A National Bureau of Economic Research study in November 2016 found drivers in six major metropolitan areas earned around $18 an hour, not taking into account hourly costs varying from $2.94 to $6.46 per hour depending on the hours they worked and the vehicle they drove. That's far below the federal minimum wage of $7.25.
Pay varies widely for Uber and Lyft drivers due to a number of factors, including the local level of pay and ride demand, when a driver works, how many hours a driver is on the road and personal expenses.
The MIT researchers quizzed respondents with questions like how many miles they drive and the types of vehicle they use, then factored in the costs of insurance, fuel, maintenance, repairs and depreciation to reach their figures.
So it likely came as no surprise, then, when they discovered that 30% of drivers 'are actually losing money once vehicle expenses are included'. The current report found a median earning for drivers of 59 cents per mile and median cost of 30 cents per mile resulting in an average driver profit of $661 per month.
Many incur expenses that exceed their revenue or are close to losing money for every mile they drive.
According to their data, the median pretax profit was $3.37. When the billions of dollars in venture capital that these companies are losing each year is factored in, Zoepf concludes that "this business model is not now sustainable".
According to MIT researchers, 80 percent of drivers said they work less than 40 hours per week.
It's worth noting that other surveys have concluded different wages for Uber drivers.
Uber dispelled numerous of the study's conclusions.
When asked about the findings of the study, an Uber spokesperson sent the Guardian a statement saying, "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", an Uber spokesperson wrote. These surveys also don't include Lyft. "We have not yet reviewed this study in detail, but an initial review shows some questionable assumptions".