Business & Economy

Why Older Uber Drivers Earn Less Than Younger Ones

Keith Cooney has been driving for Uber in South Lake Tahoe for more than three years, Aug. 26, 2019.
Keith Cooney has been driving for Uber in South Lake Tahoe for more than three years, Aug. 26, 2019.
David Wagner/KPCC

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Older workers have been tapping into the gig economy in California. Some aren’t ready to retire. Others may face age discrimination when looking for other jobs. 

Gig platforms can be fairly easy for many older workers to join. But research shows that on certain apps, they’re earning less than younger workers. 

“There could be a very substantial pay cut, per hour, when moving from a career job to something like the gig economy,” said Rebecca Diamond, a Stanford University economist who has done research on platforms like Uber. 

Big changes could be ahead for gig workers in California. State lawmakers are preparing to vote this week on a bill week that would reclassify many independent contractors as employees, with the aim of providing greater protections to workers who currently don’t receive the benefits of more traditional employment. 

Despite the lack of benefits, plugging into the gig economy has been an attractive option for some older jobseekers, because the barriers to entry on many apps have been low. 

Keith Cooney, who turns 65 in October, is an Uber driver in South Lake Tahoe. He usually leaves the windows down when he drives, letting his passengers enjoy the crisp mountain breeze and the scent of pine trees. 

"They love the fresh air,” Cooney said. “I say, 'Is that too much wind on you?' 'No, we love it.' So I say, OK!"

Driving for Uber gives Cooney a chance to meet riders from all over the country. He said a typical ride lasts about 10 to 15 minutes, long enough to strike up a conversation about where people are from. 

"I tell them I've been here about 20 years, I'm originally from New Orleans,” he said, his accent starting to come through. “They want to talk about the restaurants, the music, the food. So we carry on a conversation."

Cooney may be reaching an age when workers in previous eras would consider retirement. But he said he has no plans to stop driving anytime soon. 

He previously worked as a concierge at a local timeshare, but he said his boss was pushy. So in 2016, he switched to Uber. It was easy to sign up, and he liked the idea of not having a boss at all. 

"I set my own hours,” Cooney said. “I work when I want to work. And so far it's been working for me. I've been able to pay my bills." 

But Cooney said Uber drivers in South Lake Tahoe have to deal with one major challenge: demand is highly seasonal. Tourists swarm this resort town in the summer, and they come to hit the slopes in the winter. 

During the off seasons, Cooney will have long dry spells when he hardly gets any riders. This past May, "I was lucky to make $20 or $30 a day,” he said.  

He’s just entered another down spell. “After Labor Day, it will start slowing down and it will be slow until Thanksgiving,” Cooney said. 

 Uber drivers in South Lake Tahoe see demand spike during tourist seasons, and plummet at other times of year, Aug. 27, 2019.
Uber drivers in South Lake Tahoe see demand spike during tourist seasons, and plummet at other times of year, Aug. 27, 2019.
David Wagner/KPCC

 

Still, Cooney thinks the flexibility of driving for Uber makes it a pretty good job for older people. This part of California has a high percentage of seniors. El Dorado County’s median age of nearly 46 is the fourth highest in the state. 

The gig economy can be a fallback for those struggling to find other employment, but gig jobs are not always lucrative for older workers. 

Diamond, the Stanford economist, co-authored a recent study that broke down earnings for Uber drivers by age. The researchers found that 60-year-old drivers earn nearly 10% less per hour than 30-year-old drivers, on average.

That’s not because Uber pays younger and older drivers differently. 

“Obviously, the Uber formula for pay is the same for all workers,” Diamond said. 

A large part of that gap can be explained by where older drivers live. 

“Older workers live in the suburbs more than younger workers do,” Diamond said. “If the suburbs pay less, they're going to sort of have to just accept that.” 

Suburbs and rural areas typically do pay less, because there’s less demand from riders. Younger drivers are more concentrated in cities, where demand is higher.

Timing is important too. Older drivers tend to avoid working late at night, when demand can peak with people hailing rides home from bars. 

Diamond said these pay disparities make sense, based on where and when older drivers tend to work. But the gap is still notable, because it’s the exact opposite of what happens in more traditional jobs, where there’s a norm that older employees earn more than younger workers. 

Older drivers get no such premium on Uber. 

"It could have a lot of beneficial job characteristics,” Diamond said. “But the pay may be very different than what the workers had been experiencing in their longer-term jobs.”

Khymberleigh Levin, 58, said she was surprised to hear that younger drivers out-earn older ones on Uber. 

"I think I drive just as much as a young driver does," said Levin. 

She drives part time in South Lake Tahoe, but said she focuses on times with high demand, often driving until 2 a.m. on the weekends. She doesn't feel like she's putting in less effort than younger drivers. 

Levin said it would be impractical to chase higher demand by driving all the way to a larger city, such as Sacramento or San Francisco.  

"Would it really pay?" Levin asked. "You're paying for your gas there, wear and tear on your car, and a hotel there because you can't drive back. So I haven't really thought of it. Also, to be honest, I feel a lot safer here than I would in a big city."

Uber declined to comment for this story. But in the past, the company has pitched itself to older workers as a great way to make extra money, stay socially engaged and control your own schedule. 

It once directly recruited older drivers, offering a $35 incentive to new drivers who signed up through an AARP subsidiary. 

Keith Cooney said he understands why older drivers like him can end up earning less. 

“I know that if I were to work from midnight to three in the morning, that's when people really make a lot of money,” Cooney said. 

He used to work that late when he first started driving. But now, he’s just not willing to put up with drunk passengers in the middle of the night. 

“I've never had anybody throw up in my car,” he said. “They've come close, but they never have.”

Cooney said in a bigger city, he’d be able to get rides year-round. And he might earn more. But he’s not about to move out of South Lake Tahoe in order to find out. 

The California Dream series is a statewide media collaboration of CALmatters, KPBS, KPCC, KQED and Capital Public Radio with support from the Corporation for Public Broadcasting and the James Irvine Foundation.