Small Wages. Uber Profits.

How would you like to make $90,766 a year just to drive your own car?

According to figures released by mobile ride-sharing app Uber back in May, that was the median income for its drivers in New York City at the time.

The numbers are enough to make most Americans second-guess their own careers.

But don’t go quitting your day job just yet. There are several caveats here that Uber likes to keep hidden under the rug.

The first and probably most obvious thing to remember here is these are New York City figures. $90,766 might sound like a lot of money to some people, but New York City residents would certainly beg to differ.

Average one-bedroom apartments rent for about $3,000 in New York City, and the taxes are notoriously high. It’s far more useful to look at income figures that represent the entire U.S. than to look at an outlier like NYC.

Fortunately for us, Uber released that data just last week.

According to Uber’s most recently released figures, its U.S. drivers are pulling in an average gross hourly wage of $36.16 per hour. Assuming a 40-hour workweek, that’s $75,212 a year.

Still not too bad just for driving a car…

But an Uber driver’s net profit is still far less than what meets the eye. For one, Uber skims an immediate 20% off every fare, bringing the hourly wage to $25.17. That works out to an annual income of about $60,169, which, though slightly less appealing, is still pretty attractive for a job that doesn’t require any form of higher education.

Once you start to add in the cost of gas and vehicle depreciation, though, life as an Uber driver becomes far less exciting. Remember, Uber does not have to bear the cost of gas, maintenance, or insurance, so its partnering drivers are the ones left holding the bag.

It Just Ain’t Fare!

Using a conservative estimate of just 15 mph, Uber drivers are putting somewhere around 600 miles a week, or 31,200 miles a year, on their vehicles.

According to AAA, the average cost to drive a sedan (including gas, maintenance, etc.) in the U.S. is $0.608 per mile. At 31,200 miles a year, that’s an additional $18,969 in operating costs for an Uber driver. That brings our previous $60,169 yearly income to just $41,200 in net profit.

In other words, drivers are making less than half of what Uber is advertising to the public.

Tack on drunk and obnoxious patrons, increased insurance rates, terrible hours, zero benefits, no room for growth, and the occasional pool of vomit in the back of your vehicle, and suddenly being an Uber partner doesn’t seem so appealing.

$90,766 a year just to drive my own car!? I think I’ll pass.

Brilliant Bullying

Despite Uber drivers consistently getting the short end of the stick, there seems to be no shortage of job candidates for the company. There have already been multiple organized protests involving taxi drivers and Uber partners about the wage issue, but the company’s operations haven’t been phased in the slightest.

When it comes down to it, beggars can’t be choosers in such a lackluster job market, and as long as customers are demanding Uber, that’s where the drivers will migrate.

Even if competitors like Lyft and Sidecar came up with a way to better compensate their drivers than Uber does, they’re simply not pulling in enough business.

We all know the old saying, “If you can’t beat ’em, join ’em.” Uber is proving to be the epitome of that right now.

Not only is the company increasing revenue 10 times faster than Lyft…

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But it’s also increasing rides given at a similar pace:

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The further Uber continues to pull ahead of the competition in terms of ride requests, the more drivers are going to want to be a part of that network.

Ultimately, drivers will go where they’re hailed, and it’s seeming more likely every day that in the future, if you want a ride, you’re going to be hailing an Uber — not a taxi or a Lyft.

Until next time,

Jason Stutman

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