How much does an UberX driver make compared to a regular cabbie?
The Washington Post reports that while a yellow taxi driver might earn something close to $30,000 a year (well below the U.S. household income average), an UberX driver working a 40-hour week in New York City makes about $90,766 a year. (That, incidentally, is almost enough to buy this 1998 Lincoln limousine.) In San Francisco, a similar workload brings in about $74,191.
“New people are flocking to Uber in part due to the money that they can make and due to the flexibility you have, basically being able to decide when you want and where you want to work,” Rachel Holt, Uber’s regional general manager, told the Post.
Another aspect of all this has to do with the traditional taxi industry’s steep initial investment. The price of a medallion in New York City–the permit that allows cabbies to legally cart people up off the street–has been rising at an exorbitant rate since the 1970s due, at least in part, to inflation. (Chart courtesy of Reuters.)
New York imposes strict limits on the amount of medallions it gives out (which, let’s remember, are required for for all legal cab operators). Just over 13,600 medallions are currently in circulation.
While the last batch of medallions auctioned off at the end of February went for as much as $965,000, UberX, the service’s cheaper, ride-share service, doesn’t require them. All you need to do to become an UberX driver is to pass a (rather strict) background check; a 30-minute online training session; and proof of a driver’s license, registration, and insurance. While Uber has a separate arm, UberTaxi, that caters to licensed cabbies, its primary strategy of targeting the less regulated radio-dispatch ride-providers was intentional.
Now before you quit your desk job and commit to a life shuttling along intoxicated millennials, New York is a unique case in that it is densely populated, which has allowed the ride-giving economy to flourish.
In fact, some view the high prices that taxi medallions still fetch as proof that the existing industry can happily coexist with Uber–at least for the time being. “The taxi business is as strong as it’s ever been,” said Andrew Murstein of Medallion Financial (a company that helps the taxi biz broker deals) back in February, “despite Uber, because people in major cities will still go and stick their hands in the air.”