To put this in perspective: I drove a cab in NYC in the 1970s and early 80s. Drivers who didn’t own medallions were employees then, union members, and for a 10 hr shift I averaged about $100-125, including tips, after taxes. The taxi company owned the cabs and paid for all maintenance and gas. Adjusted for inflation, that’s probably about $300 a shift today. I feel very sorry for drivers today.
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Is that really that hard to believe?
I mean, like 97% of the time that people ask what I studied in college and I say “math” they involuntarily make some kind of strangled groaning noise before putting on a fake smile and saying something like “Oh, that’s interesting!”
Humans are not naturally good at math, and most people don’t do very much to remedy that condition. Of those who actually go out of their way to acquire numeracy, presumably the vast majority are able to get more gainful employment than “Uber driver independent contractor”.
ETA:
This is not an argument that people can’t make money at it. You seem to be suggesting that this guy is exceptionally bad at Uber driving. I’d like to suggest that this guy is actually close to typical – that the median Uber driver is living off the depreciation they’re inflicting on their cars and that most Uber drivers make less than minimum wage.
Yes, you can make a bit of money (maybe twice US minimum wage?) under very particular conditions:
- You have a car that effectively doesn’t depreciate – commenters mention having an older car with 100,00 miles on it (but this is going to be rare, since most “beaters” aren’t going to get good reviews from Uber passengers) and another mentions a car that is due for a paid recall from VW (obviously very exceptional circumstance)
- You drive only at times subject to surge pricing (and the more people offer rides at this time, the less money any of them make; also, limits the ability to make a living off it because you can only turn a profit a limited number of hours per week)
- You drive only in dense urban areas with frequent short trips (so it’s only open to people who can afford to live in such areas or afford the commute, hence Uber drivers from sleeping in their cars
What you can’t do:
- profitably service people who need infrequent and/or long rides
- profitably service people who need trips off peak hours
- profitably service people in suburban or rural areas, or even non-dense urban areas
In retrospect, it should be obvious by stepping out on the streets of any major US city that there is enormous competition in the taxi market already and that the margins are razor thin (even taking medallion prices into account). Also, that individual taxi drivers can’t achieve the economies of scale of dedicated fleet managers negotiating bulk purchases and maintenance contracts at traditional taxi companies. This is all stuff brought up by Hubert Horan in that Naked Capitalism series, by the way.
The upshot is that it’s possible to make money driving for Uber, but it’s not possible to scale that condition up to a multi-billion dollar industry. You can make money driving drunk kids home from the clubs and from the odd yuppie who doesn’t own a car, but that’s a very limited market.
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Unfortunately, tipping well just accelerates the process of shifting responsibility for paying drivers a living wage onto the consumer rather than the employer, enabling the same corporate subsidy that we have on wait staff.
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Yeah I think a big problem with this guy’s experience is the particular geography of where he was driving… Dense metropolitan areas are probably the only place they could make financial sense.
The Lyft and Uber drivers who are making money work hard at gaming the system. Many of them already have jobs. I had a ride from an Army vet who worked in construction in Seattle. He lived in an apartment in a suburb and always did an inbound commute drive to start the day and on his drive home in the evening. He explained that there are settings in each app that allow one to choose a destination neighborhood. He did a few rides before work and some after to catch the evening crunch. He knew every trick to trigger the various Uber and Lyft - like most drivers, he used both - bonuses and premiums. Did I mention he already had a job and a car? Odds are this guy could live on Green Stamps.
Other successful drivers used similar strategies. If you pay attention, you can figure out where to be and when to get the active bonuses, when to switch Lyft and Uber, how to meet the quotas for staying high on the queue for the better rides. One driver was an MBA between jobs. She was only driving for a few weeks, but she was curious about the money involved. She said it was paying for her car and some of her expenses, but she was glad she would be having a real job in a few weeks.
A few drivers use Uber and Lyft when they have split shift work or two jobs with a gap or commute between them. They are out and about. They aren’t at home. They don’t mind driving. Why not pick up a few bucks? It works for them.
P.S. Why not just do a little accounting sheet with expenses and income? Why waste our time with a video? Who has the attention span for that?
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On the other hand, if all Lyft and Uber drivers were to fire those companies, and collectively buy exactly enough computer and internet resources for their needs, I wonder how much more take-home pay they could wrest away from the middlemen?
The consumer will end up paying for it either way, though I agree it’s better to write it into the official prices instead of leaving the system vulnerable to free riders AKA bad tippers.
Uber ends up taking about 30% I think, not including their car financing business.
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I made real good money with lyft…but i had an suv and could carry 7 passengers at once…then had vehicle problems due to dealership selling me a lemon…i traded down…i got a car…you can not think to make money with a car…not going to happen…you only make around 80 a mile. Using a car… Each upgrade in vehicle the more you make…lyft plus i made around 1.85 a mile…you make more with lyft premier…mor with lyft suv and more with lyft lux… Im not driving at the moment with my car its not worth it…upgrade your vehicle and stop complaining
Revenue or profit? If profit, did you amortize costs over the actual lifetime of the vehicle or the expected? Did you compare actual to expected?
Welcome to Boing Boing!
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I’ve taken maybe six Uber rides in my life. They don’t exist in my podunk town, and I won’t use them when I travel by myself because I don’t like the whole “LOLOL awwww does your widdle city have some precious ‘laws?’ FUCK YOU, UBER RUNS THIS TOWN” approach. But when I’m traveling with my elderly parents, they call the shots.
The drivers for at least three of those ~6 rides volunteered how much they hated Uber. Like, they started a conversation, and then steered it themselves to how much they hated working for Uber. One of them supposedly was driving me around on his very last day. Now, maybe that’s just standard driver schtick, although this was before tips were allowed, so… why?!
There’s nothing wrong with the gig economy that mandatory employee-of-the-company status and a robust union couldn’t fix. People complain that would mean tripling the price. Yeah, it would, because that’s the actual cost when the subsidy from venture capitalists and the “independent contractor” driving you around is taken out.
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Even so, they both need a type of insurance that most people tend to ignore. Using your vehicle (or a parent’s vehicle) for business purposes isn’t covered under standard auto insurance policies. The cost of commercial insurance (or the financial hit of getting into an accident without it) is another reason to avoid these types of jobs - unless drivers earn enough to cover the premiums.
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The service that Uber provides is just better than traditional taxis. I have been scammed or overcharged by traditional taxi drivers many times, especially when I go to new cities and tourist areas. This has never happened when I took an Uber. With Uber, the cars tend to be cleaner and more comfortable, and the drivers more courteous. And on top of that, Uber rides tend to be significantly cheaper (I know this is to the detriment of the driver).
As much as I dislike Uber as a company, these are things that cause me to use it when I travel. Traditional taxis are not much better.
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And then there are the hazards that come with the job. Last week in my city an Uber driver was murdered by a customer. People tend to forget that many cabs have barriers to protect the driver. Not normally a protection that Uber drivers can take advantage of.
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This is very true outside of the US. Traditional taxis in Mexico City and other south American cities are horrible, unreliable and often dangerous. Uber is the only way to go in cities like Bogota or Montevideo.
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I average 900-1000 a week driving 12 hours Friday 12 hours Saturday and 10 hours Sunday. 25 to 30% of that is in tips.
I drive a Cadillac that looks good but is ten years old and has 168,000 miles on it.
I save a 100 bucks a week for a new car.
Insurance is mostly paid by Uber. Rideshare insurance adds twenty bucks a month to my tab.
I write off 54 cents a mile, car washes, cell phone, driving shoes, one meal per shift, and home office as i also am a freelance author. The result is I got money back last year.
It pays my bills and i have a great quality of life.
I do drive in California and nearly all my rides are surges. I also get bonuses from Uber for doing so many drives a weekend.
But excellent customer service and positive attitude is the key.
This. As long as they are using individual drivers, the network effect gives the big players (Uber and Lyft) all the power in the situation. Individual drivers or individual customers can’t easily move to a new small or local platform. This lets them command a reasonably large fraction of the fare (25%).
The reason that self driving became a huge priority for Uber is because it changes that dynamic. If Waymo or GM come out with viable self driving taxis and build fleets of them then have the bargaining leverage to reduce Uber’s cut. Now instead of having a really valuable network, Uber just has a nice web app and a payment processor. I would guess that they would have to reduce their cut down to 5% in that scenario.
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Doesn’t Austin have a ride share co-op? I’m intrigued by the idea, but have no idea if it’s been successful or not.
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I shall reiterate.
Uber pays the bulk of Insurance. Get your facts straight!
