Estaphanie St. Just, an Uber driver, rallies with other drivers for the ride-hailing giants Uber and Lyft at a park near Los Angeles International Airport in 2019 in Los Angeles.

Many Americans are driving for Uber and Lyft to boost their incomes.But no one can agree on how much the typical ride-hailing driver earns per hour.Varied pay calculations, car expenses, and customer tips can produce a wide range of outcomes.

While recent pay-transparency laws are shining a light on the compensation of some jobs, there’s one gig where the pay is still murky: ride-hailing drivers for companies such as Uber and Lyft.

Over the last few years, studies have come to a wide range of conclusions about drivers’ hourly pay, from as low as between about $9 and $12 an hour to as high as between about $23 and $28 an hour.

In a November earnings call, Uber said the typical US driver earned about $33 per engaged hour across the US, not accounting for driving expenses.

In February, Lyft said the typical US driver who used a personal vehicle earned about $31 per engaged hour — and $23 an hour after accounting for expenses like gas and maintenance. Lyft also announced that it would begin guaranteeing drivers 70% of their weekly rider payments after external fees, which include local taxes and government-mandated extra insurance. The company said it had taken steps to provide drivers with greater detail about how their pay is calculated.

Meanwhile, Business Insider has spoken with several drivers whose pay has varied considerably, per their calculations.

At least two factors could explain these pay discrepancies. First, researchers, drivers, and companies use different pay calculations — some don’t fully account for the expenses and hours that impact a driver’s profits. Second, drivers’ pay can fluctuate based on how often they drive, their vehicle’s expenses, and how well their customers tip.

Regardless of how drivers calculate their hourly earnings, the ones Business Insider spoke with agreed that developing a method to assess and track one’s pay is important. They said it’s the only way to know for sure that driving for Uber and Lyft is worth their time.

Drivers’ hourly pay depends on how you define their working hours

Jeff Hoenig is a part-time Uber driver in South Carolina who accepts nearly every ride that comes through.

Uber and Lyft’s hourly earnings estimates reflect drivers’ pay per engage — or utilized — hour, which is the period between a driver accepting a ride and completing a trip.

But engaged hours don’t account for the time drivers spend relocating to higher-demand areas, filling up their gas tanks, or scanning their apps for profitable trips. Some drivers told BI that they use their online work hours — the time they have the app open — to more accurately calculate their hourly pay.

For drivers who are selective with what rides they accept, such as Gabe Ets-Hokin, a part-time Uber and Lyft driver in Oakland, California, the difference between engaged and online-hour pay can be substantial. Over the past five years, he calculated that his pay per online hour was between about $15 and $20 less than his earnings per engaged hour.

But this isn’t the case for all drivers. Jeff Hoenig, a 63-year-old part-time Uber driver in South Carolina, told BI that since he accepts almost every ride, there is little difference between his online and engaged earnings.

Driving expenses such as gas and maintenance reduce drivers’ profits

Some ride-hailing drivers have transitioned to using electric vehicles to offset gas costs.

Five drivers previously told BI that their driving expenses — including gas and maintenance — amounted to between about $4 and $8 an hour.

Lyft calculated that its typical US driver has about $7 per engaged hour in fuel, maintenance and repairs, depreciation, and cleaning expenses. This didn’t exclude fixed expenses like car payments, vehicle registration, and car insurance.

These expenses vary depending on each driver’s vehicle. Some drivers use electric vehicles to reduce their gas and maintenance costs.

Wesley Johnson, a 64-year-old Uber driver who works roughly 40 hours a week in the San Francisco area, told BI last year that driving an electric vehicle saved him a lot of money in gas and maintenance costs.

Unpredictable customer tips can make up a big portion of drivers’ income

Aaron Lavender is a full-time driver for Uber and Lyft in Colorado.

A driver’s day-to-day income can also vary considerably depending on how lucky they get with tips.

“There have been days where I received zero tips, and there have been days where I receive a tip every single trip,” a Dallas Uber driver told BI last year. “It really depends on the mood of the city.”

Aaron Lavender, a 36-year-old full-time Uber and Lyft driver in Colorado, previously told BI that tips make up between 10% and 20% of his income.

Meanwhile, Nathaniel Hudson-Hartman, a Portland, Oregon-based full-time ride-hailing driver, said that if it weren’t for tips and ride bonuses, his earnings after expenses would have fallen from about $24 to about $13 an hour last summer.

Part-time drivers can sometimes see higher hourly pay

Ets-Hokin previously told BI that he’s made up $40 an hour in earnings as a driver after taking out expenses, per his calculations.

But he said he was only able to do this because he’s now a part-time driver — working between 15 and 20 hours a week. He said he drives only during busy hours and cherry-picks higher-paying rides. When he drove full-time in previous years, he said he earned between $25 and $35 an hour after expenses.

“I think making $30 to $50 an hour net is pretty sweet for a part-time job where I have no schedule and very little accountability to anyone but my passengers and my family,” he said. “I’ll do it as long as I can make $25 to $30 an hour.”

Minimum-wage laws could help clarify drivers’ pay

The uncertainty of drivers’ pay doesn’t seem to have stopped Americans from giving ride-hailing gigs a shot. Last November, Uber announced it had a record 6.5 million active drivers and couriers.

Some cities and states have passed legislation to guarantee minimum pay for ride-hailing drivers.

In February 2019, New York City established the nation’s first minimum pay rate for ride-hailing drivers of $17.22 per hour. Seattle, California, and New York State have enacted their own measures, and proposals are under consideration in Minneapolis, Chicago, and Massachusetts.

Are you a gig worker willing to share your story about pay, schedule, and tipping? If so, reach out to this reporter at jzinkula@insider.com.

This story was originally published in October 2023.

Read the original article on Business Insider

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