Mr. Uber Driver Makes How Much More Than Ms. Uber Driver?!

A Look at Income Disparities in the Rideshare Industry

Ms Uber Driver | Income Disparities in the Rideshare Industry

Advertisements and testimonials abound about how much (and also, how little) rideshare drivers can expect to make working for companies like Uber, Lyft, and others. But rideshare companies don’t always offer detailed information about what specific types of drivers in specific places actually earn and, more importantly, how different drivers might earn quite different incomes, even in the same city.

What Do Rideshare Drivers Actually Make?

“I’ve always had a problem with the earnings figures that on-demand companies advertise to prospective drivers,” Harry Campbell wrote on The Rideshare Guy.  “Many drivers end up earning much less than advertised.”

Recently, Campbell conducted a survey of 1,150 rideshare drivers and he compiled a detailed account of how much drivers actually make. Not only do drivers not always make as much as rideshare companies advertise, the discrepancies fall along demographic lines, with women drivers, drivers over 61 years of age, and Black/African American drivers earning the least per hour and young, white male drivers earning the most.

Uber advertises that drivers earn an average of $19 per hour in all markets. The average per-hour salary survey respondents reported earning driving for all rideshares was $15.68. However, when  Campbell looked at earnings by gender and race, he found some important disparities: Women reported earning an average of $14.26 per hour while men reported earning $16.61, and drivers over 61 reported earning nearly $3 less per hour than drivers in the 18-30 age range. Black/African-American drivers for Uber and Lyft reported earning $13.96 per hour to the average $16.08 per hour for all Uber and Lyft drivers.

Why Income Disparities Exist in the Rideshare Industry

The time of day drivers are on the road could account for some of the income disparities his survey found, Campbell notes. Though the survey Campbell conducted didn’t control for time of day, he said it could explain the gender difference as women often stick to daytime hours.

Might rider discrimination be contributing to the income disparities Rideshare Guy survey respondents reported? “It’s actually very difficult to determine racism against drivers without cooperation from Uber, Lyft, and others,” Campbell told us, adding that his experience tells him the income discrepancies might be the fault of Uber (and other rideshare companies) themselves. “We found that, in regards to Uber’s new flat fare pricing promotion for passengers, Uber’s surge or incentive maps line up pretty clearly with racial demographic lines in L.A.,” Campbell told us. He pointed to two maps of L.A.: One, reported by the Huffington Post, shows the racial breakdown of L.A. county. The other shows Uber incentives by region in the city. When looked at together, explains Campbell, the shaded “boost zones” offer a clear picture of drivers being incentivized to focus on predominantly “white” neighborhoods. Drivers who live and choose to work in the less profitable (and more diverse) zones will almost certainly earn less than those who live and work in the more profitable (and less diverse) zones.

Huffington Post RACIAL-DOT-MAP-900 | Income Disparities in the Rideshare Industry
Photo Credit: The Huffington Post
Uber Boost Map | Income Disparities in the Rideshare Industry
Photo Credit: The Rideshare Guy

Uber’s own policies don’t dispute rider racism: In fact, Campbell told us, Uber has stated that the reason they won’t implement an in-app tipping feature is because riders are racist. “In that case,” Campbell told us, “it makes sense that many drivers make the claim that the ratings system must also be racist, too,” which would affect drivers’ bottom line.

Safeguards to Combat Income Discrepancies Due to Discrimination — Are They Working?

With Uber, safeguards exist protecting passengers from driver discrimination: When drivers get a ride request through the app, explains Campbell, they can see the rider’s rating, the type of service they requested, and the pickup location, however they aren’t able to see the passenger’s name until they accept the request. Drivers can ignore requests before accepting them without being deactivated, but Uber keeps track of drivers who cancel requests after accepting (that is, after seeing the rider’s name). “Uber has a lot of incentives for driving a particular number of fares per day as well as other incentives particular to drivers’ cities, so it doesn’t make sense for drivers to consistently discriminate against passengers,” explains Campbell.

However, the same safeguards aren’t in place to protect drivers from rider discrimination. Passengers are able to see their Uber driver’s name and photo before the driver arrives and could decline rides with certain types of drivers quite easily. “There is not a lot Uber and Lyft seem to be doing to combat this but, again, it’s difficult to really assess how passengers may be discriminating against drivers without more information from Uber and Lyft.”

Both Uber and Lyft recently defended their use of photos and names citing safety concerns: Uber’s CEO, Travis Kalanick, said that names are the best way to ensure a smooth and safe pick-up process. And while that argument makes sense, because discrimination has been proven again and again, it would appear that Uber, Lyft, and other rideshare companies then need to do more to ensure neither drivers nor riders discriminate and that all rideshare drivers have the same income opportunities.

What Can Rideshare Drivers Do to Fight Income Discrepancies?

People interested in becoming rideshare drivers need to be strategic about when and where they drive, Campbell told us. “It’s important to pay attention to the hot times of day and the busy areas, because those are really going to be the only ways people are going to maximize their income.” Uber and Lyft, Campbell said, do help drivers identify busy areas, but more time on the road learning the city in which drivers work is the best way to maximize income.

“Overall, I don’t buy the argument that Uber is an app that merely connects drivers and riders, since they’re obviously doing a lot more than that,” Campbell told us. “Rideshare companies are manipulating demand, supply and pricing in a way that has the potential to unfairly discriminate against lots of people.  I don’t think it’s malicious and probably more the byproduct of ‘going where the growth is,’ but ignorance is not an excuse in my book.”