A study on ridesharing drivers - The Economics of Ride-Hailing: Driver Revenue, Expenses and Taxes - was released last week by the MIT Center for Energy and Environmental Policy Research.
Their finding that the ridesharing drivers working for firms like Uber and Lyft have median earnings $3.37 per hour was widely covered in the press.
The only problem was their analysis was flawed, something they conceded this week.
The main flaw was pointed out by Uber in a post by their chief economist. It's a technical flaw, so we won't bother covering it here. See the Uber post for the details.
After reviewing Uber's rebuttal, the MIT researchers re-ran their numbers and are now saying ridesharing drivers median income is between $8.55 per hour and $10.00 per hour.
Both Uber and Lyft say this is still too low, and point to several studies showing higher earnings. In response, the MIT researchers say they are going to spend a few weeks reviewing their revised results.
Our research 18 months ago on ridseharing driver earnings (net of expenses) found a $12-$14 per hour range for an average Uber/Lyft driver.
But our data - like the data used in the MIT study - was based on survey questions asking rideshare drivers what they estimate their hourly gross earnings to be.
It's well known that people often misstate their earnings (intentionally and unintentionally) on surveys, which makes this data imprecise at best.
It's also important to point out that there is no "average" or "median" rideshare driver. Most work part-time, drive different types of vesicles, pay different amounts for insurance, gas,etc. This means rideshare drivers have different cost structures. So using a set of average costs - as the MIT study and our study did - also leads to imprecise results.
Combining these two factors means any findings using surveys to get revenue and averages for the cost data are going to have large margins of error.
So large, we believed, that didn't publish our rideshare earnings study results. We simply didn't have enough confidence in the data.
All of this points out how hard it is to study this stuff.
After all, the folks at the MIT Center for Energy and Environmental Policy Research are obviously smart, talented researchers. But even they got it wrong.
So, do Uber drivers only make $3.37 per hour? No.
But we still don't know how much, on average, they actually make.
For more this, see The Rideshare Guy's article on the study. In addition knowing the rideshare industry as well as anyone, their data was used in the MIT study.
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