Drivers for ride-hailing companies Uber and Lyft get a median profit of $3.37 per hour - before taxes - a research study showed Friday.
A blistering study conducted by MIT researchers found that Uber and Lyft drivers are paid less than $4 per hour.
Indeed, Mr. Zeopf said he plans to crunch the numbers with a different formula as his findings are questioned by both San Francisco-based companies, the newspaper reported Friday.
'Drivers are essentially subsidizing it by working for very low wages, ' he added.
The study made headlines this week, revealing that the cost of insurance, fuel, and auto maintenance all played a major impact on why those who drive for ride-share companies do not meet minimum wage.
"While the paper is certainly attention grabbing, its methodology and findings are deeply flawed", a spokesperson said.
Median drivers for Uber and Lyft earn 59 cents for each mile they drive, the study found, but also lose 30 cents every mile. "This business model is not now sustainable", says Stephen Zoepf, co-author of report. "Because of this deduction, most ride-hailing drivers are able to declare profits that are substantially lower", the paper stated. Mark Tluszcz, co-founder and CEO of Mangrove Capital Partners, succinctly summed the problem in an interview with TechCrunch: "We're creating the next lost generation of people who simply don't have enough money to live, and those companies are fundamentally enabling it under the premise that they're offering a cheaper service to consumers".
It was only previous year that Uber introduced the option to tip drivers into its app for customers. They also said that detailed driver costs should be the subject of future study. "It's quite possible that drivers don't realize quite how much they are spending", Zoepf tells the Guardian. "We've reached out to the paper's authors to share our concerns and suggest ways we might work together to refine their approach", an Uber spokesperson wrote.
Last year, the company shut down its U.S. auto leasing business after discovering it was losing 18 times more money per vehicle than it had previously understood.