Uber, Lyft drivers earning half of what they did in 2013: Study
Uber and Lyft drivers are earning half of what they did in 2013, even as the ride-sharing companies draw higher valuations and move toward going public, according to the findings of a JPMorgan Chase Institute study released Monday.
The average earnings per month of gig workers in the transportation sector fell 53% to $783 in 2017 from $1,469 in 2013, according to an analysis of 38 million payments to 2.3 million Chase checking accounts. The study defined the “transportation sector” as independent contract drivers transporting people or goods for online platforms such as Uber and Lyft.
Several factors could have played a role in the decline in monthly wages, including an increase in the total number of participating drivers or a decline in the number of hours worked per driver. However, the bank said the further analysis of balance sheets for drivers working for Uber noted a decline in trip prices from 2014 to 2016.
“Regardless of whether the drop in earnings was caused by a fall in wages or hours or both, it indicates that driving has become less and less likely to replace a full-time job over the past five years, as more drivers have joined the market,” the study said.
Uber disputed the study’s findings in a blog post, noting that JPMorgan Chase tracked average monthly income, not average hourly wages.
“The distinction between monthly and hourly average earnings in this context is an important one: if the share of our partners who drive only occasionally has increased over time, as it has, it stands to reason that the average of every driver’s monthly (or, for that matter, weekly or yearly) earnings would decrease,” wrote Libby Mishkin, a senior economist at Uber.
Lyft also pushed back on the notion that driver income is falling.
“The fact that this study did not examine hourly earnings, the metric that drivers care most about, has resulted in misleading headlines,” the company said in a statement. “Had it done so, the results would have shown stable driver earnings in recent years. Many more drivers are choosing to earn with Lyft on a part-time basis, often fewer than ten hours per week, and they tell us they truly value the flexibility Lyft provides."
Overall worker participation in the “gig economy,” or work based on temporary contracts rather than full-time employment, grew steadily from 2013 to 2017. The study found that the transportation sector dwarfed all other online employment platform sectors, including non-transport work, selling and leasing, in terms of both overall transaction volume and participation.
While wages fell for drivers, they rose in each of the three smaller sectors over the same period. The biggest jump occurred in the leasing space, which includes platforms such as Airbnb, the home and apartment rental marketplace. Average monthly income rose 69 percent to $1,736 in 2017, up from $1,030 in 2013.
As the dominant player in the ride-sharing space, Uber has an estimated valuation of roughly $72 billion, while competitor Lyft has a valuation of about $15 billion. Both companies are said to be considering an IPO in the near future, but have drawn criticism related to their treatment of drivers.