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A study conducted by the MIT Center for Energy and Environmental Policy Research analysed revenue and costs for over 1100 Lyft and Uber drivers, with the conclusion that most earn below minimum wage for their state and about 30% actually lose money when all the costs of owning and operating their vehicles are taken into account.
"A Median driver generates $0.59 per mile of driving, and incurs costs of $0.30 per mile", "On an hourly basis, the median profit was $3.37 per hour".
Because actual vehicle operating costs are significantly lower than the IRS allowance of $0.54/mile, many drivers report incomes that are substantially lower that their actual incomes, leading to a large pool of untaxed income (although it is small for each driver).
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MIT Study Shows How Much Driving for Uber or Lyft Sucks
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(Score: 2) by All Your Lawn Are Belong To Us on Monday March 05 2018, @03:50PM
Yes. People will. Because if they *think* they'll make money at it they'll try it. They'll learn differently and quit, but a whole new crop of people will be there the next day - people with either free time or people who are desperate.
When I worked as a cab driver in a very small (not urban) population, I just barely kept my head above water. I loved it - I'd do it for the rest of my life if it were profitable. But it wasn't. What is missing in the study above is how ride-hailing compares to conventional taxi services for sustainability.
Consider Multi-Level-Marketing. [wikipedia.org] 99% of people who join one will NOT make any money at it at all. Yet Amway still exists [cmu.edu], people still think they can make money at it, despite knowledge to the contrary [finance-guy.net].
Finally, bear in mind that just because it is overall unprofitable to participants does not mean there aren't drivers who do make money at it. Some will. Just like some people in the up-line really do make money with Amway. Just not enough, apparently, and one can question whether it is therefore societally worthwhile to allow the service to exist. (That's not a "no," just that the question should be asked.)
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