It comes from the MIT paper "The Economics of Ride-Hailing", but the authors have since revised the numbers (still, only to $8.5-$10): https://twitter.com/StephenZoepf/status/970754550968676352
I think Uber and similar have a valuable role in matching a latent supply of labor, an unmet demand for transportation, and wasted resources in the form of cars sitting parked 95% of the time.
It’s not like we were going around paying people $20/hr to drive us home from the bar ten years ago and those jobs went away - that activity simply wasn’t happening (excluding some very rare areas where taxis exist). It would be nice if we could cause Uber drivers to get paid $20/hr with benefits now, but if we passed laws requiring that, the economic activity would probably just go away because most people wouldn’t be willing to pay high enough fares. The driver would be sitting at home on Friday night instead of getting paid to drive the drunk kids around.
Link to the PDF of the revision comment: http://ceepr.mit.edu/files/papers/2018-005%20Authors%20State...
> Using Method 1, and following Hall’s advice not to adjust income, Median profit rises to $8.55/hour from the $3.37 initially reported. For 54% of drivers, profit per hour is less than 2016 minimum wage in their state. 8% of drivers lose money.
> Using Method 2, median profit rises to $10/hour. For 41% of drivers, profit per hour is less than 2016 minimum wage in their state. 4% of drivers lose money.
I find it odd that the median is reported so prominently. I'd be far more interested in the mean (though I realize that could be misleading if not weighted by total hours and/or income).
It's also unclear if the minimum wage threshold was naive and equated dollars per hour in profit with the hourly wage number or accounted for things like employer-paid payroll taxes and mandatory insurance (e.g. unemployment, workers comp).