It works because the drivers see the cash coming in, day in and day out, but may not feel the pain until their car starts needing serious repairs/they need a new ride.

By the time the average driver puts 2+2 together, it’s too late. They can leave, but some other naive hayseed is ready to jump in themselves.

I’ve only read the research brief, not the actual study, but this strikes me as seriously flawed. So far as I can tell, it is counting personal expenditures when calculating the Uber/Lyft income, but not when calculating the income from “jobs”. Many, if not most, sorts of standard paid employment require expenditures, most especially commuting costs and clothing costs. Moreover, standard employment involves higher opportunity costs than such things as Uber/Lyft, and it often induces extra expenditures like buying junk food, fast food, etc. This is especially true for employment near the minimum wage.

(Against Uber/Lyft, but hardly in support of the authors, I also see no mention in the brief of the self-employment tax, which will actually harm the drivers.)

Also, car insurance is generally all or nothing, so calculating how much driving is for “personal” reasons vs business reasons yields mindless math. I suspect most Uber/Lyft drivers insure their cars as “personal” vehicles, even if this is illegal. I doubt that many buy a car just to do this, although I suspect some “justify” the expense of a car via such driving.

Many, if not most, sorts of standard paid employment require expenditures, most especially commuting costs and clothing costs. Moreover, standard employment involves higher opportunity costs than such things as Uber/Lyft, and it often induces extra expenditures like buying junk food, fast food, etc.

Yes, it usually costs money to get to work both in transportation and suitable clothing for the workplace, but this tends to be factored into the pay for the job.

I and family members have at one time considered driving for Uber and Lyft, but long before this report came out I had questioned how this could possibly be profitable in our city considering that there was a requirement to use a fairly late model car, that commercial driver insurance is expensive, and that one would need sufficient income to cover costs like vehicle depreciation and running expenses, and health insurance, and that one would need to be able to itemize tax deductions and not be dependent on the standard deduction.

I came to the conclusion that if one could not average at least $20 per hour it was not even worth considering.

It might work well if you had the use of someone else’s car or if you were providing Uber services to others who had the same commute as you, but no vehicles of their own, but if that was the case, you could do it without Uber.

Anyway Uber is losing money hand over fist, and it is hard to see how that will change.