It happened live, Uber, the initiator of the rideshare move in the transportation industry, slammed MIT over their wrong analysis regarding drivers’ hourly pay! It turned out that the Massachusetts Institute of Technology carried out a study regarding the paycheck for drivers who work for the likes of Uber and Lyft which returned with a negative conclusion.
According to them, the amount drivers are paid is below the minimum wage of $5 per hour. In fact, their median profit was estimated at $3.37 per hour and remained in the low across various states in the country.
However, Uber Technologies, a rideshare transportation network firm that facilitates the conveyance of food, people, and luggage across 633 cities worldwide, destroyed the claims deposited by the institution.
Uber faults the method on which the analysis was carried out
The rideshare company expressed that the university had done a poor work in their compile research, stressing that a wrong approach towards the numeric facts was used. The company further stated that they awaited a new numeric conclusion in the coming week.
The research carried out by the Institute of Massachusetts utilized the data it obtained from a blog named gig economy by Rideshare Guy. In their recent posting, gig economy surveyed 1,150 drivers working with Uber and Lyft.
After carrying out their calculation on fuel and vehicle expenditure, they realized that the amount earned by 74% of Uber or Lyft worker was by far lower than the federal governments stipulated minimum wage for each state that they operate in.
However, this claim didn’t last long as Hull, the CE of Uber, stepped forward to challenge the study’s result on the firm’s Medium blog. There he cited other surveys that Uber had carried out in regards to the minimum earnings of their drivers, per hour.
According to him, one of their studies was conducted in partnership with Stanford, and the other with Princeton; however, both came back with conclusions far higher than that of the Institute. The amount derived was $29-$21 as the gross income obtained hourly.
To further buttress his point and reveal to the public the error in Massachusetts Institute of technology’s publication, the Chief Economist of Uber pointed out that the original survey on which the institute carried out its analysis from, possessed higher hourly earnings than the university did. According to him, the survey by Rideshare Guy’s displayed that the median hourly earning obtained by rideshare drivers was around $15.68.
The author of the study publication agrees with Uber’s Chief Economist
After the criticism led by Uber’s CE, Hull, the author of the researched Publication by the Institute, Stephen Zeof, finally responded. On Monday, when he replied the universities’ critics, he first thanked them for pointing out the errors which were found in their survey paper.
Furthermore, he stated that the questions highlighted in their paper should have been phrased clearly, but went further to encourage Uber to come out with an explicit assessment of the profit range a ride-hailing driver makes per hour after the necessary reduction of purchasing, maintaining, and operating a vehicle has been stricken off.
According to him, there were likely to be two turnouts: one, when utilizing the monthly income in the calculation whenever it is applicable and including the hourly income using the reported work schedule, will increase the median profit to $8.55. Two, when the analysis is done with only the Hourly income numbers, the median profit will rise to about $10 per hour.
Zoef further stated that he will invest more time into conducting a more thorough revision of the published paper and would release the result next week Monday. However, he expressed that according to the numbers derived from both methods of calculation, the Drivers still earned lower than what is mandated as a minimum wage in their respective states. Furthermore, he expressed that aside from the earnings, some drivers lose money while operating.
Though the paper suffered serious criticism from the likes of Uber, it received lots of attention from drivers and beyond. Hence, the much traffic is an attestation to the possibility that these ride-hailing companies which provide drivers, in their corporation, an avenue to work independently and on whatever hours they pleased, where milking off any potential of good profit for their partners.
In conclusion, Zoepf said that the question put out on revenue has the chance of being misinterpreted by the firms’ drivers who answered their queries. However, he promised to have a relook on the survey in hopes of getting better results in the following week.
