According to a recent study commissioned by the City of Chicago and conducted by Crowe LLP, a public accounting firm, drivers for Uber and Lyft earned more than $18 per hour, after accounting for expenses such as gas or vehicle depreciation. The Public Passenger Vehicle Study examined data from 2017 to 2022 and was managed by the Department of Business Affairs and Consumer Protection. The findings emphasize the significant role of the rideshare industry in the local economy, offering flexible earning opportunities for drivers while providing convenient transportation for passengers.
The study highlights the wide range of earnings among different drivers and conditions. Specifically, the PPV Study not only reveals that rideshare drivers in Chicago earn an average of more than $1,000 per week, but it also proves that 90% of Uber and Lyft drivers make over $18.90 per hour after expenses are deducted. Additionally, 25% of full-time rideshare drivers earn more than $28.9 per hour. The report also determined that over the study period, which dates back to 2017, no full-time Uber or Lyft drivers earned less than $21 an hour.
Despite these positive findings, the Chicago Gig Alliance has introduced the Chicago Rideshare Living Wage and Safety Ordinance, which purportedly seeks to increase driver pay. The ordinance would set a minimum wage for Uber, Lyft, and other rideshare companies' drivers. Proponents of the bill claim this is necessary to ensure drivers earn a living wage.
Upon review, the regulations proposed in this ordinance are unnecessary and could actually hurt drivers. By creating a minimum wage, City Council would actually be disincentivizing companies from paying the higher wages drivers currently earn. Moreover, the draft legislation caps surge pricing and limits how much the companies themselves can earn. Taken together, the bill makes it harder for drivers to earn high paying trips while reducing the amount of money the company can make. Combined, Uber and Lyft, which have had difficulty earning a profit in recent years, would likely have no choice but to reduce driver earnings.
Put simply, capping surge and defining pay at a threshold below what rideshare drivers currently earn would only hurt drivers. The City Council should embrace companies that choose to pay above the minimum wage.