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Uber is far from perfect. Like, very far. Since it first hit the scene and revolutionized the world of ride-hailing, Uber has since fallen from grace and has seen much of its market share lost to competitors. Between the scandals and controversies of its executives and the alleged poor working conditions and pay of its drivers, Uber has had its share of bad press lately. In March, a study by MIT economists claimed that the median profit Uber drivers brought home was just $3.37. While that report generated its share of press, a new study claims that that figure might actually be a lot higher – but still below minimum wage. Are Uber drivers being compensated fairly?
The latest Uber driver earnings study was conducted by the Economic Policy Institute (EPI), a D.C.-based pro-labor think tank. According to the report, Uber drivers’ equivalent hourly wage is close to the 10th percentile for all American workers’ salaries or wages. This means that in many of the markets in which Uber operates, drivers make far below the minimum wage as mandated by law:
The Uber driver “no benefits” hourly wage or discretionary compensation—the hourly compensation adjusted for an assumption that Uber drivers pay the extra payroll taxes that the self-employed must pay but do not provide a standard benefits package for themselves—falls below the mandated minimum wage in nine of 20 major markets, including the three largest (Chicago, Los Angeles, and New York).
Despite this somewhat depressing finding, the report stresses that due to the fluidity of Uber’s workforce both in terms of turnover and infrequency of work, it can be problematic to attempt to draw conclusions about the impact Uber and other crowdsourced services have on the workforce over all. A large majority of Uber drivers are so-called “short-hour” workers, meaning they only work a few hours here and there to supplement their incomes. Thus, the report concludes, there is no reason to believe that Uber and other “gig economy” jobs reflect larger economic trends.
Still, these data reveal the ugly side of these trendy, somewhat ‘hip’ side gigs: these are not lucrative ways to game the system and make a few quick bucks – these are yet another example of the low-wage economy many Americans find themselves in. And it gets better: Uber cars will soon drive themselves, rendering humans these jobs useless. Isn’t the future great?