Uber drivers aren’t making as much money as you might think, and certainly not as much as Uber may have suggested in the past. In 2013, the ride-hailing company told the Wall Street Journal that a typical driver takes in more than $100,000 a year in gross income. Now, a BuzzFeed News report, gathered using internal data from Uber, shows that most drivers make less than $13.25 an hour before expenses.
The report looks at three major markets Uber operates in: Denver, Detroit, and Houston, and comes up with an average hourly salary for each. The calculations were determined using internal Uber documents detailing more than one million rides and several thousand drivers.
Here is about how much an Uber driver makes in the three major markets before expenses:
- Detroit: $12.70/hr
- Houston: $14.18/hr
- Denver: $16.89/hr
But those figures don’t tell the whole story. Drivers must pay a number of expenses related to the job that further decrease their actual net income. BuzzFeed News found Uber’s data to be “highly abstracted,” oversimplifying a number of areas, so it used a few assumptions to created its own methodology to determine net income: (Uber called BuzzFeed’s methodology “solid,” for what it’s worth)
- Contractors drive a $16,000 vehicle, which has a 250,000-mile lifetime, resulting in depreciation costs of 6.4 cents per mile.
- Gas costs drivers $1.75 per gallon and the vehicle gets 25 miles per gallon of gas, resulting in gas costs of 7 cents per mile.
- Insurance, maintenance, and miscellaneous costs add up to $3,000 per year, or $1.50 per hour if the contractor drives 40 hours per week, 50 weeks per year.
Combining the hourly rates determined using Uber’s data, and the estimated expenses from BuzzFeed’s own methodology, shows just how little Uber drivers actually net per hour:
- Detroit: $8.77/hr
- Houston: $10.75/hr
- Denver: $13.17/hr
That $8.77 is only about a quarter higher than the minimum wage in Detroit. Denver drivers seem to fair the best out of the three markets, but still get an average annual salary under $30,000 after expenses.
An early 2015 study commissioned by Uber gets closer to the truth. It found that drivers in 20 cities, including New York, Los Angeles, San Francisco, and Boston, were grossing as little as $17 an hour. That is not a lot of money to live on in any of those cities, especially after the additional expenses are taken into account. It’s also an inflated number compared to what they receive today, as Uber’s rates were cut the following year.
While ride-hailing for Uber might sound like a job full of freedoms, the pay might actually keep you from enjoying those freedoms outside the workplace.
H/T BuzzFeed News