Taxi-hailing app Uber would only be able to maintain its low fares if it continues to pay its drivers poorly, says a study penned by economist Jim Stanford, The Guardian reported on Wednesday.
The study, which was based on fares in six urban cities, at least three in Australia, found that the drivers were left with a mere one-third of the fare once taxes, driver fees and vehicle costs were deducted. In addition to low income, the drivers are also not entitled to pensions or leaves.
Once a lucrative source of income, Uber has now become a liability for those driving for the company due to maintenance, tax and fuel costs that entail. The decrease in profits can also be attributed to the increase in the number of drivers working for Uber.
Drivers can earn extra during surge hours, however, it is difficult to predict when fares are at peak and therefore, cannot be relied upon.
“The company dresses this up as flexibility but the money is so bad and uncertain that it’s only in an environment that people are desperate that this model can work,” said Stanford. According to Stanford, however, Uber would not be able to sustain itself if raises the pay of its labour.
Due to the decrease in income, Uber drivers are now turning towards other earning opportunities that do not involve long hours of driving, the study additionally.