A study released this week conducted by the MIT Center for Energy and Environmental Policy Research contends that drivers for ride-hailing companies such as Uber and Lyft make far less than expected when vehicle expenses are calculated. The study paired the results from a survey of over 1,100 drivers with vehicle cost information.
The study, entitled The Economics of Ride-Hailing: Driver Revenue, Expenses and Taxes, found that per hour worked, median profit from driving for a ride-hailing company is $3.37 an hour before taxes, with 74% of drivers earning less than the minimum wage in their state. Further, 30% of drivers are actually losing money once vehicle expenses are included, the study found.
Drivers using the 54 cents per mile standard deduction for 2016 exceed their median costs of 30 cents per mile. Because of this deduction, most ride-hailing drivers are able to declare substantially lower profits suggesting that about 74% of driver profit is untaxed.
Uber responded in a statement: "While the paper is certainly attention grabbing, its methodology and findings are deeply flawed. We've reached out to the paper's authors to share our concerns and suggest ways we might work together to refine their approach."
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