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Now we know how many drivers Uber has — and have a better idea of what they’re making​ Now we know how many drivers Uber has — and have a better idea of what they’re making​
(2 days later)
Uber drivers in many of the company's major markets are making about $6 an hour more than their traditional — and professional — taxi-driver counterparts, according to a rare analysis of internal data the company released Thursday along with Princeton economist Alan Krueger. In Washington, the difference is about $4.60, in San Francisco it's about $10 and in New York it's closer to $15. The rapidly growing technology company Uber released internal data on Thursday arguing that drivers who use the app to give rides-for-hire in their personal cars are making more money as chauffeurs than professional taxi drivers do — as much as $17 an hour in the District and Los Angeles, $23 in San Francisco and $30 in New York.
These gross earnings don't account for the considerable costs drivers pay to deploy their own cars as modern-day taxis. But Uber argues that these numbers paint a picture of decent work in a shifting economy where tens of thousands of people — nearly half of them with college degrees — have recently found supplemental income and more flexibility doing a job that has long been the domain of immigrants and middle-aged men. Those numbers, released as part of the most extensive peek yet into its business model, have only inflamed debate about what companies like Uber mean for the economy and whether the kind of work they offer is sustainable for the tens of thousands of people who have signed up.
The analysis, drawn from internal figures as well as a survey of about 600 UberX and UberBlack drivers, offers the most extensive look at how fast the company has grown, who's driving for it and how this work supplements their other employment. Krueger, who previously served as chairman of President Obama’s Council of Economic Advisers, contracted with Uber to write the analysis, along with the company's head of policy research, Jonathan Hall. Uber and its boosters say those earnings — and the breakneck pace at which drivers are joining its ranks — offer proof that the company is creating new kinds of opportunity for workers who want neither a 9-to-5 job nor a boss. But some of its drivers and the taxi industry counter that Uber’s earnings data leave out a critical piece of the equation: the steep costs people must pay to operate their own cars as modern-day taxis.
The analysis shows that Uber's drivers in the United States collectively received $656.8 million in payments from the company in the last three months of 2014 (that translated in October to about $17.79 an hour in Washington, and $30.35 in New York). The taxi earnings in comparison — which reflect net income, not gross earnings — come from Bureau of Labor Statistics Occupational Employment Statistics. This new Uber data shows that the number of new drivers signing up with the company has doubled every six months for the last two years. And UberX, the company's economy-class service deploying everyday drivers, has come to dwarf Uber's original black town-car offering in little more than a year: Uber released the new data in a report co-authored by Princeton economist Alan Krueger, a former chairman of President Obama’s Council of Economic Advisers. The analysis, which includes a survey of 601 drivers, suggests Uber’s drivers look notably different from the typical cabbie: Nearly half of the Uber drivers surveyed had at least a college degree, compared with 19 percent for taxi drivers and chauffeurs as reflected in government occupational data.
As Uber has grown, it has become something of an economic Rorschach test. Some see in it the hopeful future of work, where anyone with a car can be his own boss, choosing his hours and determining his income with a flexibility that makes other pursuits — having a family, becoming an actor, going back to school — more feasible. The analysis also reveals for the first time the size of Uber’s driver pool in the United States and the rapid rate at which it’s expanding. In December, 162,037 “active drivers” completed at least four or more trips for the service. The number of new drivers signing up has doubled every six months for the past two years.
Others see in Uber something more sinister, a sign that people who can't find better jobs in a bad economy must settle instead for work as part-time "independent contractors" with a faraway tech company that offers them no benefits. “The more I looked into it, the more I thought this rapid growth is really not a result of a weak job market, but the result of a new opportunity,” said Krueger, who was contracted by Uber to conduct the study.
There has been a shortage of hard data to answer these questions — Are these good jobs? Would they even exist in a better economy? — as platforms such as Uber have proliferated over the past five years. Krueger argues that the numbers Uber is releasing now point to the first picture — Uber as the promising future of work — and not the second. As Uber has grown into a tech giant valued by investors at more than $40 billion, it has become something of an economic Rorschach test. Some see in it the hopeful future of work in a digital age, where anyone with a car (or a home, or a service to offer) can be his own boss, choosing hours and determining income with a flexibility that makes other pursuits — like raising children or going back to school — more feasible.
"When I looked through the survey, I was struck by how many of the drivers already had jobs when they started,"  says Krueger, who says he had full discretion over his research. "They joined Uber not out of desperation, but because it offered new opportunity that could help them smooth their income, smooth fluctuations from other jobs, and add a supplement to their household income. The more I looked into it, the more I thought this rapid growth is really not a result of a weak job market, but the result of a new opportunity." Critics, meanwhile, see in Uber something more bleak, a sign that people who can’t find better jobs in a bad economy must settle instead for work as part-time “independent contractors” with a tech company that offers them no benefits. For these critics, the numbers Uber released Thursday did little to dispel that skepticism.
The survey, gathered from drivers in 20 markets including Washington, found that 80 percent were working full- or part-time shortly before joining Uber. Just 8 percent said they were unemployed before driving for the service, suggesting that Uber hasn't been flooded by would-be workers who could find no other jobs. Nearly a quarter of the drivers said Uber was their sole source of income; 38 percent said they viewed it as a supplement to earnings but not a significant source of them. That may mean that Uber is helping to make up for weak wages in other sectors. “This report is designed to impress American mayors and disguise the predatory nature of Uber’s relationship to its drivers — the company collects money, while the drivers accept all of the risk,” said Dave Sutton, spokesman for a public campaign by the Taxicab, Limousine & Paratransit Association warning against services like Uber.
Krueger also points to the fact that Uber's growth has continued to accelerate as the U.S. economy has, too. In December, Uber says, its internal data captured 162,037 active drivers who gave at least four rides that month in all of its U.S. markets. That's the first time we're seeing how many drivers Uber has nationally. Uber’s earnings data suggested that drivers in its biggest markets are making about $6 an hour more than local taxi drivers and chauffeurs. But Sutton countered that the comparison is unfair given that Uber drivers must deduct from their earnings the costs of gas, car insurance and vehicle maintenance.
And this is what new sign-ups have looked like: Increasingly, drivers have organized protests against the company in U.S. cities, objecting to fare cuts that have lured new passengers to the service at the expense of driver pay.
This last chart breaks down the growth of Uber drivers in each of the 20 cities where drivers were surveyed online for the company by Benenson Strategy Group: Fernando Chiara, a 26-year-old working full time in the insurance industry in Los Angeles, began driving nights and weekends for Uber to make extra cash in the summer of 2013. At the time, he said, he regularly made $700 to $900 a week, before expenses, working 20 to 30 hours.
That survey suggests that these people driving for Uber look notably different from your average cabbie: About 48 percent have a college degree (compared with 19 percent for taxi drivers and chauffeurs in the same 20 markets, using American Community Survey data). More of Uber's drivers are white than in the taxi profession, and their ranks include modestly more women: “It was great; there were not a lot of fares, but the prices were a lot higher, and that compensated,” said Chiara, who gave rides in his Toyota RAV4. As Uber has done in many cities, it then began to lower fares and the rate drivers earn per mile.
The survey data also portrays a rosy picture of how content Uber drivers are, with 71 percent saying the survey had boosted their income and a slightly higher share saying that Uber had given them more control over their schedules. “A fare that used to be 40 bucks started to be 30 bucks, then 28 bucks and 25 bucks,” he said. “Now you can do the same fare in 15 to 16 dollars. For me, it’s not worth it for that.”
These numbers, though, contrast with growing protests by Uber drivers who are upset that the company has cut into their pay while trying to make rides ever-cheaper for passengers — Uber's other set of customers. If the picture Uber is sharing today is a truly representative one, it still raises a difficult question for the company's future: Can Uber keep drivers happy — and keep their pay up — as the company grows, as it tries to satisfy investors, as it devises new ways to offer transportation so cheap Uber may one day compete with public transit? Chiara stopped driving for the service in December, at a time when Uber says 40,000 other new drivers in the United States signed on.
David Plouffe, Uber's senior vice president of policy and strategy who worked with Krueger in the Obama White House, insists none of those goals are incompatible. Uber’s driver survey reflected few of these concerns: 71 percent of respondents said they had boosted their income and financial security since joining the service. And 73 percent said they prefer a job where they choose their hours and work as their own boss, relative to a 9-to-5 job with a set salary and some benefits.
As Uber continues to expand, it probably will face multiple pressures to keep those drivers happy and their wages up. It must drive down prices to lure new passengers without pushing more drivers like Chiara away, all while keeping up the explosive growth that has prompted investors to pour billions into the company.
“Looking forward, these [earnings] may go down in the short run even further as Uber tries to generate the numbers that it needs leading up to its IPO,” said New York University Stern School of Business professor Arun Sundararajan, referring to the broad expectation that Uber will become a public company in the coming years. “But I think that, over time, what will happen is that wages are going to go up.”
He predicts that drivers will become more organized. And the amount of time they spend waiting on fares will shrink as more passengers use the service, making each hour of driving time more productive and lucrative.
David Plouffe, Uber's senior vice president of policy and strategy who worked with Krueger in the Obama White House, predicts a similar future.
"As long as demand keeps growing — and we see no sign that it won’t — that means there are more riders, and that means drivers will be doing more trips per hour," Plouffe says. "The more efficient the driver is, the more money they’re going to make. That’s clear in all of our data.""As long as demand keeps growing — and we see no sign that it won’t — that means there are more riders, and that means drivers will be doing more trips per hour," Plouffe says. "The more efficient the driver is, the more money they’re going to make. That’s clear in all of our data."
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