It all sounds really rich, coming from David Plouffe: Uber drivers earned more than $3.5 billion last year alone. The Uber strategic adviser and former campaign manager for Barack Obama calls Uber a "powerful economic engine."

Just three years ago, Uber told The Wall Street Journal that a typical Uber driver takes in more than $100,000 a year. That, too, sounds very good. But everyone could sort of read between the lines, even then: That $100,000 is in gross money coming in--total fares, a number very different from the driver's total earnings after paying for the massive expenses that come with driving a car: namely, gas and depreciation of a costly automobile.

A new analysis by BuzzFeed revealed a more likely result of the driver-expense equation. Drivers earned between $8.77 and $13.25 an hour after expenses, notes the site. (The analysis took into account Uber's own internal calculations, but ran them against data on driver trips in late 2015 in Denver, Detroit, and Houston.)

It's an interesting analysis, and I recommend you read the whole thing. But what's perhaps most troubling about the new lens on such data is that Uber doesn't publicly acknowledge that its drivers--independent contractors who are largely ineligible for the sorts of benefits available to full-time employees--are being squeezed. (Uber did not respond to a request for comment or additional data.)

"They know how many hours the app is on. They know what the miles are," Lawrence Mishel, president of the Economic Policy Institute, tells BuzzFeed. "They can readily determine whether workers are making the equivalent of minimum wage."

And BuzzFeed nails another big problem:

Perhaps more impactful than how Uber calculates actual earnings is how it advertises potential earnings. Uber uses a wide variety of channels--text message, radio, Craigslist, banner ads, TV ads, and even direct mail--to encourage people looking to earn money to drive for Uber.

But those potential earnings are advertised in "total fares," with no mention of commission or expenses, which some drivers feel is misleading. For example, in Denver, Craigslist ads from the time when the data was pulled said drivers can earn up to $688 a week in fares; in Houston, ads from September said $660 in fares. (These estimates exclude Uber's commission.)

None of these advertisements mention driver expenses. The same goes for the alerts Uber sends to drivers--sometimes five times a day or more--telling them that other drivers on the road were making $20 or $30 an hour in gross fares. Uber said this is because "there are significant differences in the cost of gas, new tires, an oil change or insurance depending on the city and the driver's individual circumstances/choices."

But many of the drivers and some of the former Uber employees interviewed for this article told BuzzFeed News the company could do a better job educating drivers about the difference between net and gross earnings.

"That's not net. That's just gross. And that's if you get lucky. That's the best, best, best-case scenario," said Houston driver John Cerasuolo. "It might as well say partners are earning $1 million an hour."

So after lots of advertising for drivers around the country and the world, there's no education on the reality of what the job really means--that is, nonbinding employment at an unimpressive wage.

Published on: Jun 23, 2016