I f you are an employee of a restaurant earning the federal rate of $2.13 per hour — which has not changed in almost 24 years — you may want to move over for an UberX driver who calculated that she earned as low as $1.19 per hour recently.
After extensively running the numbers and checking the facts of the $78.47 in total fares earned from 15 rides during a shift of eight hours of driving a car for UberX, Jennifer Moody of The Jetsetter’s Homestead was curious as to whether or not she was actually earning any money for herself after Uber had recently announced another round of UberX rate cuts in 48 select markets — and she learned that after the following criteria was calculated:
- One dollar taken by for each ride to cover a Safe Rides Fee
- A split fare fee of 50 cents for two riders who each wanted to pay half of one particular ride
- 20 percent taken by Uber from the remaining $62.98
- $40.88 from the remaining $50.38 for the total mileage deduction by the Internal Revenue Service at 57.5 cents per mile
- Divide the remaining $9.49 by eight for each hour worked, and she was left with only $1.19 per hour of driving
If you do not include the total mileage deduction by the Internal Revenue Service, then she earned $6.30 per hour — which is still below minimum wage in any state in the United States; and while it may be significantly more money than the base rate of what waiters and waitresses of a restaurant may earn, they usually receive a gratuity from most customers.
Conversely, drivers for Uber cannot count on gratuities primarily because the services marketed by Uber claim that tips are included in the fare — which might be unfair to Uber drivers — and if itemizing expenses is the preferred method instead of the total mileage deduction by the Internal Revenue Service, then the driver must calculate such expenses as fuel, depreciation and mechanical repairs. Sure, the driver might get a break on income taxes with deductions related to the business; but I do not believe that anyone can exactly retire and run off to Fiji on those tax breaks.
These findings might even rekindle the debate over the ethics of surge pricing; although the main purpose of surge pricing is to incentivize drivers to serve customers during busy times — such as holidays, for example.
Jennifer Moody is fortunate that she has other sources of income on which she can rely; and she admits that there are drivers who know how to earn a living driving for Uber: “I know a lot of these higher earning guys (and they are almost exclusively guys) and they hustle for the money — they work the odd hours, seem to intuitively know where the best ride or surges are going to be, and spend time cultivating their business. I’m impressed by their stamina.”
People do have choices about for whom they want to be employed; but what about the drivers who rely on Uber for their living — the ones who are not shrewd; do not possess “high stamina”; and do not implement the techniques to actually earn a decent amount of money? Are they out of luck because Uber decided to lower hourly wages? Should passengers subsidize their earnings with gratuities — similar to waiters and waitresses in restaurants and members of the housekeeping staff in hotel properties?
If what Jennifer Moody reports is true — and if there is a significant number of other drivers in similar circumstances — I am not sure how the general business model of Uber will continue to be sustainable when the driver works long hours for little pay…
