‘Criticism is valid’: Uber, Lyft drivers might make more than $3, MIT paper author says



After a working paper published by the Massachusetts Institute of Technology claimed 74% of Uber and Lyft drivers take home less than minimum wage, the paper’s author said his claims might be wrong.

The paper suggested median profit for Uber and Lyft drivers is $3.37 per hour after vehicle expenses but before taxes, far less than the federal minimum wage in most states. Findings are based on a survey of more than 1,100 Uber and Lyft drivers.

Uber and Lyft criticized the findings, saying the survey questions were flawed.

Stephen Zoepf, the paper’s lead author, responded to the criticisms Monday, thanking Uber’s chief economist for his feedback.

“In retrospect the survey questions could and should have been worded more clearly,” Zoepf said in a statement.

Zoepf proposed two different results. In an adjusted scenario using monthly revenue numbers when available and calculating hourly numbers using the working schedule reported, median profit rises to $8.55. In another method, using reported hourly revenue numbers when available, median profit rises to $10 per hour.

The author said he “will be conducting a thorough revision of the paper.”

In both scenarios, some drivers are still making less than minimum wage in their state and some drivers lose money, according to Zoepf.

The paper’s publication last week had attracted attention, seeming to confirm concerns that the ride-hailing companies’ independent contractor model — where drivers work for themselves, rather the companies as employees — make it close to impossible for drivers to profit without working dangerously long hours.

But the companies found fault with the study’s model.

Uber’s Chief Economist Jonathan Hall further criticized the paper in a post published on Medium, saying flaws in the methodology inaccurately skewed the drivers’ responses on what they earned.

Sunday, Uber’s new CEO Dara Khosrowshahi jabbed MIT on Twitter, saying “MIT = Mathematically Incompetent Theories (at least as it pertains to ride-sharing)” andpointed to two alternate surveys, including one from blog publisher The Rideshare Guy that found drivers made, on average, hourly earnings of $15.68 — though that’s before vehicle expenses like gas and maintenance.

“We thank Professor Zoepf for acknowledging a major shortcoming of his methodology and support his decision to conduct a thorough revision of the paper over the coming weeks,” Michael Amodeo, a spokesperson for Uber, said in a statement.

Lyft remains critical of the data.

“While the revised results are not as inaccurate as the original findings, driver earnings are still understated,” Adrian Durbin, a Lyft spokesperson, said in a statement. “MIT’s study has fundamental methodology problems.”

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