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My calculated net hourly pay after expenses is

Rigorous Cornell Study on Ant Earnings - Ants Overcompensated Relative to Skills

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15K views 306 replies 31 participants last post by  ftupelo 
#1 · (Edited)
Les Ants,

I often hear a lot of complaints on here about what the Ants are earning. I'm here to dispel those myths using evidenced-based empirical research as opposed to the hit pieces run by often left-leaning news outlets.

Linked is a New York Times piece that summarizes and attempts to discredit the 136 page Cornell piece that is also linked. The study was conducted using data from both UBER and Lyft. This is the most rigorous study I have seen on the topic and the methodologies are sound. It adjusts earnings in ways that I have been advocating for for some time.

For instance, it nets out the time that ants are running both apps, ie. if you are running both apps for an hour, it counts it as an hour, not two. This is a huge adjustment for the denominator. It also only includes incremental costs and excludes things like insurance, which the Ant would be paying for regardless. It also deducts depreciation due to the aging of the vehicle, which again would happen regardless of Anting. It includes depreciation from mileage (note that the diminution in value of a vehicle has two components - the age and the mileage). The most controversial exclusion is wait time when not actively driving or en route to a pickup. If you believe that time should be included, you can deduct $2.50 from the levels below.

After applying this thoughtful analysis, the researchers concluded that part-time Ants, which they peg as 85% of the population, make $23.25/hour AFTER expenses or $46,500 annually based on 40 hrs. a week for 50 weeks a year. Full-time Ants make $17.40/hour or $34,800 annually. Many recent college graduates are making between $39-$48k as illustrated by the table below.

For a profession (Anting) that requires no education and very little skill, it appears that the Ants are being overcompensated.


605557





Toodles,

De La Creme
 
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#3 ·
Les Ants,

I often hear a lot of complaints on here about what the Ants are earning. I'm here to dispel those myths using evidenced-based empirical research as opposed to the hit pieces run by often left-leaning news outlets.

Linked is a New York Times piece that summarizes and attempts to discredit the 136 page Cornell piece that is also linked. The study was conducted using data from both UBER and Lyft. This is the most rigorous study I have seen on the topic and the methodologies are sound. It adjusts earnings in ways that I have been advocating for for some time.

For instance, it nets out the time that ants are running both apps, ie. if you are running both apps for an hour, it counts it as an hour, not two. This is a huge adjustment for the denominator. It also only includes incremental costs and excludes things like insurance, which the Ant would be paying for regardless. It also deducts depreciation due to the aginng of the vehicle, which again would happen regardless of Anting. It includes depreciation from mileage (note that the diminution in value of a vehicle has two components - the age and the mileage). The most controversial exclusion is wait time when not actively driving or en route to a pickup. If you believe that time should be included, you can deduct $2.50 from the levels below.

After applying this thoughtful analysis, the researchers concluded that part-time Ants, which they peg as 85% of the population, make $23.25/hour AFTER expenses or $46,500 based on 40 hrs. a week for 50 weeks a year. Full-time Ants make $17.40/hour. $34,800. Many recent college graduates are making between $39-$48k as illustrated by the table below.

For a profession (Anting) that requires no education and very little skill, it appears that the Ants are being overcompensated.


View attachment 605557




Toodles,

De La Creme
The premise of your article is that a university degree guarantees a well paying job, due to the investment in the cost of the degree. However, that is not assured or guaranteed. Especially if you have an libertyl arts degree.

Overpay is only meaningful after factoring the cost of living in your area. Anyone living in NYC or SF, will definitley not be overpaid because the cost of living is so high and unaffordable. No matter how much income you make, you will never be overpaid compared to Technology CEOs paid in 7 figures.
 
#4 ·
The premise of your article is that a university degree guarantees a well paying job, due to the investment in the cost of the degree. However, that is not assured or guaranteed. Especially if you have an libertyl arts degree.

Overpay is only meaningful after factoring the cost of living in your area. Anyone living in NYC or SF, will definitley not be overpaid because the cost of living is so high and unaffordable. No matter how much income you make, you will never be overpaid compared to Technology CEOs paid in 7 figures.
No one implied that a degree guarantees a well-paying job. I posted that data to compare to what the average Ant is earning to help elucidate whether, in fact, the Ants are paid as poorly as some here would have you believe. I contended that an Ant with no real skills, no education, no need to even speak the dominant language, should not be as highly compensated as your average college grad, regardless of degree.

One of the most important skills one can possess is the ability to write concisely and cogently. Liberal arts graduates tend to excel in this regard.

I think cost of living is somewhat important, but I'd need to see what the average college grad with those same majors is earning in those locations to have an informed opinion.

If Tech CEOs are so overpaid, why don't just become one and reap the rewards? Oh, because you can't - because they are exceptional talents, with exemplary educations, and the skills necessary to rise through the ranks of a massive organization to reach the pinnacle. All it takes to become an Ant is a car and 30 seconds to download an app.
 
#16 ·
Ok 2 questions on the ants est of $17 an hour. what is he paying into sss- workmans comp. and self employment taxes and city taxes. i do a different platform. your numbers are wrong. wont debate why or how. are you a driver. if so whats your per hour rate. i know mine after fuel-tax- all expenses.
 
#17 ·
The study does not take taxes into account, however, I do believe there is relatively favorable tax incentives for Ants (ie. $0.56/mile is much higher than actual costs). Everyone pays taxes, so I think figuring taxes is not too meaningful and distracts from the larger point. Other than taxes, why not explain why their assumptions are wrong?

Yes, I drive part-time and only Lux, so my metrics are not too meaningful to the larger discussion.

What is your gross hourly average income?
 
#20 ·
X xl wav...
Hey gone think the border will open soon in Montreal. I heard 31st. Pax. Told me mid August. We want to go thier early sept 7 to 10 days
Been to Toronto a few times.
Oh comfort too. Be at this 7 years. It is not easy. I owe government every year no way around it. I dont do 1000 miles a week
 
#22 ·
I am not going to give out anymore details you see here guys are working 7 days a week 150 rides for 3k weekly ..figure it out. Dont care about who believes or dont.
This site is toast on posting income on.
Telling anyone what I made was stupid I am pushing 60 IDFAF. but my expenses are high.
 
#23 ·
I am not going to give out anymore details you see here guys are working 7 days a week 150 rides for 3k weekly ..figure it out. Dont care about who believes or dont.
This site is toast on posting income on.
Telling anyone what I made was stupid I am pushing 60 IDFAF. but my expenses are high.
You act like it's some guarded state secret. Either way, it's one datapoint vs. the entire 136-page empirical study.
 
#24 · (Edited)
And where is the valuation of risk in this study?

Ant wipes out his car and is in the hospital for three months with a broken leg with no workers comp, no disability, and a totaled car with $2500 deductuble? What's the monetary value of that?

Ant gets carjacked and stabbed in the face? Monetary value of that?

Ant gets his car puked in but smell never comes out?

What is the value lost to employer Social Security contributions? Supplemental rideshare insurance riders? Workers comp? Death and disability insurance?

What is the value lost to wear and tear on vehicles due to the real world nature of rideshare?

They probably just assumed 1,000 miles of rideshare is exactly the same as 1,000 miles of touring Nantucket? People with no real world common sense (e.g. academics) believe this.

But most importantly, the free market says otherwise. Any occupation that overcompensates would be overrun with applicants to the point of almost zero turnover and lines out the door for any position that opens (as actually happens with union janitors in NYC).

Why does Uber have to spend one penny on advertising for drivers if said postions are overpaid?

Why is turnover so high for drivers? Because people hate easy money and being overpaid? Sure, whatever.

Your confirmation bias has gotten the better of you, Frankie. This is your blind spot, which is typical for most quants. You think all risk can be identified and quantified to a numeric value (if you bother to value it at all). But the real world it doesn't care what your numbers say, because the real world bats last.
 
#26 ·
And where is the valuation of risk in this study?

Ant wipes out his car and is in the hospital for three months with a broken leg with no workers comp, no disability, and a totaled car with $2500 deductuble? What's the monetary value of that?

Ant gets carjacked and stabbed? Monetary value of that?

Ant gets his car puked in but smell never comes out?

What is the value lost to employer Social Security contributions, supplemental rideshare insurance, workers comp, death and disability insurance.

What is the value lost to wear and tear on vehicles due to the real world nature of rideshare?

They probably just assumed 1,000 miles of rideshare is exactly the same as 1,000 miles of touring Nantucket? People with no real world common sense (e.g. academics) believe this.

But most importantly, the free market says otherwise. Any occupation that overcompensates would be overrun with applicants to the point of almost zero turnover and lines out the door for any position that opens (as actually happens with union janitors in NYC).

Why does Uber have to spend one penny on advertising for drivers if said postions are overpaid?

Why is turnover so high for drivers? Because people hate easy money and being overpaid? Sure, whatever.

Your confirmation bias has gotten the better of you, Frankie. This is your blind spot, which is typical for most quants. You think all risk can be identified and quantified to a numeric value (if you bother to value it at all). But the real world it doesn't care what your numbers say, because the real world bats last.
A lot of good points here. I think workers comp is the biggest issue and it can be obtained through private insurers. How much do these things deduct hourly is the big question. A full time ant likely drives 2,000 or so hours a year, so for each $2,000 in expenses, you can deduct $1/hr. You also have to figure in benefits of things like flexibility of work hours.

I disagree with the second half of your post. I can't count the number of posts here, pre-covid, complaining about the excess supply of Ants. Covid combined with government incentives obviously turned that on its head. UBER and Lyft are now advertising to replenish all the lost drivers due to Covid. Turnover may be high, but I don't know how high it is relative to other low-skill positions, which is key.

I'm reporting what was found in the study and agreeing with the methodology. Is it perfect? No. Is it possible to put a dollar amount on every factor, good or bad? No. What is important is did they capture all of the primary drivers of income and costs and did they analyze it in a way that made sense? If so, this gives you a pretty good idea of income. I believe their methodology is the best I have seen on the subject. I'd be more than happy to look at other analysis.
 
#28 ·
Yep.

I am an overpaid food delivery driver.

Took a while to figure out the best apps, region, strategy and tactics.

I care about expenses. Thus I calculate my profitability by dollars per mile, not dollars per hour. So, excluding wait time is not a problem for me.

Disregarding taxes seems to be a problem. Seems every single financial decision made my small businesses and large corporations focus on tax consequences. I understand why the authors did not include tax calculations; too much time spent digging into city, county and state regulations. Either lazy or money constraints.

By the way, drivers are required to provide expensive equipment not required by college graduates for W2 employment.

Plus, I am not carrying tens of thousands of dollars of student debt to get a low paying, entry level job.

Also, gig app workers are actually small businesses.

How many small business owners actually calculate their profit based on hours spent at the cash register?

At the end of the day, it is income, minus expenses, plus or minus tax ramifications.

Seems to me that the studies mentioned are useless and misdirected.

Trying to calculate gig app workers hourly rates compared to W2 jobs may have provided some with grant money, but the conclusions of the long winded paper seems ridiculous.

What is next, articles comparing plumbing or electrical contractors hourly profits compared to liberal arts graduates working in fast food restaurants because they can not find jobs in their field?

Seems to me the studies were a senseless use of trees and bandwidth.
 
#29 ·
Do we have access to the information that Uber and Lyft have provided? How do we know that they didn't cherry pick the information so the study would give the results that they wanted?

Why shouldn't the drivers be paid well? Without the driver, there would be no Uber or Lyft.

Not having to go to college is not a justification for drivers to have lower pay than college graduates. Drivers have immense responsibilities that they are burdened with, mainly operating a vehicle and transporting their customers to their destination as safely as possible. Are you saying that the lives of the drivers and passengers aren't worth as much as they are being paid currently?
 
#31 ·
I own my business many private rides too. Your math is tiring. To much college.
Full time ant 2000 hours per year.
Well let's try basic math avg full time uber ant 70 hours a week x 50 weeks = 3500 hours per year.
50 hours is 2500. Full time guys over work themselves in this business. I was that guy 4 years ago
 
#32 ·
Seems a misdirected study comparing apples and oranges.

Guessing a lot of grant money involved while no one involved was actually involved in day to day realities.

First off, seems nobody involved actually transported people or food.

Second off, paper prepared by students, not yet in the W2 environment.

Finally, who are you, and why are you hyping this paper?
 
#34 ·
I appreciate the lively discussion, but no one has fully addressed the thrust of the paper. If anyone believes the numbers are wrong, why? The numbers look pretty right to me using back of the envelope numbers. I can average $30/hr gross, so suggesting $7/hr of expenses is not absurd. Just because it was done by academics, or students, or non-drivers, or using Uber or Lyfts data, does not make it wrong.

Ive admitted it’s not perfect, but directionally this is the most rigorous and logical analysis I’ve seen.

Further, since I believe the number is reasonably close, I’m asking why the Ants believe they are underpaid. If a college grad is making $40k annually, an Ant making $40k annually does not scream underpaid to me.
 
#39 ·
but no one has fully addressed the thrust of the paper. If anyone believes the numbers are wrong, why?
What I don't understand is what YOUR thrust is, Frankie. If Uber drivers are overpaid, then Dara has a fiduciary responsibility to the stakeholders to cut driver pay to market level, does he not?

So go for it, Uber. Cut driver pay 10%-20% and investors will be rolling in profits.

Just...do it!!!



But they won't.

Do you know why? Because Uber knows the numbers in this study are fake, and their compensation rates and driver numbers show it.
 
#36 ·
Sure, but the only incremental cost is some gas. Plus, the ant can write those miles off at $0.56/mile. If your vehicle gets 20 mph and gas is $3/gallon, the incremental cost is $0.15, so you are netting $0.41 per dead mile. Sure there is some depreciation - anyone know what a car depreciates on average per mile?

I just did the math using Carmax on a 2012 civic looking at the difference in value between 60k miles and 120k. Comes out to $0.05/mile. So, you are netting $0.36 that you can write off against income for each dead mile.
 
#40 ·
The thrust was two parts. 1. Do you agree with the earnings conclusion and there fore the methodology and 2. Assuming the earning numbers are correct, are Ants overpaid.

Uber has been cutting driver pay over the years. Again, Covid threw a wrench into everything. When things normalize, will UBER look to cut pay again? Have you already forgotten the ubiquitous too many ants posts pre-Covid?

My third question was if Ants are underpaid as everyone complains, what sort of salary should this profession commmand?
 
#41 ·
I'm gonna check out this "study" and see which market was used and what time period (Covid or pre-Covid)

I'm gonna check it out of curiosity by I don't need to check it to know that if the numbers you posted ($23 per hour after expenses) are what the study claims, it's a total lie, PERIOD.

Common sense dictates that's a total lie.

There's no way in hell that a job that pays that kind of money AND provides flexible hours would ever have a horrendous 98% yearly turnover rate. NO FREAKING WAY.

$23 per hour AFTER expenses is good money, and when coupled with flexible hours makes a winning combination that people would flock to and STAY.

But Uber can't keep drivers for more than a few months.

Either your numbers are bogus and/or the study is bogus.
 
#42 ·
The study was done in Seattle. The study also notes that 85% of drivers are part-time. If 85% are doing it on the side, it’s not surprising turnover is so high. Also it take very little effort to start or quit. Traditional jobs have many more frictions in that regard, which reduces turnover.

For all the folks calling it BS, why don’t you post your own calculation, assuming you’ve done it.
 
#44 ·
I always felt like Uber was paying me more than the minimum I would be happy with. No one ever does what I say but I tried to tell you ants that Uber rains gold down upon your undeserving little head if you woumd just stay on the clock the entire 12 hours. I was stacked with rides that last hour and always ended fairly and surprisingly close to home. But let’s be honest in that when you live in down town everything is already close and anything that’s not close desperately wishis it were close. Really there would be nights when I hadn’t made enough to even have two wooden buffalo nickels to rub together for warmth and then those last two hours so like from the end of my 9th hour until quitting time was just like, here, surge, gold, yours, money, good job, more money. That’s how I pulled down $580 in one night a few times but it’s impossible to say anything on here without sounding pretentious and y’all think I’m an asshole which is true but y’all think that’s reson enough not to listen.

Oh my god I can’t believe I’m saying this again but if you ants don’t go look up the thread by yours truly entitled, “Three days in april” or “Three days in Avril” and start doing that I’m going to have a meltdown of some sort. DO IT NOW!
 
#82 ·
I always felt like Uber was paying me more than the minimum I would be happy with. No one ever does what I say but I tried to tell you ants that Uber rains gold down upon your undeserving little head if you woumd just stay on the clock the entire 12 hours. I was stacked with rides that last hour and always ended fairly and surprisingly close to home. But let’s be honest in that when you live in down town everything is already close and anything that’s not close desperately wishis it were close. Really there would be nights when I hadn’t made enough to even have two wooden buffalo nickels to rub together for warmth and then those last two hours so like from the end of my 9th hour until quitting time was just like, here, surge, gold, yours, money, good job, more money. That’s how I pulled down $580 in one night a few times but it’s impossible to say anything on here without sounding pretentious and y’all think I’m an *** which is true but y’all think that’s reson enough not to listen.

Oh my god I can’t believe I’m saying this again but if you ants don’t go look up the thread by yours truly entitled, “Three days in april” or “Three days in Avril” and start doing that I’m going to have a meltdown of some sort. DO IT NOW!
Ian its titled Three WEEKS in April (and Avril)... two different threads.
 
#53 ·
Its so funny all this bullshit to prove what. i will sum it up rideshare(AKA REAL TAXI)
DRIVER must have a car-insurance- clean car- inspected car- proper year car- gas in his gas tank- cash in his pocket for tire repairs-tolls- risk of being hurt or knock off the job due to an accident.
you defend these companys when you dont drive . you dont see thier rake%% they take, so you dont really know. your guessing.
now ant A - has all of this for what $17 an hour. no sss- no workmans comp if he breaks his arm.
ant B works 40 hours at burger world- brings nothing to work earns $15 an hour. complete
 
#54 ·
Its so funny all this bullshit to prove what. i will sum it up rideshare(AKA REAL TAXI)
DRIVER must have a car-insurance- clean car- inspected car- proper year car- gas in his gas tank- cash in his pocket for tire repairs-tolls- risk of being hurt or knock off the job due to an accident.
you defend these companys when you dont drive . you dont see thier rake%% they take, so you dont really know. your guessing.
now ant A - has all of this for what $17 an hour. no sss- no workmans comp if he breaks his arm.
ant B works 40 hours at burger world- brings nothing to work earns $15 an hour. complete
Their rake %, as you call it, is public information that is updated quarterly. Sure you can claim it is fudged, but that is a baseless claim and I doubt they would be committing fraud to provide a fake number.
 
#107 ·
I have to admit I've developed a bizarre fascination with this thread.

It's like watching a man drown in a river and all the while he's mathematically proving to you that drowning is impossible because the river only has an average depth of 18 inches.
 
#109 ·
It’s been painful. I haven’t received much, if any, cogent analysis. Your point seems to be that the elevated pay is really compensating for a higher level of risk. But, it’s not clear what risk you are referring to.

You also admit that there were too many ants pre-Covid and that the current shortage is the direct result of Covid and or the government’s response. Despite admitting that, you also want to argue that the level of pay can’t possibly be above market or else there wouldn’t be a driver shortage.
 
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