In response to concerns of shirking driver paychecks, Uber says it will guarantee driver wages in every city where the company is also cutting costs for riders. Uber claims that cutting costs ultimately leads to better wages (12 percent better wages to be exact). But just in case some drivers get hosed by changes in prices, it wants to give drivers some peace of mind.
Now, each city may vary and we don’t have details about every location. An Uber spokesman tells us that in one major city, Denver, the company will guarantee average wages of $19.90/hour, so long as the drivers are working most of the hour.
So how does that stack up to other jobs, and is it enough to live on? I did some back-of-the-napkin calculations and compared an Uber driver’s net take home pay to MIT’s living wage calculator and a part-time UPS package handler ($9.27 and $13.96 respectively).
There have been many different attempts to estimate how much Uber and Lyft drivers actually earn after factoring in the costs of owning a car. The most comprehensive seemed to come from Nerdwallet, which included costs of insurance, fuel, and yearly maintenance of driving around a normal sedan all day long.*
Uber is between 30 to 50 percent above living wage for a single adult in Denver. It is on par with other courier part-time jobs if the driver owns their own car already, which is probably typical in a city like Denver.
It is worth noting that Uber has two distinct advantages over other jobs. One, drivers can work whenever they want, which is nice for entrepreneurs, students, and parents. Second, drivers can choose how many hours they work, potentially earning somewhere north of $60,000.
But, at bare minimum, it appears that Uber is a viable option for those in need of work.
*I calculated 40 hours a week, $1,177 for gas, $595 for maintenance, $4,116 for Toyota Prius payments, and $1,099 for insurance. If anyone has better information on estimates, please let me know.