While current and prospective Boston uberX drivers have been told they can potentially make upwards of $50,000 shuttling Uber users around for more than 40 hours per week, the tech company appears to be cooking the books.
Fusion.net senior editor Felix Salmon (@felixsalmon) has been doing some digging on the the “the economics of ‘everyone’s private driver,” focusing specifically on Uber’s claims that New York and San Francisco uberX drivers can earn an average of $90,000 and $74,000, respectively.
On June 1, in response to a online Time magazine report, Salmon took to task the income figures provided by Uber; rather than making $90,000 and $74,000 in New York and San Francisco, respectively, Salmon calculated that uberX drivers in those cities actually make about $76,000 and $60,000.
Salmon later admitted in a June 8 post his original calculations were based on a 40-hour week, and neglected a Washington Post report that noted Uber sells potential uberX drivers by using a sample of drivers working more than 40 hours per week. Subsequently, Salmon deduced that the median hours worked by uberX drivers sampled by Uber in the company’s blog, is going to be “well over 40.”
For context, this is Uber’s claim that Salmon is investigating:
So, what isn’t Uber telling uberX drivers?
- Uber fails to specify exactly what 40-plus hours a week means.
- Uber isn’t upfront about how much net income full-time drivers actually stand to make.
- Full-time uberX drivers in New York and San Francisco face annual costs of $15,000 and $14,100 per year for fuel, maintenance, depreciation and insurance costs, respectively. (Note: BostInno contacted Uber for Boston-specific estimates and will update the piece accordingly when we hear back.)
- Uber bases median income figures of uberX drivers on hours logged by full-time, ‘top’ drivers – those who drive 36 hours or more per week on average.
- Most uberX drivers are, likely, part-timers who make the bulk of their money driving 14 to 16 hour shifts at high-volume times, Friday evening through the end of Saturday.
- For uberX drivers to earn the gross incomes Uber claims they can make, full-time drivers in San Francisco, for example, have to work close to 60 per week.
So, what does that mean for Boston uberX drivers?
Part-time drivers, like the subject of an earlier BostInno report, who make $300 on an exceptional weekend night (about $200 net, after Uber’s 20 percent cut and gas money is deducted), can make approximately $21,000 per year. But, in order to make a gross income $54,000 per year, as Uber claims Boston uberX drivers can make, a driver would have to work 41.5 hours per week; and, once approximately $14,000 in costs are deducted, full-time Boston uberX drivers net about $40,000 per year.
How does that compare to a licensed Boston cabbie, who drives one the City’s regulated taxis?
Full-time Boston cabbies, who lease taxis for 12-hour shifts at a time, according to an October 2013 Taxi Consultant report, make a little over $59,000 per year. However, factor in at least $500 per week to lease a taxi – which is determined by the going market-rate for a Boston taxi medallion – and full-time Boston cabbies makes about $34,000 per year, driving sometimes well over 40 hours per week. So ultimately, working as a full-time uberX driver in Boston is still more profitable than driving a licensed taxi – Uber’s direct competition.
In an interview with the Wall Street Journal, Uber CEO Travis Kalanick said, “We’re at least doubling every six months. It’s probably more robust than that, but that’s good enough… That’s revenue.”
Because Uber is in need of labor to keep pace with the company’s growth, Salmon explains, it appears they’re skewing income and hours per week figures to attract more drivers.
Is driving an uberX more appealing than driving a Boston taxi? Yes, it appears it is. And Uber’s success is to the delight of many app users, who find uberX trips to be more convenient and, more times than not, superior experiences to Boston cab rides.
But Uber isn’t telling uberX drivers they might have to bust their asses like a regular cabbie to earn those eye-popping incomes.