How much do ride-sharing drivers earn? Lyft has just released a paper that sheds light on this important policy question. The paper estimates “earnings after expenses” for drivers on the Lyft platform, based on reasonable and straightforward accounting for additional driver costs such as fuel, maintenance, cleaning, and depreciation.
The Lyft paper finds that the median earnings after expenses per “engaged hour” was $23.46 in the second half of 2023. (Lyft defines an “engaged hour” as time spent driving a passenger, or traveling to pick up a passenger). This figure is a useful “peek under the hood” for a major ridesharing company.
However, there’s another question that the Lyft paper does not address: How does $23.46 stack up against the pay for comparable occupations? To answer this question, PPI used data from the BLS Occupational Employment and Wage Statistics (OEWS), which surveys employers to ask about detailed wages being paid for different occupations.
We pulled several data points from the OEWS. In May 2022, the median hourly wage for taxi drivers was $14.75, including tips. The median hourly wage for “shuttle drivers and chauffeurs” was $15.71, and the median hourly wage for security guards was $16.71. And just to give a backdrop, the median hourly wage for all occupations was $22.26 (yes, that seems low, but that’s what the data shows).
Now, these wage numbers do not include employer-paid benefits, which come to an average of roughly 20% of total compensation for part-time workers (based on BLS data). So we adjust the wage figures upwards to account for benefits. Table 1 shows the comparison.
Table 1: Ridesharing earnings in perspective | |||
Median hourly wages (OEWS) | Adjusted for benefits (assuming part-time) | ||
All occupations | 22.26 | 27.83 | |
Security guards | 16.71 | 20.89 | |
Shuttle drivers and chauffeurs | 15.77 | 19.71 | |
Taxi drivers | 14.75 | 18.44 | |
Hourly earnings after expenses | |||
Drivers on Lyft platform | 23.46 |
So we see that hourly earnings after expenses for drivers on the Lyft platform is $23.46, 27% higher than a benefit-adjusted hourly wage of $18.44 for taxi drivers who are employees, and 19% higher than the benefit-adjusted hourly wage for shuttle drivers and chauffeurs.
On the other hand, driver earnings per hour are 16% lower than the benefit-adjusted median for all occupations, including high-skill white-collar occupations. That makes sense.
One final methodological note: The Lyft figures are based on the concept of “engaged time” — time spent driving a passenger, or traveling to pick up a passenger. It does not include time spent waiting for the Lyft app to identify the next passenger. On the other hand, if the wait time is too long at a particular time of day, drivers are likely to turn off the app and do something else instead, like study for classes, shop for groceries, or take care of children or the elderly.
Similarly, the BLS hourly wage figures do not include time spent commuting to work. If we accounted for commuting time, then wages per hour would be much lower historically, but they would have soared when Americans shifted to working from home, and fallen as they returned to the workplace. The implication here is that flexibility in work arrangements affects the meaning of wage data, whether we are talking about jobs or gig economy work.
From a policy perspective, the Lyft paper suggests that ridesharing drivers are doing reasonably well in terms of earnings compared to similar occupations. That allows us to concentrate on other aspects of work, such as making sure that regulations and the tax code are modified to give gig economy workers access to the safety net while protecting flexibility for workers including caregivers and workers with disabilities.
PPI Reports on the Gig Economy:
Regulatory Improvement for Independent Workers: A New Vision (July 2020)
Platform Work and the Care Economy (November 2022)
Disability and Changes in the Workplace (November 2023)