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Uber, Lyft drivers make US$3.37 per hour

Uber, Lyft drivers make US$3.37 per hour

$3.37! That's the paltry median hourly profit for Uber and Lyft drivers-after expenses are factored in-according to a new study.

Unlike previous economic analyses that report drivers' gross profits without factoring in operational costs, the MIT paper takes into account how much drivers spend on things like insurance, maintenance, repairs, fuel and the car's depreciation in value, using data from Edmunds, Kelley Blue Book and the Environmental Protection Agency. Lyft offers the same vague insight: "The more you drive, the more you earn".

It's estimated that there are more than 1.5 million Uber drivers in the world.

As of 2017, both Uber and Lyft allow (but do not require) customers to tip their drivers through their respective mobile apps. "The companies are losing money".

Drivers earn a median of US$0.59 per mile (US$0.37 per kilometer), while incurring a median cost of US$0.30 per mile, the report said, adding that for almost one-third of drivers, the costs are ultimately greater than the revenue.

While Lyft is yet to acknowledge the study, an Uber spokesperson released a statement claiming "its methodology and findings are deeply flawed".

The paper reported the average driver profit to be US$661 per month. The Verge reports that in 2016, the legal consulting firm Carlton Fields pointed to the possibility of data breaches and warned that ride-sharing companies like Uber "risk potential imposition of stiff penalties for data breaches, and business associate agreements should be implemented between providers and ridesharing companies".

The paper also received some scrutiny from Harry Campbell, founder of The Rideshare Guy, an industry blog.

The researcher also found that, in the USA, an overwhelming majority of profits made while driving for Uber and Lyft aren't taxed. Existing surveys also tend to focus on hourly rates rather than per-mile rates; nearly none of them look at driver costs.

The company suggested one of the survey questions asking drivers to report on-demand activities could have resulted in low figures, because drivers might not have reported total income. This basically means that they're paying money in long-term to be a driver for these companies instead of earning money. Stephen Zoepf, a co-author of the paper, told The Guardian that "it's quite possible that drivers don't realize quite how much they are spending".

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