Dara Khosrowshahi: Uber CEO works on app for a day and accidentally reveals drivers barely make minimum wage

Uber CEO Dara Khosrowshahi, whose annual salary is more than $12 million, accidentally revealed on Twitter that Uber Eats drivers may barely make more than minimum wage in San Francisco, after tweeting about his experience and profits working on the app for a day.

“Spent a few hours delivering for @UberEats,” he wrote on Saturday. “SF is an absolutely beautiful town. Restaurant workers were incredibly nice, every time. It was busy!!

Twitter users asked him to share a detailed breakdown of his trips on the food delivery app, and he said he earned $106.71 over five-and-a-half hours, over just over $19. San Francisco’s minimum wage is $16.07.

Uber Eats drivers, part-time contractors who provide their own transportation, food, healthcare, etc, often take home less than that figure, sometimes less than minimum wage.

Uber did not immediately respond to a request for comment.

“If you try to earn money, just purely on the delivery fee, it comes out to about $5 an hour,” Peter Young, a rideshare driver who works for Uber Eats and other companies in Los Angeles, told The Guardian earlier this year. “A good day for me is maybe earning $100 before gas and expenses off eight hours of work,” adding, “I’m looking for other work. I can’t keep doing this at this pay.”

Last fall, major gig economy companies like Uber, Instacart, and Lyft approved Proposition 22, a California ballot initiative that exempts workers for these companies from a state law forcing companies to classify certain gig workers as employees and give them benefits. The companies outspent their opponents 10-to-1, shelling out more than $200 million in their campaign for Prop 22, making it the most expensive state ballot measure in California history.

As a concession to labour groups, the companies put in a provision that they would offer stipends to subsidise their workers’ private healthcare, but surveys suggest most drivers are ineligible for coverage.

“They know a lot of their drivers are already on Medicare and Medi-Cal,” Jerome Gage, a Southern California-based driver for Uber and Lyft and a worker organiser, told MarketWatch, referring to state and federal health programmes for low-income people. “If you have an employer-based healthcare plan, that also disqualifies you. They put all these barriers in place.”

The ballot measure was a response to AB 5, a law in California, a huge market where many gig economy companies are headquartered, forcing companies to classify gig workers as employees. Uber and others refused to comply with the law and threatened to shut down their California operations.

Mr Khosrowshahi’s post also highlights the strange economics of companies like Uber. Despite his fantastic compensation, and the company’s nearly $100 billion market capitalisation, Uber has never turned a profit, instead retaining its influence and ubiquity thanks to venture capital funding.