Ride-Hailing Work Isn’t a Living for Most Drivers, Study Finds

Ride-hailing platforms such as Uber and Lyft have come to dominate the gig economy since 2013, according to a new study by the JP Morgan Chase Institute.

Meanwhile, annual income per driver has fallen by more than half, but that may say more about how much drivers work than about how well they’re compensated when they do.

In the study, released September 24, the think tank analyzed payments through 128 different gig-economy platforms to 2.3 million “de-identified” Chase checking accounts in the US between October 2012 and March 2018.

The researchers found that transportation income went from a negligible share of the gig economy to bigger than all the other forms of income combined. The other categories were online selling, rental services like Airbnb, and non-transportation work, such as dog walking. The researchers included delivery platforms such as Uber Eats and Postmates in the transportation category.

As ride-hailing has grown, controversy has followed. Lawsuits have challenged the practice of treating drivers as independent contractors rather than employees. Ride-hail drivers in New York City have joined with cab drivers to demand guaranteed minimum pay. An MIT study released in March found the median pre-tax income for Uber and Lyft drivers was just $3.37 per hour — though after the companies challenged the finding, the researchers said they would review the study.

The JP Morgan report’s finding on income per driver sounds provocative: From 2013 to 2017, annual income per driver fell by 53%. But the researchers didn’t measure how much the average driver makes per hour.

Instead, the study offers some insights into where and when drivers work. Of all the participants who generated earnings through transportation platforms, more than 58% only brought in that income for one to three months of the year. More than three-quarters worked for six months or less of the year.

Uber and Lyft say this reflects how drivers are using their platforms. The number of Uber drivers in the US has risen from 160,000 to more than 900,000 since 2014, and the share of those who drive part-time has grown along the way, Uber detailed in a Medium post. More than half of all Uber drivers work with the platform less than ten hours per week, the company notes. In an e-mailed statement, Lyft reported a similar trend. It said hourly earnings have been stable in recent years.

In the months when drivers are working, their driving income is important: It’s 54% of total observed take-home income. But spread across all the months of the year, it’s only 20%, JP Morgan found. The study concluded that the gig economy isn’t replacing traditional sources of income for most families.

For the other gig-economy sectors, income was even more sporadic. However, income per participant has risen in all those categories since 2013. Annual earnings have risen 1.9% for non-transport work, 9.4% for online selling, and a remarkable 69% for leasing.

The hotspots for participating in the online economy were San Francisco — home to many gig startups, including Uber and Lyft — and the state of Nevada, the study found. In March 2018, about 2.8% of families in those places generated income from a gig-economy platform. The study didn’t include data from states where Chase has no retail branches.

— Stephen Lawson is a freelance writer based in San Francisco. Follow him on Twitter @sdlawsonmedia.