Drivers trying to make an extra buck using Uber and Lyft are having an increasingly harder time making ends meet. However, both companies are seeing their revenues skyrocket.
In a new report by the JPMorgan Chase Institute, the average monthly earnings of Uber and Lyft drivers went from approximately $1,469 in 2013 to just $783 in 2017. A chart included in the report showed average monthly earnings as high as $1,702 in October of 2013, to as low as $687 in December of 2017.
One caveat of the study that researchers acknowledged was that the report took monthly earnings into account, but not hourly earnings. Hourly earnings can greatly fluctuate, depending on how busy a certain driver is, or during certain times of the week or weekend when there are more likely to be Uber and Lyft users needing rides.
However, the report did conclude that their data suggests that opting to drive Uber and Lyft is increasingly less able to be a substitute for people who don’t want to work a full-time, 9-to-5 job. While the perception of Uber and Lyft drivers may be that it’s a “side hustle” to make extra cash, a Los Angeles Times story from earlier this year reported that most drivers in the city work full-time, and still have trouble paying for basic living expenses:
Around half of Uber and Lyft drivers surveyed said it’s their only job, and roughly the same percentage said they work more than 35 hours a week and struggle to pay for gas, insurance and car maintenance costs. Many said they drive extra hours, borrow money, or use a credit card to pay those expenses.
About two-thirds of respondents said driving for Uber or Lyft was their main source of income.
Conversely, both Uber and Lyft have seen significant growth in revenues year over year. While both companies have yet to turn a profit, both are trying to launch in Initial Public Offering (IPO) and become publicly traded companies on the stock market by 2019. Lyft’s annual revenues grew by $1 billion in 2017 compared to 2016, and provided more than 375 million rides last year (130 percent more in comparison to 2016).
In the meantime, Uber is still the dominant player in the ride-sharing industry, with a valuation of anywhere between $48 billion and $69 billion. Its annual revenue has gone from just $100 million in 2013 to $7.5 billion in 2017. By the end of the second quarter of 2018 (which ended in June), Uber reportedly had $7.3 billion in cash on hand, according to Business Insider. The company made $12 billion in gross bookings in the last quarter alone, which is a 41 percent increase compared to the second quarter of 2017.
Tom Cahill is a contributor for Grit Post who covers political and economic news. He lives in Bend, Oregon. Send him an email at tom DOT v DOT cahill AT gmail DOT com.