While drivers for a variety of ride-hailing services in the gig economy are plentiful, a study has shown that they now earn less than they did just five years ago. However, the two primary ride-hailing companies, Lyft and Uber, disagreed, saying that the research methodology was incorrect.
According to JPMorgan Chase Institute, who performed a recent study, drivers who transported packages and people (Uber Eats, Postmates, Uber, and Lyft respectively) and claimed their time/money through apps ended up earning approximately 53 percent less last year in 2017 than they did five years before in 2013. The study primarily looked at all online payments from these ride-hailing services that went into Chase accounts.
Average monthly payments for drivers transporting people or packages declined during those five years from approximately $1,469 in 2013 to $783 in 2017. However, the same study also focused on companies that allowed users to rent out parking spaces, cars, and homes, such as Airbnb and Parklee. These users saw increased monthly payments of up to 69 percent, reaching an average of approximately $1,700.
The study also focused on how many people were currently working in the transportation field within the gig economy. The total population involved with Uber and similar services jumped from two percent in 2013 up to five percent this year (2018). However, half of that population have worked this year, which is up only slightly from 2013.
JPMorgan Chase has a variety of reasons for such a decrease in earnings, such as drivers who work fewer hours, Lyft and Uber paying lower rates, and a decrease in trip pricing. Those on the research team also claimed that the demand for such services hasn’t necessarily increased to match the amount of drivers on staff.
Uber Fights Back
After the study was published, Uber wrote a blog that attributed the findings to the fact that many drivers want to work part-time. They claim that the findings reinforce what they have already known: people want more flexible work arrangements, which is driven by people who use such platforms as Uber on the side.
For many years, Uber has claimed that their drivers are part-timers and aren’t interested in working for them full-time. Most drivers already have a full-time job and want to use Uber as a way to make extra money when they want. They currently claim that over 50 percent of their drivers don’t even work 10 hours a week.
Uber also had problems with JPMorgan Chase’s metrics that sited monthly earnings saying that naturally, more drivers would decrease the monthly earnings of all drivers. They claim that hourly earnings are a better measurement tool. Lyft, one of Uber’s largest competitors, agrees with these issues.
They have said that the study should have examined hourly earnings because it is the metric most drivers want to know. If they had done so, the results might have shown more stability in driver earnings for recent years. Along with such, JPMorgan Chase did not look at any other accounts for payment, such as PayPal.