Rideshare Drivers Could Make as Little as $4.82 Per Hour if Uber Gets Its Labor Law in Massachusetts, Study Finds

Uber, Lyft, DoorDash, and Instacart are looking to buy another law in Massachusetts by replicating Prop 22, the disastrous, virtually irrevocable California ballot measure that deprived their workers of employee status. Now, leading rideshare labor researchers from the UC Berkeley Labor Center have predicted how bad it could get—as little as $4.82/hour for Uber and Lyft drivers.

The findings from researchers Ken Jacobs and Michael Reich aim to disprove Uber and Lyft’s illusory claims that drivers would ultimately make more money than they would as employees. Like Prop 22, the measure writes in a pay floor of 120 percent of minimum wage, which would be $18/hour in Massachusetts. But, like Prop 22, the ballot measure excludes much of workers’ time on the clock; the companies would only cover the differential for “engaged time,” that is to say time spent traveling to, and shuttling, a passenger. By researchers’ estimates, that excludes about 33% of a driver’s actual hours spent waiting for rides and circling the block—a side effect of flooding the market with drivers in order to reduce wait times for riders.

“Minimum wage” is one of the many misleading promises Uber and Lyft and DoorDash have used to deprive workers of their rights. Gearing up for the 2022 Massachusetts vote, advocates are up against a $100 million propaganda sweep, and we can guess what this might look like based on the over-$200 million Prop 22 campaign. The companies deliberately sowed confusion about who the measure benefited and who was behind it, pummeling voters with flyers disguised as Bernie Sanders endorsements and Latinx voter guides, and forcing workers to disseminate their messaging. Some California voters told the Washington Post later that they’d been duped. A judge ruled it utterly deceptive and its enforcement unconstitutional. Uber CEO Dara Khosrowshahi fully intends to implement Prop 22-like measures in every state. They’ve already been running ads in Massachusetts for months.

The brief report is limited by Uber and Lyft, which hoard their data and have refused to share it with researchers other than those that they keep on their payroll. (Presumably, Uber and Lyft could share it if they wanted to definitively discredit opponents.) In the absence of that, researchers were able to calculate the $4.82 estimate based on anticipated driver expenses, the measure’s limited benefits offerings, previous driver surveys, and the ballot measure’s loopholes.

On top of excluding waiting hours, the companies also promise reimbursements for expenses, but a portion far less than workers would receive as employees. They offer a low health care stipend, but only to people who work a minimum number of “engaged” hours, which, researchers find, would exclude most drivers. Then, the independent contractor status bars drivers from receiving unemployment insurance, workers’ comp, or medical leave. Factor in the payroll tax that “self-employed” drivers have to cover themselves, and the take-home pay dips well below $18.

Lyft declined to comment directly on the study or to provide data contradicting it. A spokesperson directed Gizmodo to the Massachusetts Coalition for Independent Work, a 501(c)(4) backed by gig companies.

The group shared a release titled “Drivers React to Special Interest Propaganda Push on Ballot Question,” labeling the UC Berkeley Labor Center a “union-affiliated Berkley, California think tank.” (Nowhere does the release disclose that the coalition is not a grassroots labor organization or that it’s backed by rideshare companies.) The release quotes a person identified as a driver calling the study “misleading propaganda” and accuses Reich of publishing the study in an effort to promote union membership.

The rest is light on details, saying that the ballot measure guarantees 120% of minimum wage and that, factoring in tips, drivers receive “a higher earnings floor than offered in countless other industries.”

Uber did not respond to our request for comment.

Testimonies from app-based workers don’t reflect the lifestyles of people making a lot of money with flexible hours. New York City delivery workers for UberEats, Lyft, and DoorDash have reported that they often work six or seven days a week, and in a survey of 500 workers, half said they couldn’t pay rent. Before New York City passed a wage floor for drivers, Reich and James Parrott found that 60 percent of drivers worked full-time, 80 percent had bought a car to drive for work, and one-fifth were on food stamps.

It’s worth mentioning that some studies have severely underestimated drivers’ earnings, and researchers have to rely on data from the companies themselves. That’s not a reason to dismiss these studies (and notably, Reich and Parrott have been proven right). We have plenty of reason to flat out reject app-based companies’ numbers.

Here’s an example: last year, dueling studies on Seattle rideshare drivers’ wages came out around the same time, one from Cornell that was commissioned by Uber and Lyft, the other, by Reich and Parrott, commissioned by the city of Seattle. The former found that drivers made $23.25/hour, while the other landed on $9.73. 

Cornell researchers drew from the companies’ data, measuring only one week in October 2019. They used the companies’ preferred methodology and admittedly based their figure on a set of assumptions about what drivers are doing during wait times (possibly their own thing) and why they drive (possibly a side-hustle). An absurd number of findings were followed with disclaimers about limited data, research, and time constraints.

Reich’s and Parrott’s independently conducted study considers far more details, with contributions from numerous city officials, additional researchers, and a review by the city of Seattle. It compared data from the Census Bureau, the Seattle Department of Transportation, their own survey of 6,500 drivers, and limited available data from Uber. They gathered more data on what portion of drivers actually worked full-time. They similarly found that gross hourly pay amounted to $21.53 but deducted expenses and factored in wait times.

App-based companies fudge the numbers all the time. In a recent post, I cited an app-based delivery workers’ study finding that New York delivery workers made $7.87/hour before tips when factoring in wait time. DoorDash told me that their workers made on average $25/hour and ignored the question of how it calculated hours.

Tellingly, the companies didn’t prove Reich and Jacobs wrong after they published a similar study on Prop 22 in 2019, which the Massachusetts Coalition for Independent Work calls “debunked.” In rejecting the findings, though, Uber didn’t invalidate them—it only says that it chooses to look at different sources of data and definitions of work hours. “A cashier cannot, for instance, show up to work whenever or wherever they want,” Uber economist Alison Stein wrote in a blog post. “They cannot choose to ignore certain customers, or to take an unscheduled break.” Uber doesn’t actually measure what on-app time is spent as a “break,” and refuses to do so, Stein said, because monitoring drivers would limit their “freedom from control.” (If drivers were employees, Uber would still be required under federal labor law to pay for time it designates as “breaks.”)

The $4.82 figure is a hypothetical low estimate, but what’s certain is that the ballot measure doesn’t guarantee minimum wage in the sense that wage is payment for work. What it does ensure is that drivers, excluded from employee rights, won’t be able to bargain for more.

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