Avedian says wages are higher in Seattle than Los Angeles, where he lives, in part because the market is smaller. But he takes issue with the Cornell researchers’ decision to dismiss some repair and insurance costs. Avedian advises drivers to buy insurance specifically designed for ride-hail drivers, which can cost more than $100 a month. He estimates he takes home about $20 an hour, but only by obsessing over details
like which rides to accept and decline. He thinks most drivers make minimum wage or less.
“To make more than $23 an hour, you not only have to be good. You have to be lucky,” says Jay Morran, who drove for both companies in the Los Angeles area until early this year.
The second paper
, commissioned by Seattle and written by economists James Parrott and Michael Reich, calculated driver pay very differently. It’s based on an online survey completed by more than 6,500 licensed Seattle ride-hail drivers and reflects one week in December 2019. Whereas the Cornell work calculates driver expenses at 19 cents a mile, the Parrott and Reich one pins it closer to 52 cents a mile, including insurance, a cell phone, and vehicle cleaning. “This is the biggest source for how [the Cornell researchers] came up with net pay being so huge: They’re just not accounting for business costs,” says Reich, an economics professor at Berkeley’s Institute for Research on Labor and Employment.
The Parrott–Reich study also counts all of the time drivers spend logged on to the app as “working time,” even if a driver is waiting for a ride. By contrast, the Cornell paper counts waiting time only if it leads to a ride; that reduces the total working time—and increases the per-hour estimated pay—for each driver. The Parrott–Reich paper was reviewed by University of Washington transportation experts and the city of Seattle. The authors did similar research in New York City, which helped that city’s Taxi and Limousine Commission set a driver minimum wage last year
In a statement, Seattle Mayor Jenny Durkan said the city would use the Parrott-Reich study to set a minimum wage for drivers equivalent to at least the city’s “minimum wage plus reasonable expenses.” The statement said the study “comes at a time when protecting workers without a safety net is even more critical.”
Other studies, based on research from driver survey data, suggest that drivers make between $5.72 and $14.17 an hour after expenses, depending on the regional market and which costs are included in the calculation.
It is very rare for ride-hail companies to share data with outside researchers. The companies have even sued some cities to block rules that would require them to share data, in part, they say, to protect driver and rider privacy. Most academic work about driver wages comes about in two ways: Either an economist who works for Uber or Lyft
is a coauthor, or an academic collects data on their own
, either through surveys or—in the case of Stanford University
and the University of Colorado
teams—by actually driving for the apps themselves and mining the data for revelations.
An Uber spokesperson called the Cornell study “an independent, data-driven picture of the full earnings experience of ride-share drivers” and said, “We hope policymakers will take a fact-based approach as they consider new policy proposals by using the insights” from the work. Uber said the Parrott-Reich study “is based on incomplete data and flawed assumptions about drivers’ experiences that are unsupported by facts, evidence or reality.”
In a statement on the Cornell study, a Lyft spokesperson said, “We are hopeful the city [of Seattle] will use this objective data to establish a meaningful guaranteed earnings floor.” Neither company immediately responded to questions about the Parrott–Reich analysis. Now the city will decide how much its drivers ought to be paid.
*by Aarian Marshall via Wired Magazine*