Uber by B. Yasanthi Perera & Pia A. Albinsson

Author:B. Yasanthi Perera & Pia A. Albinsson
Language: eng
Format: epub
Publisher: ABC-CLIO
Published: 2019-12-11T16:00:00+00:00

Drivers' Earnings: Acceptable or Not?

Many are attracted to Uber and other gig economy ride-hailing services like Lyft due to their promise of flexibility and relatively high earning potential. Additionally, as a Canadian user/rider who is a sociologist noted, except for two, all her Uber drivers have been “racialized and 75% of the time, they sound like they are newer immigrants, no Canadian accent . . . so, [for some] Uber’s an opportunity to fit into the labor market.” 204 While the company continues to draw providers, driver compensation has been a controversial issue for Uber through its evolution. Indeed, some of the lawsuits discussed in the previous section relate to compensation matters because workers whose positions are misclassified are not covered under employment laws, one of which pertains to the payment of a legal minimum wage.

Initially, in order to grow and have more drivers on the road than Lyft, Uber highlighted drivers’ earning potential. However, based on an investigation, the FTC alleged that from 2013 to 2015, Uber “duped people into driving for its ride-hailing service with false promises about how much they would earn and how much they would have to pay to finance a car.”205 For example, from May until August of 2017, Uber’s website carried a statement in which Kalanick said that the “the mid-range annual incomes of the service’s New York city drivers exceeded $90,000 and the mid-range annual earnings of its San Francisco drivers topped $74,000.”206 However, the FTC investigation indicated that, at the time, the midrange annual income was $61,000 (or 33 percent less) in New York City and $53,000 (or 28 percent less) in San Francisco, and under 10 percent of drivers reached Uber’s advertised compensation levels.207 The investigation also revealed that the company had overstated potential earning in 16 other U.S. locations and had also connected potential drivers with car financing services that charged in excess of what was advertised.208 To this end, Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said, “Many consumers sign up to drive for Uber, but they shouldn’t be taken for a ride about their earnings potential or the cost of financing a car through Uber.”209 Though Uber updated its potential income information in August of 2015, the company paid the FTC $20 million to settle the case.210

An internet search of what Uber drivers earn will retrieve a range of figures. For example, in 2016, The Washington Post, utilizing data from BuzzFeed News, reported that drivers earn $8.77 per hour in Detroit, $10.75 per hour in Houston, and $13.17 per hour in Denver after accounting for expenses (vehicle depreciation, insurance, maintenance, and gasoline).211 An anonymous Uber spokesperson said that Uber “is reluctant to estimate drivers’ expenses, since the app technically doesn’t employ its drivers.”212 Additionally, as the number of hours worked and the type of car one utilizes matters as does the price of gasoline and insurance costs, “It would be wrong, or at least very challenging, he said, to calculate expenses with such a diverse clientele.

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