Uber drivers earn less than $8 per hour, says new report from gig worker advocacy group

Open this photo in gallery:

Uber Technologies Inc.’s UBER-N drivers in the Toronto area earn an average of $7.90 an hour, well below Ontario’s minimum wage of $15.50, after costs associated with using their personal cars for work are deducted from their pay, according to a new report by the advocacy group RideFairTO.

The report estimates that these costs – which include payments for things such as fuel, car insurance and maintenance – amount to at least $12 an hour for a typical driver. Excluding all the expenses, the average wage of an Uber driver in Toronto is about $20 an hour, according to the report. The figure does not account for tips.

The wages and employment status of gig workers in Canada, including Uber drivers, has become a hotly debated issue. That is particularly true in the country’s largest cities, which are increasingly dependent on this class of workers for ridesharing and delivery services.

There are about 250,000 people working as delivery couriers and passenger drivers across the country, according to the latest data from Statistics Canada. But they are not considered employees under labour laws, and as a result are not entitled to benefits that come with being an employee, such as a minimum wage, sick days and unemployment insurance.

The report, compiled for RideFairTO by Waterloo, Ont.-based independent researcher Tom Slee, relied on data from the City of Toronto, the Canada Revenue Agency and Uber itself.

“I had to piece it together from several sources, because it is notoriously difficult to know how much Uber actually pays its drivers according to jurisdiction,” Mr. Slee said. The tech giant releases little of that type of information, making the report one of the most comprehensive analyses of Uber driver wages in Canada.

In a statement to The Globe and Mail, Uber said the numbers in the report “do not align” with what its drivers are seeing. The company said that, in December, drivers in the Toronto area earned a median wage of $33.98 an hour for “engaged time” – that is, time they spent actually driving passengers around or making deliveries. That figure does not include tips, the company said.

RideFairTO’s $20-an-hour figure includes both engaged time, for which Uber drivers are paid, and the unpaid time they spent waiting between rides and deliveries. Mr. Slee estimated, based on City of Toronto data, that only about 48 per cent of a driver’s time on the job is engaged time.

Uber does routinely release some payment information. In its financial reports, it discloses its global “take rate,” which is the percentage of each fare the company keeps for itself. But it does not break down that rate by city.

New data shows 41 per cent of Canadians plan to take up a side hustle amid inflation, cost of living pressures

In the third quarter of 2022, Uber’s take rate was 27.9 per cent, a five-percentage-point increase from the previous year. But various other factors, determined by an algorithm, affect what a driver will ultimately get paid, including the number of Uber drivers on the road at any given time, the number of customers requesting rides, and “boost” or “surge” rates paid by customers in the event of poor weather or unusual traffic conditions.

“Uber has become increasingly more opaque about how they compensate drivers, even to the drivers themselves,” Mr. Slee said.

The fact that digital platform workers are not paid for wait times between deliveries or rides has drawn the ire of labour advocates. They argue that these workers should be designated as employees, which would require app-makers to pay them a minimum wage for the entirety of time they spend logged on.

“It is only by having hundreds or thousands of drivers standing by – at no cost to the platforms – that Uber and Lyft have been able to deliver on the promise to customers of low wait times at low costs,” said J.J. Fueser, founder of the consulting company MetStrat, which works closely with RideFairTO.

Uber has said imposing a minimum wage for all hours spent driving, including waiting time, would complicate workers’ ability to be logged on to multiple other gig-work apps at the same time, such as Lyft and DoorDash. Having the flexibility to work at any time and on various different platforms is a key reason people sign up to be Uber drivers and delivery couriers, the company has said.

In April, the Ontario government passed legislation that forced ridesharing companies to pay their drivers and couriers a minimum wage, but only for engaged time.

An internal presentation by the province’s Ministry of Labour to Uber representatives and labour advocates from this past December, which was obtained by The Globe and Mail, showed that Ontario is considering forcing tech platforms to pay workers a minimum wage higher than the $15.50 standard, to account for wait times.

Uber itself is calling for an earning standard of 120 per cent of minimum wage for its drivers and delivery couriers, but only for engaged time.

Mr. Slee and other labour advocates say minimum wage for engaged time only, or even a modest above-minimum-wage standard for engaged time, would make no difference to the earnings of gig workers, because they already make minimum wage, excluding costs.