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The MIT study that claimed Uber and Lyft drivers made a median profit of $3.37 after expenses was just significantly revised. The new information now says that drivers earn a median $8.55 to $10 per hour.
Stephen Zoepf, co-author of the study, said Uber and Lyft’s “criticism is valid.” Zoepf released a statement on Twitter and stated that he made “an assumption about revenue … in the absence of public ride-hailing data and a paucity of independent studies outside Uber’s own analyses.”
In the initial report, MIT researchers surveyed more than 1,100 drivers at either company and found that the median profit was less than half the federal minimum wage set at $7.25 per hour and that 30% of Uber and Lyft drivers were losing money after taking into account vehicle expenses. The report factored expenses in insurance, maintenance, repairs, fuel and other costs and found that 74% of drivers earn less than their respective state’s minimum wage.
Zoepf recalculated the results using two different methodologies, and in addition to the increased hourly wage, he found that only 8% of drivers lose money when accounting for vehicle expenses, not the 30% that was originally reported.
His second methodology for calculating the drivers’ wages found that median profit could be as high as $10 an hour. Regardless, in both new calculation methods, a significant percentage of drivers are still earning less than minimum wage in their state — 54% with the first method and 41% with the second, Zoepf said.
Uber and Lyft were both vocal about the original study’s shortcomings. “When an academic study changes so dramatically in just a matter of days, that’s a real flag,” Adrian Durbin, Lyft’s director of communications, told NPR. “While the revised results are not as inaccurate as the original findings, driver earnings are still understated. MIT’s study has fundamental methodology problems.”
TPG reached out to Uber for comment but did not receive a response at time of publishing.
Zoepf called on Uber to “help make an open, honest and public assessment of the range of ride-hailing driver profit after the cost of acquiring, operating and maintaining a vehicle” and “[t]ransparently present the difference between actual and tax-reportable expenses used in the business.”
Featured image by @Vruln via Twenty20.
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