses of running their car. So, if you have zero living expenses and don't eat, then sure, call it profit. But since Uber drivers are humans, they actually need food and shelter. Some of us also think that all humans should have a decent standard of living and have a decent work/life balance, not just those of us that can make six figures surfing the web all day and occasionally banging out a few lines of code.
$13.00 take home pay equates to roughly $26k/year (using the standard 2000 hour work year that every software person I know uses to compute their "salary" based on their consulting rate). The poverty line in the US is roughly $23k.
tl;dr: the $13.00 is not profit, it's salary; $13/hr won't even let you save and the US deems that salary the bare minimum to just scrape by. Working more destroys the work/life balance.
-Chris
Re: (Score:3)
All business owners are humans that need to live. Profit is what you take home from your business, not what you save. The profits an Uber drive makes may be shitty, but that doesn't mean you get to re-define words.
Working more destroys the work/life balance.
You've never been poor, I see. Working 2 30-hour jobs is the normal way you get by. One 60-hour job is better, saves you 1 commute. One 60-hour job where you at least sort of control your hours is much better.
Re: (Score:3)
No wonder the rest of the world considers first-worlders such pricks. We complain about living in the lap of luxury. We have air conditioning, big screen TVs, internet, no warlords raping and killing us by the thousands, and so much food that over half of us are obese and dying from it! Yet f
Re: (Score:3)
I'm not going to argue that $13/hr is in any way good money objectively, for all the reasons you've already laid out, but the median personal income for the US is in fact just about $26k/year.
Which just means that almost everybody is pretty squarely fucked, but literally half of Americans are even more fucked than someone making $13/hr full time.
Re:Uber income (Score:5, Insightful)
Some people might actually like having a part-time job that they go to WHEN THEY FEEL LIKE IT.
It has its advantages. If you don't like it - don't do it. If you use the service and feel that way then tip better.
Re: (Score:2)
Would it of been?
Re: (Score:2)
Re: (Score:2)
What Uber is saying is true, from a certain point of view. In this case yes it's possible for an Uber driver to earn in gross fares $100,000 per year.
That's what they say about the construction trades, which has an acute shortage of skilled workers. As a plumber/electrician/carpenter, you too can make $100K+ per year. The fine print is that you will need to work 60 to 80 hours per week and/or start your own company to make that kind of money. Most people are unwilling to put in that much time for a well-paid job. I had a coworker who left a $50K-per-year government IT job to start his own roofing company and makes $10K per week in the San Francisco Bay A
Re: (Score:2)
Re: (Score:2)
Re: (Score:3)
Detroit is almost all out lying suburbs. It is the city itself where the situation you describe has been going on for the most part.
Re: (Score:3)
Detroit is actually a nice place, in the suburbs. It's the city itself that's a disaster.
Re: (Score:3)
If I wasn't on a conference call I'd be laughing out loud at this...
Move to NY, especially the suburbs of NYC. Moderate risk drivers can pay that per MONTH for full coverage.
Re: (Score:2)
The mandatory fee is the "catastrophic claims" fee which pays the medical bills of anyone in a car accident. I don't think uninsured/underinsured is actually mandatory.