The great French economist Frederic Bastiat is famous for having written a reduction ad absurdum of government regulation in which a candlemaker petitions the government to blot out the sun because it offers unfair competition.
Similarly, Uber, possibly the most popular innovation in transportation since cars eclipsed horse-drawn carriages, is drawing fire from a union-dominated caucus determined to blot out the light of innovation. Yet even for unions, this particular line of argument is daringly unsubstantiated.
Probably the only example unions can dredge up to substantiate their “woe is us” narrative on behalf of Uber drivers, who still sign up in droves despite the allegedly evil practices of the company, is 26-year-old Takele Gobena, a driver from Seattle, who makes the following shocking claim:
With Uber and Lyft, driving 37,000 miles in 2014, after all my expenses (vehicle financing, fueling, insuring and maintaining) I earn $2.64 an hour and have no health-care coverage if injured.
Pretty frightening stuff, right? Except for one problem: It’s an assertion given completely without evidence. Indeed, Facebook messages sent to Gobena asking for clarification on how he arrived at this number went without answer. This leaves the highly relevant question of how he actually did calculate this number. Because on the evidence, it appears to be either an unbelievable outlier, or completely made up.
Let’s start with numbers we do know. Even the most pessimistic estimate of what most Uber drivers in the highly expensive New York City market make, for instance, is $7.20/hour. According to the cost of living comparison website Numbeo, New York consumer prices are, on average, 13.71% higher than Seattle consumer prices, excluding rent. Since Gobena only mentioned non-rent expenses as factoring into his calculation, we can assume that this figure probably applies to what he spends. So if even New York Uber drivers are making $7.20/hour after expenses, it beggars belief that he can only make $2.64 absent factors that would make him an exception.
And an exception he must be. As Ian Adams, Senior Fellow at the R Street Institute, told this writer, “While Mr. Gobena’s situation is unfortunate, it is also the exception. Independent contractors across the nation drive for TNCs and enjoy both the flexibility and the compensation necessary to make it worth their while.”
“While the way in which Mr. Gobena arrives at his specific $3 per/hour figure is hard to understand,” Adams said, “like any contractor, his success is a combination of the rate he is willing to work for and the expenses that he is willing to incur. His choice of vehicle, financing, and insurance, to name a few variables, are all factors that contribute to his bottom line.”
At least one figure — the price of Gobena’s car — is available for comparison, as he claims to have invested $14,000 in it. This is near the cheapest car one can buy on the market — the cheapest being the $12,800 Nissan Versa. However, as the above quote shows, he also admits to using car payments (or “vehicle financing”) as a detriment when calculating his average hourly wage, while bizarrely not including taxes. Suffice to say that many Americans who make minimum wage jobs and have to make car payments in order to be able to commute would probably make substantially less than minimum wage if they used a similar calculation, particularly if their financing is subpar. Given that Gobena is an immigrant, it’s quite possible that he got sold a bill of goods by an unscrupulous car financier. Tragic, but by no means Uber’s fault.
What we don’t know, on the other hand, is near-never ending. We don’t know whether Gobena over-insured his car, for instance, or whether his car is in and out of the shop all the time, or what his rating is with Uber (he mentions getting complaints, so one presumes it’s not a perfect record), or how many rides he actually picks up during the hours he’s online, or over what period of time he calculated his figure. Did he simply use the least well-paying day he had, or did he average this “hourly rate” across a week? The questions are endless, and the lack of evidence to answer them is baffling.
Of course, unions will take any sucker they can get, and given that Gobena is willing to talk to a fringe leftist website like California’s Capital and Main blog, but ignores requests for comment from conservative journalists, he may be very well aware that his numbers can’t stand up to scrutiny. Bottom line: Unless you’re in the Seattle area and actually using a ride hailing service, you would be wise to avoid being taken for a ride by Gobena and his unions allies.