The gig economy has made billionaires out of a few lucky entrepreneurs, and millionaires out of thousands of software engineers and other technologists who decided to sign onto the right startup at exactly the right moment. However, many of these “gig” companies—including Uber, Lyft, and DoorDash—have been hit with their share of controversies, including whether their apps exploit contractors for too little money.
DoorDash is just the latest gig economy company caught up in some sort of controversy, after workers complained about the food-delivery firm’s tipping policy. Meanwhile, Uber CEO Dara Khosrowshahi is still on an apology tour of sorts, giving as many interviews as he can in which he describes the company as evolved beyond its lawbreaking, hard-partying early days. The combination of consumer desire for cheap services, combined with pressure from venture capitalists for rapid growth, has led many of these companies to make some missteps.
For software engineers within these firms, however, the high pay might balance out the controversies over company policy. For the following chart, we analyzed software engineer compensation at Uber, Lyft, Doordash, Airbnb, and WeWork. Although Airbnb and WeWork have a different model than the other three—hinging on shorter-term space rentals rather than transporting people and food from Points A to B—we felt they should be included because they feature similar corporate DNA, from a business model based on services-via-app to a reliance on shorter-term customers (and huge doses of VC capital).
(One other thing to note: although levels.fyi data generally aligns with compensation data from other sources, including Glassdoor, many of these gig-economy companies don’t offer as many data-points as other, well-established firms. As a result, these software-engineer salary numbers might not be as accurate as, say, those at IBM; but given levels.fyi’s track record, we’re assuming they’re comfortably within an acceptable range.)
This chart doesn’t provide the whole story, of course. Levels.fyi (which crowdsources compensation data) provides a handy breakdown not only of salaries, but also other types of pay, including stock and bonuses. While the compensation at these companies seems extremely high, that’s because a huge chunk (roughly 50 percent, in the case of mid-level software engineers at Lyft, Uber and Airbnb) comes in the form of stock—and stock, as we recently learned from the WeWork IPO debacle, doesn’t always behave like stockholders would like.
For example, many of Uber’s early employees had high hopes for the company’s stock once it went public. But since Uber’s IPO, the stock price has dipped, eroding the value of those employees’ holdings. (Lyft has also experienced the same troubles.) These startups attracted their top-tier talent by offering tiny bits of equity that, in theory, would translate into many millions of dollars post-IPO—but for at least some of those technologists, things might not be working out like they hoped, especially if their shares are contractually restricted in some way, preventing them from selling.
Let’s compare the salaries at gig economy firms with those at the well-established technology giants. All of the following firms have been around for quite some time, and much of their business focus is on B2B, which is generally a reliable and profitable channel:
As we can see, mature firms often pay more in salary and bonuses than they do in stock. That’s perfect for mid-career technologists who want a steady stream of income, and don’t have the same appetite for risk (or insane work-hours) as their younger colleagues at a disruptive startup.
There are mature firms that pay out bigger chunks of stock, of course. According to levels.fyi, Facebook pays even its newest employees an average base salary of $111,250, a bonus of $67,000—and stock options worth $116,875 (pretty good!). Entry-level Amazon recruits, meanwhile, earn an average salary of $108,000, combined with a bonus of $51,142 and stock options of $70,000 (still not bad!). Google shells out an average of $115,000 for those entry-level software engineers, combined with a $44,000 signing bonus, stock options worth $139,000, and an annual bonus of $22,000 (yay!). The stock-based awards only increase, of course, for mid-level and senior technologists with highly specialized skills.
It’s long been a truism in the tech industry that when you sign onto a fast-growing startup, you assume a certain degree of risk. This salary data does nothing to disabuse that notion. However, if you sign onto a gig economy firm that manages to survive long enough to go public, and the stock doesn’t crash, you could find yourself absurdly rich. For some software engineers, that’s more than enough incentive to jump aboard.