May 07, 2019
A Washington Post article on Uber’s IPO told readers that Uber drivers earned $21 an hour and linked to a study that came out of Stanford as the source. The study actually reports that $21 is the gross pay before deducting driving expenses such as gas and depreciation. This is very clear in the study.
It notes (page 42) the difference where it suggests a net measure might be more appropriate for the issue it is assessing (gender differences in earnings):
“Suppose drivers average 25 cents per mile in costs other than insurance – Uber covers drivers’ insurance costs while driving. A typical Uber driver covers about 20 miles in one hour. The driver earns approximately $15.80 net of Uber’s current 25% average share of driver gross earnings.”
Arguably 25 cents is too low a figure. The federal government uses 58 cents as it per mileage compensation charge. Since Uber covers insurance for the driver, let’s say 40 cents per mile is closer to the mark. That would translate into expenses of $8 an hour, lowering the pay net of expense to $12.80 an hour, almost 40 percent less than the figure in the Post article.
Comments