Most Uber, Lyft drivers paid under minimum wage

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Other studies and surveys have found higher hourly earnings for Uber drivers, in part because there are numerous ways to report income and to calculate costs and time and miles spent on the job.

Rideshare company Uber cited figures in 2014 that UberX drivers in New York City and San Francisco earned between $70,000 and $90,000 annually, provided they worked at least 40 hours a week.

MIT's findings concluded that 74 percent of drivers earned less than minimum wage in their state and 30 percent actually lost money when factoring in vehicle expenses. But, he said, even if MIT's methodology needs to be tweaked ― which is possible, since it's a working paper ― its fundamental finding is spot on: Drivers aren't making enough money.

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The research paper explains that vehicle costs included estimate insurance, gas, depreciation, and fuel expenses for operation.

Drivers earn a median of 59 cents per mile while incurring a median cost of 30 cents per mile, the report said, adding that for almost a third of drivers, the costs are ultimately higher than the revenue. The medium profit per hour before taxes came out to $3.37 per hour. Drivers are able to use the IRS standard mileage rate deduction to write off some of the costs of using a vehicle for business. In April of previous year, The Information reported Uber was only retaining about 4% of drivers annually.

Uber refuted the paper's findings in a statement it made to the Guardian.

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A spokesperson for Uber told The Guardian the study was "deeply flawed" and said they'd reached out to the authors.

"An ever-growing number of individuals around the country are using Lyft as a flexible way to earn income, and we will continue to engage with our driver community to help them succeed", Lyft spokeswoman Alexandra LaManna said.

"I'm re-running the analysis this weekend using Uber's more optimistic assumptions and should have new results and a public response acknowledging the discrepancy by Monday", he wrote. "Because of this deduction, most ride-hailing drivers are able to declare profits that are substantially lower", the paper stated. Most recently, the company announced the rollout of Uber Health, an app that allows patients and health care providers to bypass a profile requirement for secure rides to and from hospitals and medical centers.

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