- 5 March 2018
- Transport / Logistics Services
Three quarters of drivers working with ride-hail companies in the USA are on less than minimum wage, according to research from MIT. The Centre for Energy and Environmental Policy Research (CEEPR) research concluded that “profits from ride-hail driving are very low”.
The CEEPR study drew upon the self-reported revenue, mileage and vehicle choices from more than 1,100 Uber and Lyft drivers and combined this with other data.
It showed that most drivers are on very low incomes and some are even losing money.
“Results indicate that profit from ride-hail driving are very low,” said CEEPR. “A Median driver generates $0.59 per mile of driving, and incurs costs of $0.30 per mile. 30% of drivers incur expenses exceeding their revenue, or lose money for every mile they drive. On an hourly basis, the median profit is $3.37 per hour and 74% of drivers earn less than the minimum wage in the state where they operate.”
The full text of the study , entitled “The Economics of Ride-Hailing: Driver Revenue, Expenses and Taxes”, is available to CEEPR associates / sponsors and will accessible by the public in a few months’ time.
This flies in the face of claims that such systems are good for both drivers and the consumer, and feeds into the general idea that margins are being squeezed at the expense of those who are delivering the services, not through other efficiencies in the system. While the data is set in the US and not Europe / UK, the CEEPR results will feed into the general thinking on the topic.