An Uber driver picks up a rider at Toronto's Union Station in 2022. A new report has found that rideshare drivers earned a net median hourly wage of $5.97 an hour in 2024, which is well below minimum wage.Christopher Katsarov/The Globe and Mail
Rideshare drivers in Toronto using digital platforms such as Uber and Lyft are earning substantially less than Ontario’s hourly minimum wage when their idle time and expenses are accounted for, pointing to tough financial circumstances for a group of workers who are largely young, male and racialized.
Drivers on ride-hailing apps in the city earned a median hourly wage of $5.97 in the first four months of 2024, which accounts for all of their time on the road and net of costs for providing their own vehicles, according to a City of Toronto report published Tuesday. For most of this year, Ontario’s minimum wage was $16.55 an hour. It rose to $17.20 on Oct. 1.
The report, which was commissioned by the city and conducted by researchers at the University of Toronto and Université de l’Ontario Français, relied on a data set of 84 million trips taken in Toronto between Jan. 1, 2023, and May 1, 2024. Researchers also surveyed 1,000 rideshare drivers and obtained data on driver expenses, such as fuel, car insurance and maintenance, in order to assess their net earnings.
Almost the entirety (96 per cent) of the surveyed drivers were male, and the majority identified as racialized (71 per cent). More than 60 per cent of Toronto’s rideshare drivers were between the ages of 21 and 39.
The drivers are highly dependent on the wages from these platforms. Sixty-two per cent of the survey respondents said they worked more than 30 hours a week on the ridesharing apps, and 65 per cent said it was their main source of income.
But their wages vary greatly based on several factors, including the time they spend idle between trips. Apps such as Uber and Lyft only pay drivers for “engaged time,” or time spent driving a customer from their pickup location to their destination. The report showed that engaged time accounted for 65 per cent of a driver’s overall duration on the road, leaving around 35 per cent of their time idle.
Median hourly wages for engaged time were substantially higher than other compensation metrics. The report found that drivers earned $33.52 an hour in 2023 and $33.18 an hour in 2024 if the time they spent idle was not factored in. Once idle time was accounted for, median earnings dropped to $25.23 an hour in 2023 and $22.46 an hour in 2024.
Rideshare drivers, who are independent contractors and not employees of the digital platform companies, own their own vehicles and have to cover expenses such as gas, insurance and maintenance. Once those costs were factored in, net median earnings fell substantially to $15.31 per engaged hour in 2023 and $15.35 per engaged hour in 2024.
But when net earnings were calculated for the entire amount of time a driver was on the road (looking for and giving rides), they fell drastically to $7.94 an hour in 2023 and $5.97 an hour in 2024.
In a statement to The Globe and Mail, Uber spokesperson Keerthana Rang said the city’s earnings report had “serious flaws,” because it looked at earnings for trips starting in Toronto and excluded cross-municipal border trips across the Greater Toronto Area.
Ms. Rang also noted that it did not take into account drivers working on multiple apps at the same time, an argument that Uber has used repeatedly to justify the engaged time metric. “Last week, Toronto drivers earned $30.10 per hour for engaged time on Uber, excluding tips,” she added. Lyft did not respond to a request for comment.
The difference between what drivers earn for engaged time versus total time on the app is a critical point of contention between policy makers, gig worker advocacy groups and the tech giants themselves. Uber and Lyft have often said their drivers get paid above minimum wage, using engaged time to define minimum hourly earnings.
Labour advocates, who are pushing for digital platform workers to be classified as employees under provincial law, argue that designating these workers as independent contractors allows companies to pay them less.
Ontario’s Digital Platform Workers’ Rights Act, introduced by Ontario Premier Doug Ford’s government in 2022, forces rideshare companies to pay their drivers a minimum wage – but only for engaged time, changing little in terms of net wages for drivers.
But the report found that even when using the engaged time metric, 57 to 58 per cent of drivers earned below the Ontario minimum wage, which rose from $15.50 to $16.55 over the report’s survey period.
On Tuesday, Toronto Mayor Olivia Chow called on the provincial government to amend regulations before the Act takes effect next July to factor in drivers’ net income, ensuring they are actually getting paid minimum wage.
The City’s report coincided with a proposal from city staff to limit the number of licensed rideshare drivers in Toronto to 80,429 – a move they say will mitigate increasing traffic congestion and emissions. Electric vehicles are exempt from the cap.
There are approximately 62,000 rideshare drivers in Toronto according to the city’s calculations, which are based on the number of licences issued to drivers. Rideshare drivers need a licence from the city to use Uber or Lyft.
But critics argue the cap is not stringent enough and will not result in measurable improvements in congestion and emissions. “We need to dramatically lower the total number of private transportation company drivers to increase drivers’ earnings and reduce congestion and emissions,” said Thorben Wieditz, an activist and co-founder of the labour consultancy Metstrat.
“Exempting EVs from the cap when the entire fleet is in the process of transitioning to low-emission vehicles is a fatal flaw and sets up a toxic competition between the interests of workers and the environment,” he added.