A familiar question is at the heart of a new fight before the Seattle City Council: Just how much are drivers for services like Uber and Lyft actually making? It's not an easy question to answer.
A city council committee approved a resolution last week indicating the council's plans to consider setting minimum Uber rates using city law. Council members say they want to address reports of low driver pay and level the playing field for traditional taxi drivers. “We’re trying to build an industry that is fair to all,” said Council President Bruce Harrell. The full council will vote on the resolution today. If it passes, the council will debate more specific legislation in coming months.
Drivers on both sides of the issue have shown up at council committee meetings in recent weeks, telling very different stories about how much they earn. Most of the discussion has focused on Uber, which has more drivers in Seattle than Lyft. It's a fight the council has heard before.
When Seattle City Council member Mike O’Brien introduced landmark legislation back in 2015 to allow Uber and Lyft drivers to unionize, the press conference included a driver who said he made less than $2.75 an hour after expenses. That driver, Takele Gobena, now works for Teamsters Local 117, the union trying to organize drivers. During a panel discussion earlier this year, Gobena said “You end up getting about two to four dollars. That is real.” And in federal court in February, the City of Seattle defended the unionization law by arguing drivers' low pay creates a safety hazard. Seattle City Attorney claimed Uber drivers make "starvation wages."
Other drivers tell a very different story. After O'Brien's unionization ordinance passed, Seattle set about making rules for the organizing process. During that time, Uber organized drivers to show up at public hearings. Those drivers described making $15, $20, and $25 an hour.
Now, the process is repeating itself. “If any driver here who only makes $3.87, please come see me and I will help you," one driver with a pro-Uber group told the rest of the audience in council chambers last week.
Beyond anecdotes, figuring out which is the more accurate picture of an Uber driver's life in Seattle is difficult. Uber is notoriously withholding when it comes to information about, well, just about anything. That leaves researchers and policy makers to depend on self-reporting by drivers and whatever limited information Uber decides to share.
"One of the biggest challenges we've had is getting good data to make decisions," Harrell said during a council briefing Monday. Along with signaling the council's intent to pass more regulations for ride share companies, his resolution would ask businesses like Uber and Lyft to hand over anonymous driver data to study.
Last fall, Uber published this blog post saying the median driver in Seattle makes between $19 and $21 an hour before expenses. The company says that rate is roughly the same no matter how many hours drivers work and that expenses range from $2.94 to $6.46 per hour. Uber said it used a four-week summer period to calculate those rates, but did not provide the raw data or number of drivers whose pay it analyzed.
Another 2017 report authored by two Uber economists and an NYU business professor said increasing rates for drivers does not actually increase their hourly pay in the long term. Instead, riders take fewer rides and the company offers less surge pricing. (When demand is high, Uber institutes "surge pricing," using higher pay to encourage drivers to work.)
Uber is currently subject to a federal order stemming from charges that it misled drivers with exaggerated claims about how much they could make on the platform. That order bars the company from “making false, misleading, or unsubstantiated representations about drivers’ income,” according to the Federal Trade Commission.
In recent weeks, a report from the Massachusetts Institute of Technology grabbed headlines after it found that Uber drivers made a median of $3.37 an hour. But after criticism from Uber, the author of the study acknowledged that respondents to his survey may have misinterpreted the questions, skewing the results. The author said revisiting the research could bump up actual pay to $8.55 or $10 an hour.
Uber and Lyft pay drivers based on the length of the ride and the time it takes. Uber currently charges $1.35 per mile in Seattle and 24 cents per minute and drivers keep 75 to 80 percent of the total fare, according to the company. According to the Teamsters, drivers keep $1.01 of the $1.35 per mile rate. The resolution says the council may set that rate at $2.40. Taxis charge $2.70 a mile.
Gobena, the former Uber driver who now works for Teamsters Local 117, says drivers made more money when Uber first came to town. Rates were higher and there were fewer drivers on the road. Uber now has about 15,000 drivers in the Seattle area, according to the company. Gobena says just 20 percent of Uber drivers provide 80 percent of trips in the Seattle area. (Uber says 20 percent of its drivers provide 50 percent of trips.) Full-time drivers “work over 14 hours a day," Gobena says. "For them, it’s becoming very, very hard. They are struggling to cover their costs."
Don Creery, a driver involved with the App-Based Drivers Association (created with help from the Teamsters), provided a copy of his 2017 tax return. Creery says he worked 40 to 50 hours a week over 3,687 trips in 2017. That’s about 71 rides per week. Creery says he had a net payout from Uber of $31,910. His tax return shows reported income after expenses of $18,755. At 40 hours a week, that works out to $15 an hour before expenses and $9 after. Seattle's minimum wage currently ranges between $11.50 to $15.45, depending on the size of employer and benefits.
“Uber is saying drivers are making this much money," Gobena says. "Actual drivers are saying we are making way less. So how do we find out? Uber provides us the data.”
The Seattle City Council is looking for something more comprehensive, too. The resolution requests the companies work with city staff to “develop a list of data that they will voluntarily share with the council through a secure mechanism” including hours drivers work, duration of trips, fares charged, and compensation to drivers. The data will be anonymous.
O'Brien had originally sought more specific data, but Uber and Lyft representatives said they were worried that would amount to proprietary information, so the council tweaked the language in the resolution to make it less specific.
Caleb Weaver, Uber’s Washington State public affairs manager, said the company may work will the University of Washington Transportation Data Collaborative to provide the information.
“I’m very hopeful there’s a way to aggregate and answer the council’s underlying question—Are drivers earning money?—without having to make available to our competitors a massive data set that reveals a lot of information about every single driver and every driver’s activity,” Weaver said. Lyft made similar claims and offered to share "aggregated" data, according to council staff.
If the companies don't provide the information by May 31, the council will consider legislation requiring the data, the resolution says.
The resolution says the council plans to consider a base fare as well as changes to licensing, fees, insurance requirements, and other regulations for app-based and taxi drivers in coming months. The full council is expected to vote on the resolution at its 2 pm meeting.
