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Uber drivers and other gig economy workers are earning half what they did five years ago
More people are working for ride-sharing and delivery companies but on average they’re making less.
Sep 24, 2018, 6:00am EDT
Geoffroy van der Hasselt / Getty
The gig isn’t as good as it used to be for people working through online transportation apps in the U.S.
On average, drivers who transport people (Uber or Lyft) or things (Uber Eats or Postmates) through an app made 53 percent less in 2017 than they did in 2013, according to a new study by the JPMorgan Chase Institute that looks at online gig economy payments into Chase checking accounts.
The average monthly payments to those who worked for a transportation app in a given month declined to $783 from $1,469. Meanwhile, people working for leasing apps — Airbnb, Turo, Parklee and other apps that let you rent assets like your home, car or parking space — saw their incomes from those platforms rise 69 percent to $1,736 on average.
This is happening as online gig work has become more popular, thanks in large part to the growth in the number transportation jobs.
The share of the working population that has participated in the online gig economy at any point in a year rose from less than 2 percent in 2013 to nearly 5 percent in 2018. That’s about the same share of people employed in the public administration sector.
About half, 2.4 percent, worked in transportation jobs this year, up from a tiny fraction of a percent in 2013.
There are a number of potential reasons why the average pay for gig economy drivers has gone down.
It could be any or all of the below, according to JPMorgan:
Drivers on average are working fewer hours. Demand hasn’t increased to meet the increased number of drivers.Trip prices have fallen. Platforms are paying drivers lower rates.
A spokesperson for Uber, which is the most prominent transportation platform included in the study, chalks it up to growth in drivers who choose to drive part-time.
“The study’s findings reinforce what we and many others have said for some time: That the growth in on-demand work is driven, in large part, by people who use platforms like Uber on the side,” the Uber spokesperson said. “Given the growing share of people who use platforms like Uber only occasionally, a more appropriate metric to focus on would be average hourly earnings, which have remained steady over time.”
Uber’s biggest competitor, Lyft, agrees with this sentiment. “The fact that this study did not examine hourly earnings, the metric that drivers care most about, has resulted in misleading headlines,” a Lyft spokesperson said in an email. “Many more drivers are choosing to earn with Lyft on a part-time basis, often fewer than ten hours per week, and they tell us they truly value the flexibility Lyft provides.”
In the U.S., more than 50 percent of drivers work less than 10 hours a week, according to Uber, whose previous research found that although trip prices have declined, the number of trips per hour has increased, offsetting changes in wages. Here’s a full response from Uber published today in a blog post.
The JPMorgan data does not observe wages and hours separately, just overall earnings in a given month.
The JPMorgan research is further evidence that online gig economy jobs supplement regular nine-to-five jobs rather than serve as full-time employment in their own right, as traditional employment alone is no longer enough to make ends meet for many Americans. Of those who worked for an online platform in any sector at any point in a given year, those wages represented no more than 20 percent of their total observed income on average, according to the JPMorgan study. Most accounts that generated revenue had earnings in three or fewer months of the year.
The gig economy is notoriously difficult to measure, including anywhere from 5 percent to 40 percent of the population, depending on the parameters. This JPMorgan study focuses on jobs that are mediated through online platforms — what many of us think of when we think of the gig economy — while other studies often include freelance and contract work arranged by traditional methods. Its findings are also more reliable than that of other studies such as those from the Bureau of Labor Statistics, since it measures objective data rather than subjective survey responses.
For this data, JPMorgan looked at 39 million Chase checking accounts between 2012 and 2018. When it first began this study, 42 platforms were included; now there are 128.
The data, though, could be higher than the national average because Chase account holders skew younger and are more likely to live in the West than the population at large. The data could also be lower than it should be since it’s only including 128 online platforms — there may be more — and only observes payments that go into checking accounts, not into, say, PayPal.
This post has been updated to include commentary from Lyft.
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