[Bartweiss]

> She drives about 25 hours a week. In one week in May, she earned $604 for 28 hours of work, she said — a slightly better-than-average week. Uber took $160 for the car directly out of her paycheck, leaving her with $444.

So, for 28 hours of work, the driver got a car (with maintenance covered) and a ~$16/hour salary on top. Without the car payment, it's a $21/hour salary. That's apparently a near-average week.

I seem to have missed something, because it looks to me like Uber leant her a car that enabled her to do a job that pays better than even the most ambitious minimum wage initiatives. It's pricy, but so were all of her other options with "terrible" credit. Where's the evil here?

[tyingq]

I agree with most of this, but it should be noted that $16/hour as 1099 income is not at all the same thing as $16/hour as a regular W2 employee. A rough equivalent would be about $11/hour. I think that's high still, as there are costs other than maintenance...like gasoline.

[warfangle]

Average city driving speed for LA is 26.8 MPH [0], which means she's driving around 750 miles per week.

She leased a 2015 Honda Civic, which has a rated fuel economy of 31 MPG.

Assuming she gets the rated gas mileage from her civic, she's buying 24 gallons of gasoline per week for 2.39 [1] per, costing her $57.

AAA gives an estimated 5.51 cents per mile for maintenance and tires [2], costing her $41.

So, take home pay after expenses is $604 - $160 - $57 - $41 = $346, or $12.3/hr.

IANAA, so I don't know which of these expenses qualify for deductions when she files. But an annual pay (after expenses) of $17,992 doesn't leave much wiggle room for paying for an accountant, assuming Uber indentured servitude is her only income generating activity.

0. http://infinitemonkeycorps.net/projects/cityspeed/

1. http://www.losangelesgasprices.com/

2. http://exchange.aaa.com/wp-content/uploads/2016/04/2016-YDC-...

[Bartweiss]

This is mostly a good assessment, but the maintenance cost should be reduced - one part of Uber's lending program is covered routine maintenance. Gas at least should be deductible, I don't know whether the car payments can be counted in whole or in part.

The overall point is well taken, though. There are several hits to real income for Uber drivers that aren't shared by other types of low-wage worker, and while "set your own hours" offers more upside than a normal part-time job, it's limited by how many high-demand hours there are in a week. Rather than extra overtime pay, I imagine hours past her current 28 would give steadily diminishing returns.

[warfangle]

I don't think it matters if the car payments can be counted or not.

But, according to [0] (I'm not sure how accurate/reputable it is; again, IANAA), the deductible portion of $60452=$31,408 is only $2,218.90.

Gas at $5752=$2,964 already extends past that cap.

Assuming her income is taxed before the lease payments are made, and hits her full deductible, she's paying total taxes of $4,437.81

So, net after-tax, after-expense income - I didn't realize that about routine maintenance - is $604-$160-($57 - ($2,218.90/52)) - ($4,437.81/52) = $344 / wk, or $13/hr.

Compared to working multiple inflexibly-houred minimum wage jobs, it's definitely better.

But in no way is it lucrative, or even lower middle class.

[pc86]

In most of the country $13/hr is indeed lower middle class.

[evilduck]

In places where $13/hr is a viable lower middle class wage, Uber is also generally not available as a job.

[untog]

We are specifically talking about Seattle here, though. All the other variables would also be different in different parts of the country.

[rayiner]

Tax deductibility doesn't matter much when you're making under $20k because your marginal rate is so low.

[tyingq]

Great breakdown. Again, though, that's $12.30/hr as 1099 income, subject to self employment taxes,...and no sick days, paid holidays, vacation, unemployment coverage, insurance, etc.

[pfarnsworth]

You realize that the people that demographics of people who like to drive for Uber are those coming from minimum wage jobs, who have none of the above either. Most drivers I talk with love Uber because their pay almost instantly doubles and they have freedom to work as much as they want.

[dragonwriter]

> > no sick days, paid holidays, vacation, unemployment coverage, insurance, etc.

> You realize that the people that demographics of people who like to drive for Uber are those coming from minimum wage jobs, who have none of the above either.

After deducting the portion of SE taxes equivalent to the employer share of payroll taxes (which isn't counted in employee wages), the wage is equivalent to $10.43/hr, which is only a hair above minimum wage in CA.

And, in CA, minimum wage earners are covered by mandates for unemployment coverage and, depending on employer, paid family leave and (since July 2015) paid sick leave.

[pfarnsworth]

Except that your original number is based on 28 hrs work not 40 hrs. And many people who make minimum wage, especially those that choose to be drivers, aren't full-time, and they don't receive any benefits.

[tyingq]

I'm not arguing an agenda. Just seeking to provide clarity...apples to apples comparisons.

[alphast0rm]

> ...and no sick days, paid holidays, vacation

That's not really true - one of the big advantages of driving for Uber is you set your own hours, so you can take time off whenever you would like.

[chinathrow]

No, that would be "unpaid time off".

[devindotcom]

big difference between paid time off and just not working

[aianus]

There is no real difference between the two. If you were a robot working effectively 365 days a year you would be able to command a proportionally higher salary/wage. "Paid" time off is as much of a lie as "employer" payroll taxes.

[dragonwriter]

You'd also need to subtract half of the self-employment taxes (equivalent to the employer share of payroll taxes) to get an employee-wage-equivalent figure. Assuming that the $12.3/hr is the net before SE taxes, SE taxes are about $1.74/hr and the employer-share-equivalent is $0.87/hr, leaving a wage-equivalent of $10.43/hr.

Which is just barely above California's minimum wage ($10.00) today, and not (as suggested upthread) better than the most generous minimum wage proposals.

[calvinbhai]

wow, thats quite a thorough calculation of expenses. But I'd assume a leased car probably has less maintanence costs, but certainly added costs for gas.

I'm not sure if you factored in commercial insurance for a leased vehicle which will be more expensive per month, compared to personal auto insurance for own car. Factoring the commercial/rideshare auto insurance in, will leave little wiggle room.

[cpncrunch]

>it should be noted that $16/hour as 1099 income is not at all the same thing as $16/hour as a regular W2 employee. A rough equivalent would be about $11/hour.

Not quite. You only take off some of the employment taxes, not the income taxes (which you would still have to pay as a regular W2 employee). It will likely only be about a dollar an hour or so.

However the advantage of being self-employed is that you can deduct expenses such as fuel. (Which brings up another point...fuel will need to be considered when calculating net income).

[tyingq]

>Not quite. You only take off some of the employment taxes, not the income taxes

My quick+dirty calculation accounted for just the net added self-employment taxes, plus other differences like state unemployment, employer's share of health insurance, sick days, etc.

[dragonwriter]

> However the advantage of being self-employed is that you can deduct expenses such as fuel.

No, its not. If those expenses aren't reimbursed by your employer (which often they are), you can deduct them as a W-2 employee, as well, so there is no benefit on that point to being a 1099 contractor vs. a W-2 employee.

[toomuchtodo]

You can only deduct those expenses as a W-2 employee if you itemize vs taking the standard deduction. Most people don't itemize.

[ob]

> In one week in May, she earned $604 for 28 hours of work

I wonder if they count "hours of work" as hours with a passenger or as total hours driven. If the latter then she actually "worked" longer hours.

[dragonwriter]

> I wonder if they count "hours of work" as hours with a passenger or as total hours driven. If the latter then she actually "worked" longer hours.

Even if its "hours with a passenger" its still too short; it really should be "hours in which other activities were foregone so that she could be logged in and ready to accept passengers".

[Bartweiss]

From the text of the article, I believe its hours driven. The whole thing was a bit fast and loose with definitions, but I don't think that one is wrong.

So this is an actual hourly wage, but that doesn't mean that a move up to full time at the same wage is possible.

[ebbv]

$160 for a week of using a car is insane especially when Uber is already making money off the work she is doing with the car.

$16/hr with no insurance, no benefits, no nothing is NOT good pay. Yeah it's more than minimum wage but so what? Need I remind you she's driving, literally putting her life at risk at this job?

You really believe $16/hr for driving people around is good/reasonable/generous pay? Even $21/hr? Give me a break.

[askldfhjkasfhd]

While I don't think the actual number is $16/hr per the calculations in the rest of this thread, I do feel strongly that $16-21 / hr for a largely unskilled labor force is perfectly reasonable. (Not for SF, but SF isn't the majority of the country.)

Add in the flexibility of the hours (most drivers I query list that as their #1 thing they like most), and the lifestyle provided seems very reasonable.

It's worth remembering that a lot of these folks are generally service workers. In their other work, they get paid shit (usually close to min. wage), they get treated like shit, and they are at the mercy of the schedule maker. That last point cannot be underemphasized: little fiefs of power bestowed upon the scheduler make for really ugly fast food office politics.

[mslate]

What about gas? What about fees from traffic infractions? What about accidents? While accidents may be low probability, they present a very high expected cost and the areas in which ride-sharing is popular probably have higher rates of accidents.

I'm just saying that this is probably not the full arithmetic for arriving at an ~$16/hr wage.

[Bartweiss]

It's not, and the rest of this thread dives into it a bunch.

Gas and tire wear implies a ~$2/hour hit, roughly.

Tickets are presumably negligible for long-term drivers? Most people get <1 ticket per year, even with long commutes, and I assume that if you're getting ticketed very often with passengers Uber will drop you as a driver, the cutoff is low for that.

Accidents are hard to call - their 'cost' is basically whatever you pay in insurance (plus some adjustment for future insurance hikes if you file a claim). I don't know how the Uber-insurance thing shook out, so I can't speak to that at all.

The $16/hour wage is now at something like $12/hour (very roughly), but that's neglecting the benefits of having a car (I'm assuming most drivers with Xchange wouldn't have cars if they worked elsewhere, otherwise raise the effective wage by $5/hour).

But of course, that's part-time work. It's voluntarily part-time, but you can't scale up Uber driving arbitrarily - presumably you're already working the highest cash-flow hours and will see decreased hourly wages as you add less-profitable driving time.

So I'll stand by a claim that the money is pretty good, at least in <$10/hour minimum wage markets, but it's locked into a no-benefits, part-time status that prevents it from being an especially good living.

[dragonwriter]

> So I'll stand by a claim that the money is pretty good, at least in <$10/hour minimum wage markets

But the whole calculation of the money was based on the earnings of one driver in LA, which isn't a < $10/hour minimum wage market (California has a $10/hr minimum wage).

(And, after taking the employer-equivalent share of self-employment taxes into account, the pay is barely above the equivalent of a $10/hour employee wage.)

[justinv]

I'd also posit that the majority of Uber drivers do not work in <$10/hour minimum wage markets (NYC, LA, SF, Boston, DC, Portland, Seattle) - or rather, the cost of living that they work in would not allow for that to be a sustainable wage.

[russell_h]

I get the sense that Uber drivers are often incentivized to do things that increase their chances of getting a ticket. Then a full time driver spends a lot more time driving than your average person.

[Bartweiss]

I agree that they are. If you're about to miss your exit with a passenger, you might take a risky swerve across a lane to avoid getting a bad rating. Having said that, I still don't think there are lots of Uber drivers racking up tickets, because that gets you fired from your job. So it's a problem for employment, but not a salary factor - by luck or skill, any given Uber driver will still have ~0 tickets.

[Someone1234]

How did you get $16/hour? How much is gas in that calculation?

[Bartweiss]

No gas, it's just hourly after the car lease. Another commenter arrives at ~$12/hour after expenses, but depending on how good the routine maintenance coverage Uber offers is something like $13-14/hour looks about right (pending assorted tax complexities).