A new report from the MIT Center for Energy and Environmental Policy Research found a full 30% of Uber and Lyft drivers are actually losing money while working due to costs associated with the job. The Guardian reports the situation isn't much better for the other 70%, as the median profit for drivers for the two ride-share companies is just $3.37 per hour before taxes. In fact, researchers found 74% of drivers are earning less than their state's minimum wage. “This business model is not currently sustainable,” says Stephen Zoepf, co-author of report. "And the drivers are essentially subsidizing it by working for very low wages.” Researchers surveyed over 1,100 drivers and analyzed vehicle cost data, including insurance, repairs, and fuel.
“It tells you that it’s a great place if you’re a company," the CEO of Mangrove Capital Partners, which has compared the gig economy to sweatshops, tells TechCruch
. "It’s really a poor place to be an employee or be a worker.” A report last year found just 4% of Uber drivers last longer than a year, NPR
reports. The current report found a median earning for drivers of 59 cents per mile and median cost of 30 cents per mile resulting in an average driver profit of $661 per month. “It’s quite possible that drivers don’t realize quite how much they are spending," Zoepf tells the Guardian
. While the report raises further concerns about labor standards and the rights of ride-share drivers, Uber calls it "deeply flawed," and Lyft says it made "some questionable assumptions."
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