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Comment by elgenie | Hacker News Reader

You could also read the methodology in the study when it comes out, since describing that is required in science, as opposed to questioning hypothetical methodologies that could be used. From the brief version of the study (http://ceepr.mit.edu/files/papers/2018-005-Brief.pdf), it appears they're using per-mile costs and ascribing only the incremental costs on a per-mile basis.

> Of the five sources of cost estimated per mile (Insurance, Maintenance, Repairs, Fuel and Depreciation), approximately 40% of costs are attributable to Insurance, Maintenance and Repairs, 40% to fuel expenses, and 20% to depreciation.

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You are correct that I used a hypothetical methodology.

That's because -- and this is the real problem -- finding the flaw in a specific methodology is a lot of work. It's often not just one thing that throws the numbers off by 200%, it's one thing that throws them off by 12%, then another by 7%, and twenty other little things that add and multiply up to an inaccurate overall conclusion. It can take multiple hours to figure out what actually happened and people don't have that kind of time, so the majority of people only have time to read the conclusion and who sponsored it.

In theory the solution to the problem of everyone having to personally evaluate every study is for a trustworthy reporter to do it for you, but that hasn't worked ever since reporters figured out that "Uber eats souls" gets more clicks than "wage study methodology miscalculates wages."

But if you want a real flaw in this study, how about this one -- most other jobs don't let you count transportation expenses against the hourly wage. Obviously an Uber driver's transportation expenses will be higher, but that doesn't mean you can discount them in the other cases when you count them in this case.

If someone has a 30 mile commute (because living closer to work is even more expensive) at $0.53/mile, that's 60 miles a day, so $31.80 in daily incremental expenses to take the job. 8 hours at federal minimum wage ($7.25/hr) is $58, so after transportation expenses their hourly wage is $3.28/hour. For someone with a 50 mile commute it's $0.63/hour. Suddenly Uber doesn't look so bad.

> most other jobs don't let you count transportation expenses against the hourly wage

Good job in pointing out this huge flaw in this study. Every minimum wage job I ever worked required me to have a vehicle to get to and from that job. That means that every minimum wage job out there where you need to pay for transportation to get to it is paying below minimum wage as the end the day. Those who live in cities have the benefit of public transportation but also have the time cost of being slower and reduces the number of waking hours they can earn money. What's the hours lost commuting averaged across and subtracted against the number of worked?

So everyone here is agreeing that things are pretty fucked for people relying on minimum wage jobs, putting aside whether Uber/Lyft pay below or above minimum.

Do other transportation jobs count transportation expenses against the wage? If not, then that is an excellent point. I would assume taxiing, food delivery, etc. would count them.

When I delivered pizzas (2006; Pizza Hut; Alabama) there was a small additional consideration for gas and wear and tear on my vehicle. As I recall it was around 1/6th to 1/10th of the the ~$6 an hour wage I was otherwise making.

Probably a bad assumption. The guy delivering pizzas in his own car for minimum wage is basically an Uber driver that happens to do a lot of business with a pizza place.

Does their methodology ascribe only the incremental aspect of each of these costs?

If I own a car already for my own personal use. I'm going to deal with all of these costs. You're already going to have insurance, maintenance and repairs, they'll just be more frequent. Fuel expenses is the only input that can be accurately estimated and attributed to ridesharing work performed. Even this contains a huge variable. Did they account for drivers using hybrid vehicles, which more and more ridesharing drivers opt for because it's significantly more profitable? Is the median TNC driver using a more fuel efficient vehicle than the one they accounted for in their calculations?

The fact that the study doesn't have an entire section that I found entirely devoted to potential problems with their methodology that we are pointing out here is reason enough to discount it as tainted after also considering its funders.

The study's not published and expecting the two page preview of the working paper to have a 'discussion of potential problems with methodology' section is utterly unrealistic.

They're clearly trying to gauge incremental costs, not fixed costs, and each of insurance/maintenance/repairs/fuel/depreciation are incremental. The breakdown between the personal and ride-hail vehicle use is part of the study and appears in the sentence previous to the quoted one as "the vast majority of drivers report that the bulk of the miles they drive are for ride-hailing".

> The study's not published and expecting the two page preview of the working paper to have a 'discussion of potential problems with methodology' section is utterly unrealistic.

In that case, it's grossly irresponsible to publish what little they have. Society is still struggling to correct the "statistic" that a woman earns 70 cents for every dollar a man earns. This new statistic about how much TNC drivers make is going to be accepted as fact from here on out, when it's grossly misleading.

> "the vast majority of drivers report that the bulk of the miles they drive are for ride-hailing"

That doesn't change the fact that the vast majority of the drivers would already have that car as a sunk cost whether they drove the vast majority of those miles for ridesharing or not.

That's a misunderstanding of what a sunk cost is. Which of the following are sunk costs?

A car has a resale value. That resale value decreases with each additional mile on the odometer. That's the depreciation incremental cost.

A car requires insurance. Insurance rates fluctuate based on miles driven per period (and also based on whether the car is used in ride-sharing).

A car requires maintenance and repairs are incurred on a per mile basis. For example, when a $30 oil change is needed every 3K miles with 300 miles of trips to the grocery store and 2700 miles of Ubering, it'd be asinine to assign that cost in a way other than $27 of that going to Ubering.

A car requires fuel. The same logic as the oil change; $30 for gas to drive 30 miles to the grocery store and 270 for Uber can be uniformly distributed per-mile.

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