According to the company’s own data released in May 2014, more than half of the Uber drivers operating in New York City earn $90,000 a year; in San Francisco, drivers can earn up to $70,000. However, these figures have been subject to skepticism. In the first place, the figures only included drivers working 40 hours or more a week for Uber, which would not be representative of Uber drivers in general. Secondly, these figures excluded the costs incurred by the drivers in their work.
Uber drivers must cover their own costs, such as fuel, personal auto insurance (which can vary in cost according to the driver’s circumstances), parking costs, maintenance of the car including oil changes and washes, repairs to the vehicle, taxes and 80% of toll payments (Uber pays for the other 20%). Furthermore, the car itself must be owned or rented by the driver, and he or she must cover the costs. These additional costs can be substantial and significantly reduce the driver’s take-home pay.
For example, one driver in New Jersey driving for approximately 12 hours a day took a total in gross fares of $180. However, accounting for Uber’s 20% cut of his earnings in addition to tolls, auto insurance, financing his vehicle and self-employment taxes, he had actually earned only $54.50 a day, which amounts to $4.54 an hour. This is below the minimum wage in New Jersey. This driver’s experiences may be more representative than the figures quoted by the company.
Taking these factors into account, financial journalist Felix Salmon calculated that a driver working in San Francisco could earn $75,000 a year, but that driver would have to work for 58 hours a week to do so. While this is considerably more hours than the average Uber driver works in a week, this is an achievable goal and an achievable salary if the driver is not employed elsewhere.
While Uber’s figures may not be representative for its drivers as a whole, it is possible for Uber drivers to earn a strong income by driving for the company if they are willing to put in a significant number of hours per week. Uber’s business model allows drivers to work as many hours as they want in a week.
Additional factors may reduce the amount of money an Uber driver can make. Other drivers for Uber represent competition in two ways. Uber works on dynamic pricing, which means that the price is determined by a ratio of how many drivers are working and how many customers there are. If there are more drivers, the amount each individual driver can make is lower. There have also been instances of Uber drivers picking up customers that were not allocated for them and claiming the fares, undercutting the other drivers.