A proposed ordinance in the Chicago City Council would set minimum standards for transportation network driver compensation. In this brief we analyze drivers’ earnings in Chicago under current law, and what drivers would earn under the proposed policy.

To examine driver earnings, we calculate net earnings (income minus expenses) during a driver’s full shift. This includes all of the time the driver is working–whether they have a passenger in the vehicle, are en route to pick up a passenger, are engaged to wait for a request, or are driving back to an area where they are more likely to receive a new request after dropping off a passenger. We find that the typical passenger driver in Chicago had net earnings of $10.85 an hour in January 2022, not including tips.

In order to provide a measure that is comparable to wage-earners, we next calculate employee-equivalent earnings. This takes net shift-time earnings and accounts for the value of mandatory benefits a worker receives when they are a W-2 employee. Using employee-equivalent earnings allows for an apples-to-apples comparison between earnings from workers treated as independent contractors and those paid as W-2 employees. We find that the typical passenger driver in Chicago had employee-equivalent earnings of $9.05 an hour in January 2022.

The proposed Chicago ordinance would set minimum pay for drivers at 65 cents a minute and $1.85 per mile during the time a passenger is in the vehicle, and a minimum payment of $7 per ride. The minimum per minute and per mile structure is similar to laws already in place in New York City and the states of Washington and Minnesota. We find that the proposed minimum driver compensation standard would bring average driver employee-equivalent earnings to between $18.76 and $21.95 an hour. Individual drivers may earn less or more than these amounts on any given day depending on traffic, waiting times, and the vehicle driven, among other factors. This is a marked increase over current earnings, but still below a living wage for a single individual or two working parents with one child in Cook County. It will be important for the City to adjust rates going forward based on the average share of a worker’s full shift that a passenger is in the vehicle as well as on the cost of living in order to maintain the desired standard for driver earnings.

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