Uber drivers earn $97,000 per year, only legends remain

Uber, the company that was the first egg under the sharing economy model, has now "subverted the traditional taxi industry" "The originator" and is sought after. The company recently announced that $97,066 is the median annual income for drivers of the New York City ride-hailing service UberX. US$97,066 has become the American dream that Uber describes to taxi drivers and Uber’s most attractive “golden sign” to job applicants. But what’s the mystery behind this number? What are the real situations drivers face?

In New York, the birthplace of Uber’s grassroots driver-to-money movement, $97,066 has begun to lose its alluring quality.

Slate magazine reporter Alison Griswold made an in-depth report on this, and all the exciting news is in the article.

In just four years, Uber has weaved a huge business network that now covers more than 100 cities in 45 countries around the world, employing tens of thousands of drivers to serve millions of customers. In June this year, Uber received US$1.2 billion in financing, and the company's overall valuation increased to US$17 billion, becoming one of the most highly valued technology startups in history.

Data is indeed eye-catching, and Uber has always promised to be "data-based" because this exactly meets the company's needs. As a company that makes a fuss about "hitchhiking", the car rental or ride-hailing services provided by Uber are no different from those of other peers. However, this new generation technology company has grasped the key to becoming a very profitable prospect: how to improve taxi-hailing. s efficiency. With the help of its unique algorithm, Uber allows drivers and customers to experience the charm of floating pricing. The idea behind this type of pricing is that the more demand there is, the more expensive a ride should be. By implementing this pricing strategy, Uber has better matched supply with demand and systematically eliminated inefficiencies in car services. And those algorithms supported by data also laid the foundation for Uber’s success.

The legend of $90,000 has been eclipsed. Among all of Uber’s important figures, the figure of $97,066 is particularly eye-catching.

At the end of May this year, Uber stated in its corporate blog that $97,066 was the median annual income for drivers of New York City’s ride-hailing service UberX. The company's blog wrote:

"Drivers working with UberX across the United States show that being a driver can be a good business. On the contrary, often American taxi drivers live below the poverty line ...while wealthy taxi company owners squeezed money from drivers who had no other choice but to drive.” When Uber hires drivers exclusively for its platform in New York and around the world, the end result is that. What attracts the attention of applicants is probably the "golden sign" that can easily earn more than 90,000 US dollars a year.

However, as Uber’s commissions have increased and taxi fares have dropped, the halo of this “golden brand” has faded, and drivers have begun to become disappointed with the company and its prospects. Demonstrations have broken out in major cities from London to San Francisco to New York, where drivers have united to speak out against Uber — and why? Uber was once the creator of a better life in their eyes, but now it is nothing more than a "conspirator" and a "scammer."

In New York, the birthplace of Uber’s grassroots driver-to-get-rich movement, $97,066 has begun to lose its allure.

This summer, Uber launched the slogan "Cheaper than New York City taxis" and decided to cut car rental fees by 20%. The company claims that even if the charges are reduced, as the demand for cars increases, the time to pick up and drop off customers will decrease, and the number of rides per hour will increase accordingly. Drivers will not be affected, and their income will not decrease but increase. Uber asserted in a corporate blog: "They (drivers) will make more than ever!"

So far, however, New York City drivers disagree. A driver named Garay mentioned the impact of the 20% price reduction to reporters: "Uber said that drivers would not suffer losses, but in fact drivers suffered losses. Because from a real business perspective, those data are Impossible.” In the eyes of drivers, the mileage that can be increased when taxi prices are reduced reaches a certain level.

Garay also stated that the driver is both an independent contractor contracted with Uber and a licensed driver specially authorized by the New York City Taxi and Limousine Commission. New York is one of Uber's largest markets. Uber offers three levels of services in the city: UberX, which charges the lowest fee, UberBlack, which charges a mid-range fee, and UberSUV, which charges the highest fee. Not only do different grades of cars have different fees, but Uber also charges drivers different commissions. UberX takes 20%, while UberBlack and UberSUV charge 25% and 28% respectively. According to this charging standard, New York City will charge 8.875% sales tax to Uber’s contracted drivers, and these drivers will have to pay a 2.5% premium to the Black Car Fund.

Garay revealed to Slate that as of October 13, he worked 40 hours a week and earned $1,163.3 in fares. After deducting the above expenses and taxes, his net income was $850. In addition, Garay estimates that the total cost of gas, car washing, car insurance, parking and vehicle maintenance will be at least $350 per week. After deducting personal income tax, Garay's actual income per week is about US$480, which is about US$12 per hour of driving.

The hourly wage of $12 is not particularly low, but it is far from what Uber preaches to its drivers. Garay claimed to work 40 hours a week, but Uber's notice stated that his "online work hours" that week were only 32.8 hours. The secret of the difference between the time mentioned by Uber and Garay is that they refer to two kinds of time: one is the time spent on the mobile app, and the other is the time the customer actually takes the bus. Drivers usually refer to the former, which is the time it takes to find a ride using the app, while Uber divides the entire time period and is interested in the time it takes a passenger to take a ride.

Dilemma of the “intermediary” model

A key issue is: in the so-called sharing economy, companies like Uber act as “intermediaries” between service buyers and service providers. ” For a company, who really has the decision-making power?

There is no clear answer to this question. The three major companies in the industry have adopted two different strategies to build their own platforms: one is Uber’s method: to please customers by lowering fares. Lyft, another ride-hailing service company under the banner of the shared economy, has a similar approach to Uber; the third major company, Gett, chose to please its drivers by increasing their wages.

"That's what's interesting about that model," said Wally Hopp, senior associate director for people and research at the University of Michigan's Ross School of Business. "It's not clear yet who are the customers." Employees are the most important to them.

In terms of methods of winning customers, Hope believes that companies such as Uber and Lyft have deviated from their principles of supporting the free market and artificially lowered prices.

"I think some of the things they do are priced too low, and you can only use them for a short period of time, and maybe that's costing the company's own funds, and maybe it's sacrificing the company's goodwill in the eyes of drivers," Hope said, " Uber didn’t let its algorithm work, and it didn’t allow the floating price to reach a level that the market could absorb automatically. So, they are actually lowering their asking prices to gain market share, keeping prices lower than what drivers expect. ”

Considering Uber’s rapid development and evolution, as well as the growth rate of its employment, the company will still face employee protests in the future. Renn Casser, head of Uber’s external relations department in the Americas Lane Kasselman dismissed the argument, telling Griswold: “We see it differently, the driver is our customer and the one who owns the software. They are constantly strengthening themselves, promoting themselves, and acquiring tools for small business. ”

He also said: “We create 50,000 jobs every month through our platform. Drivers are excited about the opportunities that are emerging. In response to the protests that took place this week, Griswold said, "We don't have any drivers protesting in our New York, Chicago, or Washington divisions. In fact, only a handful of people protested in Los Angeles and San Francisco. "But this statement is obviously inconsistent with the information published by the Uber Driver Network on Facebook.

The reporter (Griswold) has spent several months reporting on Uber, and has never encountered anything about Uber. A driver who earns as much as $90,766 a year

Some drivers told him they make about $1,000 a week after sales tax and commissions, which is close to $50,000 a year. Gas and other expenses. Adam Cosentino, one of the drivers Griswold interviewed for Uber, also has an MBA and works 30-40 hours a week for Uber. He also uses what he has learned to work during the busiest hours, and he is still satisfied with his weekly income of US$800-1,000. In fact, after deducting US$230 for gas and car washing per week, as well as other expenses such as commissions, Ke is still satisfied. Centino probably actually made about $400 a week, Griswold reminded him: "That's not much money. "

Cosentino thought for a while, and then admitted: "Yes, there is not much income. But that's because I don't spend all my time driving. If you work a total of 60 hours, six days a week, most people should be able to earn $2,000 a week. Griswold asked him if he knew anyone who worked like this. He replied: "I haven't met anyone like this myself." I can only tell you my personal experience. If I drive 60 hours a week, I'm guaranteed to make $2,000. ”

Cosentino’s firm belief in Uber’s promotional data is a good thing for Uber. But does this also show from another side how difficult it is to earn an annual income of $90,766 by driving? After all, That's just what Uber says the median driver in New York City earns.

That means that thousands of Uber drivers can roughly reach this level. Could it be that only by interviewing all New York drivers who serve Uber can we get the most convincing conclusion?

This reporter consulted Casselman again out of curiosity, hoping to find a driver who could realize the high-income dream as Uber said.

In the end, the fact he got was this: Uber is still struggling to find such a so-called "model driver"! (This article was first published by Titanium Media)