Posts Tagged ‘Uber’


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Posted: 28 June 2016 in Uncategorized
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No, Uber is not a path to personal freedom and financial independence.

Far from it.

According to internal Uber calculations, provided to BuzzFeed News, based on data spanning more than a million rides and covering thousands of drivers in three major U.S. markets—Denver, Detroit, and Houston—drivers in each of the three markets overall earned less than an average of $13.25 an hour after expenses.

Uber says it doesn’t know how much drivers on its platform actually earn per hour, after expenses. Still, Uber’s internal pricing models, found in the spreadsheets provided to BuzzFeed News, do generate rough estimates of driver net pay. But in internal communications seen by BuzzFeed News, Uber explicitly discourages employees from comparing these estimates to the minimum wage.

A BuzzFeed News review of the rough internal net pay estimates contained in the leaked documents determined that the models Uber used are highly abstracted and oversimplify certain key calculations. Rather than relying on Uber’s figures, BuzzFeed News conducted an independent analysis of the raw trip data and driver data. Uber subsequently recalculated BuzzFeed’s estimates using a broader and more detailed set of internal data — which it declined to share directly with BuzzFeed News. The company did, however, conduct this recalculation according to BuzzFeed News’ methodology — which it said was “solid” — and did so in the presence of a BuzzFeed News editor and reporter.

Based on these calculations, it’s possible to estimate that Uber drivers in late 2015 earned approximately $13.17 per hour after expenses in the Denver market (which includes all of Colorado), $10.75 per hour after expenses in the Houston area, and $8.77 per hour after expenses in the Detroit market, less than any earnings figure previously released by the company.

What this means is that Uber drivers (at least in Denver, Houston, and Detroit) earn about the same as or less than the average for “taxi drivers and chauffeurs,” which in May 2015 (according to the Bureau of Labor Statistics) was $13 an hour.

And just so we understand how little drivers make—inside and outside the so-called sharing economy—the average hourly pay for production and nonsupervisory workers in May of last year was $20.99.

Or just compare that to the net worth of Travis Kalanick, the CEO of Uber Technologies: $6.2 billion.

Clearly, the only sharing going on in Uber is from the bottom up.


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According to a new study by JPMorgan Chase, about 3.1 percent of American adults earned income from the so-called Online Platform Economy (from Uber and TaskRabbit to eBay and Airbnb) between October 2014 and September 2015. (This represents a 47-fold increase over three years, beginning in October 2012.) And the financial significance of the gig economy is growing:

We find that the Online Platform Economy contributed significantly to the bottom line for certain segments of the population, notably labor platform participants in general, and specifically labor platform earners who live in San Francisco, or who are 35 and older or have low-to-moderate incomes. Among these segments, platform earnings represented, on average, more than a fourth of their income over a 12-month span.

Many dream that the “sharing economy” represents an alternative to the grotesque levels of inequality created in the rest of the economy.

As it turns out, it’s just that—a dream. The gig economy is itself contributing to increasing inequality across the U.S. economy.


Eric Morath notes that “wealthier Americans benefit from the gig economy’s ability to generate more income from their assets.”

Of top income earners who did participate in the gig economy, 82 percent did so by renting an asset like a house or selling products they made or already owned. They did so through capital platform systems such as renting out property through VRBO or selling crafts on sites like Etsy.

Low- and moderate-income individuals were much more reliant on labor platform earnings (from working as an Uber driver or a TaskRabbit mover) than the rest of the population. Labor platform earnings represented more than 25 percent of annual income for participants in the bottom three income quintiles compared to just 20 percent of annual income for labor platform participants in the top income quintile.

And then, not even mentioned in the JP Morgan Chase study, there’s the capital behind all the various online platforms—whether working, renting, or selling. Uber CEO and cofounder Travis Kalanick is now supposedly worth at least $5.3 billion.

Not surprisingly, the gig economy is characterized by the same unequalizing, capital-labor dynamics as the rest of the capitalist economy.