MIT Study Finds Most Lyft And Uber Drivers Are Making Well Below Minimum Wage, Some Losing Money

by 12 months ago
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Being a Lyft or Uber driver was once thought to be a great side hustle and allowed you to make some decent coin in your spare time. A new MIT study finds that not only are most Lyft and Uber drivers making well below minimum wage, there are many who are even losing money.

The ride-hailing giants were believed to bring many decent-paying and fairly low-skilled jobs to the blossoming gig economy. The MIT Center for Energy and Environmental Policy Research found that being a driver for these two companies is not as financially beneficial as once thought.

MIT surveyed more than 1,100 Uber and Lyft drivers as well as gathered detailed vehicle cost information that included factors such as fuel, insurance, maintenance, and repairs. They found that ride-hailing drivers were making far less than minimum wage when you factor in the costs of driving your own vehicle.

The study, which is titled “The Economics of Ride-Hailing: Driver Revenue, Expenses and Taxes,” found that the median pretax profit earned from driving for Lyft and Uber is $3.37 per hour after factoring in expenses. The MIT study discovered that 74% of drivers earn less than their state’s minimum wage. The scariest part is that a whopping 30% of drivers are actually losing money once car expenses are included.

The study was done by Stephen M. Zoepf, Stella Chen, Paa Adu, and Gonzalo Pozo at MIT’s Center for Energy and Environmental Policy Research. Uber has disputed the findings of the study and question the methodology.

“While the paper is certainly attention-grabbing, its methodology and findings are deeply flawed,” an Uber spokesperson said. “We’ve reached out to the paper’s authors to share our concerns and suggest ways we might work together to refine their approach.” A Lyft spokesperson said the researchers had made “questionable assumptions” in the study.


TAGSGig EconomyJobslyftMinimum Wageside hustleuber