How much do Uber and Lyft drivers earn in the USA?

While recently passed pay transparency laws are shedding light on compensation in some jobs, there is one type of job where pay is still murky. These are taxi drivers for Uber and Lyft. Edition Business Insider tried to figure this issue out.

Photo: IStock

Over the past few years, research has reached a variety of conclusions about driver hourly pay, ranging from low ($9-$12 per hour) to high ($23-$28 per hour).

These findings run counter to wage data provided by trucking companies. Over the past year, Uber and Lyft said their typical driver makes about $35 and $36 an hour, respectively.

At the same time, Insider spoke with several drivers whose salaries, according to their calculations, range from $22 to $40 per hour.

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These discrepancies are explained by at least two factors. First, the payroll calculations that researchers, drivers, and companies use can vary widely—some of them don't fully account for the expenses and hours that impact a driver's bottom line. Second, driver salaries fluctuate depending on the frequency of trips, vehicle expenses, and how well customers tip.

Regardless of how a driver calculates his hourly earnings, Insider's interviewees agreed that developing a methodology for estimating and tracking his salary is very important. They say it's the only way to make sure driving for Uber and Lyft is worth your time.

Hourly wages for drivers depend on how you define working hours

Uber ($35) and Lyft ($36) per hour figures reflect drivers' pay per active hour, i.e. the period between acceptance of a travel request and its completion.

However, drivers reported that they use online work time—the amount of time they have the app open—to determine their hourly pay. Taking into account the time between trips, which a driver might use to move to an area of ​​higher demand or to refuel, allows for a more accurate reflection of their earnings, they said. The Drivers Demand Justice study used a similar approach, using “all hours of work” to determine a driver’s work hours.

For drivers who are selective about which rides they accept (like Gabe Ets-Hokin, a part-time Uber and Lyft driver in Oakland, California), the difference between active and online hourly pay can be significant. Over the past five years, according to his calculations, his earnings for one online hour were approximately $15-$20 less than for one active hour.

But this doesn't happen to everyone. Jeff Henig, a 63-year-old part-time Uber driver in South Carolina, said because he takes almost every ride, there's little difference between what he earns online and when he's on the job.

Costs such as gasoline and maintenance reduce profits

Five drivers said their driving costs, including gas and maintenance, ranged from $4 to $8 per hour. The $35 and $36 per hour figures cited by Uber and Lyft do not include costs.

These costs vary depending on the driver's vehicle. Some people use electric vehicles to reduce gas and maintenance costs.

Wesley Johnson, a 64-year-old Uber driver who works about 40 hours a week in the San Francisco area, said in July that driving an electric car saves him more than $1000 a month on gas and maintenance.

Unpredictable customer tips often make up a significant portion of drivers' income

A driver's daily income can vary significantly depending on how lucky he is with tips.

“Some days I get zero tips, and other days I get a tip every ride,” noted an Uber driver from Dallas. “It really depends on the mood in the city.”

Aaron Lavender, a 36-year-old Uber and Lyft driver from Colorado, said tips make up 10% to 20% of his income.

However, Nathaniel Hudson-Hartman, a full-time driver from Portland, Oregon, admitted that if it weren't for tips and ride bonuses, his earnings after expenses would have dropped from $24 to $13 an hour this summer.

Part-time drivers sometimes receive higher hourly wages

Ets-Hokin previously said he estimated he made about $40 an hour after expenses last year.

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But he only succeeds because he now works part-time, 15 to 20 hours a week. He travels only during busy times and chooses higher paying flights. In previous years, when he worked full-time, he earned about $25 to $35 an hour after expenses, he said.

“I think $30 to $50 an hour, net, is a very good salary for a part-time job where I have no schedule and very little responsibility to anyone other than my passengers and my family,” he noted. “I’ll do this as long as I can make $25-$30 an hour.”

Minimum wage laws could help clarify driver pay situation

Uncertainty over driver pay doesn't seem to be stopping Americans from trying their hand at ride-hailing. Uber said the number of its drivers reached a record 2022 million in 5, with more than 70% of new drivers citing inflation as a reason for switching to the platform. Last fall, Lyft said it had the highest number of active drivers in two years.

In New York, Washington and California, drivers have a little more clarity about their earnings thanks to the passage of minimum wage laws. However, whether other states will follow this example remains to be seen.

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