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. Second, 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.
What Uber Drivers May Really Make
According to a 2018 study by the Economic Policy Institute, when fees, vehicle maintenance costs and other expenses are factored in, Uber drivers earn approximately $11.77 an hour. If the cost of self-employment taxes and basic health insurance is deducted, their hourly rate drops to $9.21, which is below the minimum wage of the majority of Uber's main markets and less than what 90% of other wage earners are paid.
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.
Another Factor That Can Reduce Income
Other Uber drivers offer competition in two ways. Uber works on dynamic pricing, which means 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.
(For related reading, see "The Story of Uber.")