![]() In September of last year, London decided not to renew Uber's license to operate in the city, citing lacking corporate responsibility as one of the primary determinants. ![]() In any case, the research paints a dark picture of the revolutionary ridesharing industry however, it's far from the first time the ride-hailing apps have faced censure. In an interview with The Guardian, an Uber spokesperson stated that the paper is little more than sensationalism, calling the methodology and findings "deeply flawed." Yet, MIT isn't exactly known for being a sensationalist publication. So the drivers aren't the only ones paying the price. For each mile driven, drivers incur about $0.30 in costs however, they are able to claim a Standard Mileage Deduction of $0.54 per a mile on their taxes - a difference that amounts to billions of dollars in untaxed income. The researcher also found that, in the U.S., an overwhelming majority of profits made while driving for Uber and Lyft aren't taxed. Ultimately, 74 percent of drivers earn less than minimum wage and, once vehicle expenses are taken into account, 30 percent actually lose money every mile they drive. According to a study published by MIT, the median profit for drivers is an abysmal $3.37 an hour, and that's before taxes. In fact, you may actually be paying for the privilege of working at a ridesharing company. If you are driving for Uber or Lyft, you aren't going to make any money. In an emailed statement, Adrian Durbin, director of corporate and policy communications at Lyft, said Lyft believes that the study "continues to understate driver earnings." Yet, unless all employees are making at least minimum wage, the business model and financial practices should be revised in order to be sustainable for workers. The study highlights serious and untenable flaws in the gig economy model - a model that is fast creating a financial culture in which most people can't survive. The overall point of this article, however, remains unchanged. The original analysis concluded that 74 percent of workers earned less than minimum wage according to the updated methodology, between 54 and 41 percent make that, depending on which methodology Zoepf uses. Zoepf felt compelled to update his analysis after criticism from Uber's chief economist. UPDATE: Two days after the publication of this article, Stephen Zoepf, the MIT researcher behind the work, posted an update to his findings on Twitter. ![]()
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