I’d recommend not being belligerent if you’re trying to convince anyone of anything.
There’s various points under discussion here. Most people have already conceded that it’s possible to make money driving for Uber. So the questions are:
does the median driver make decent money? or is it just the right end of the bell curve that’s making money?
is there enough business to scale to a multi-billion dollar industry that can underwrite Uber’s unprecedented valuations after taking into account their 7+ years of multi-billion dollar losses.
And yeah, Uber might be “paying” for the insurance – but they’re $1 billion + in the red year after year with no end in sight.
I think this is a good point, but I met an Uber driver once who drove exactly for that reason. He had a new car, a good job as a physical plant engineer, but occasionally he needed a few hundred bucks to cover the odd expense related to his kids and didn’t want to be on someone else’s work schedule (delivering pizzas or whatever). There’s no financial product where you can sell your car off in 1/1000th increments, so Uber would let him do that. I think for a lot of folks trying to scrape through a patch, being able to slough off part of the value of your car and put in your pocket is a damned good thing. This fellow, at least, was very clear-eyed about what he was doing and seemed happy for it.
To be honest I really don’t know. I know zero youtubers, and two twitch-whatever-you-call-thems. One of them makes hobby break-even kind of money. They other earns extremely big bucks, but is also phenomenally talented at a relatively popular game (Guitar Hero).
I expect the real world ratio is far lower then “50% make bank”.
I know one current Lyft driver, she doesn’t make very much (but loves the flexible hours as it lets her do it along with her normal job), and one ex-Uber/Lyft driver who says it pays way less then a professional driving job (i.e. bus driver), but it use to pay more.
You are right, maybe they are doing things he isn’t, and are making decent money.
Alternately they see themselves as locked into a deal that they wouldn’t have made in the first place (paying the lease on a car they wouldn’t have bought if they knew how little they would earn), but don’t see a viable option to get out of it.
It is also possible that they are other factors. They are “happy” with a low hourly rate because it gives them some flexibility, or they already had the car for some reason and view it as a sunk cost so they have a higher rate of return.
You could also be right that this guy’s math is missing some important factors. Other have pointed out he “billed” the cost of the whole tank of gas against his earnings, but didn’t drive anywhere near a tank of gas’s worth. He may also have chose a poor set of places to earn from. Maybe everyone else knows a few good “surge spots” and those are really what push you into the black.
I take both Uber and Lyft pretty frequently for both business and pleasure, in large part because the Toronto taxi situation was almost as bad as the NY one (stupid high medallion prices and corruption leading to deplorable service), and Uber really disrupted the incumbents.
I talk quite a bit with my drivers, and most of them say they do in fact make a good deal of money. It is, of course, possible that they’re wrong, but I think the answer is probably somewhere in-between. They are probably not making as much as they think they are, but are making more than these single-day estimations would have you believe.
A large majority of the drivers cite the “work when you want” level of freedom as a big driver as to why they drive for Uber/Lyft. There’s something to be said for working on your own terms, even if it isn’t the optimal use of your time for generating income.
The other really interesting situation I’ve noticed is the significant increase in female drivers. I don’t think I ever had a female taxi driver in all my years pre-Uber, whereas now, depending on the city, it may be even money as to the gender of the driver that picks me up. I’ve always thought there was an underreported story there, as well.
I truly hope one of these two behemoths gets their act together on the business and ethics side soon, because the world isn’t going back to the world of pre-rideshare at this point.
He got the tax paid all wrong. 54 cents a mile driven is taken off the top. That is total rides driven- with or without a passenger as long as you are logged on. Typically one and a half times more than ride miles. That is 81 cents a mile driven making 90 cents a mile (Without surcharge of course) Plus we write off phone, car washes, phone chargers, water and treats given, a meal a day- and in my case my home office, driving shoes, sunglasses, polo shirts to drive in etc etc. Add in charitable contributions for donating used items it makes a big difference. Last year I got a few hundred back- so less than zero taxes paid in. all legally.
A tech company made an app to help people carpool. Then they ‘pivoted’ to underpriced taxi service and somehow thought they would make money from it. I’m not sure they still believe they ever will or if they’re just shouting really loudly to stave off the eventual collapse.
Adding business use to my car insurance (which I had to do because I occasionally drove between two workplaces, which in the UK counts as business use) cost me practically nothing. Although that particular policy did not cover carrying passengers for hire.
Well, carrying passengers as a business is the key here.
If you cause an accident, the cost for your insurance company to compensate the other guy for his car is trivial compared to the cost of settling personal injury claims when one of your passengers is killed or crippled.
Won’t hurt to check the fine print to see what your insurer’s policy is on carrying hitchhikers in this context.
In some countries, if you want to carry passengers as a business and/or more than 8 passengers, you’ll have to upgrade your driver’s license. And you won’t get insurance without that license.
I was replying to a comment about delivering pizzas (which I would have been covered to do).
As for hitchhikers, etc., the policy I had allowed me to carry passengers in return for payment, but not for profit or as customers of a business.
And yes, in Europe any vehicle which can carry more than 8 passengers is considered a bus and requires different insurance and a special licence even if it’s not used to carry paying passengers (though the UK at least has some exceptions allowing small buses to be driven on a car licence for non-commercial organisations).
Yes and no. Do I believe that humans are very, very bad at evaluating business opportunities? Yes. Consider all the people who get suckered into MLMs. Do I believe that all Uber drivers are bad at bookkeeping? No, I don’t. That’s based on a very small sample, though.
My experience with Uber is limited to one trip to Las Vegas. I had three or four different drivers. All were great. Las Vegas is probably the optimal place to drive, though. One guy was driving as a second job in the evenings (he also had some entrepreneurial vision), one woman was driving while working on some entrepreneurial venture, and one guy was retired from the casinos and driving to fill his days and pay for his second home.
The problem with this idea is that the barriers to market entry are so low. Yes, there is some network effect, but not enough to allow these guys to charge wildly higher prices once they’ve driven traditional taxis out of business.
inconvenient facts like this haven’t stopped investors from keeping Amazon’s stock at extremely high levels for two decades based on a similar set of expectations.
The barrier to entry to making a Facebook ot Twitter clone is really low too, but nobody has succeeded there either. Once you eliminate all incumbents with predatory pricing, then inertia and network effects are on your side, and it will be really hard for someone to get enough mind share to compete with you at your scale, even if they are cheaper.
ETA: eliminate the incumbents and do not submit to any of the regulations, and you can charge what you like in as opaque a manner as you like. If Uber kept the base “list” price artificially low but started charging more for surge pricing and charging it more often, then how would you know that they were robbing you blind? How would you know that they were now more expensive than a new upstart traditional cab company? Once Uber becomes the only player in the market and succeeds in preventing municipalities from regulating their service, they can do all sorts of sneaky shit to raise prices without people realizing it, barriers to market entry or not.
Well the network effects for social media are stronger. Rides aren’t like friends. Most people don’t have a favorite driver that they want. So an existing platform can’t raise prices too high before consumers would abandon that platform and move on to a cheaper one. I think that what’s going to cut FB down to size is the generational effect. Kids are going to want to be on different networks than their parents, but once they and their friends are IN a network, they’re going to tend to stick with it. So Twitter skews younger than FB and some other network will be more popular with an even younger crowd.
Uber’s meltdown continues. Mass exodus of executives who do not want their name or resume tainted.
Drivers turnover is now 96% yearly. They soon wake up and realize they were lured by the hyped up social media advertising. They can not net net minimum wage after paying Uber 30-40% off the top of the fare and then all operating expenses plus the 14.5% self employment tax and diminished value of their vehicle.
Uber’s toxic business platform operating unregulated in a regulated industry can not make a profit ever. Banks and investors have finally realized this.
Mr. Son of SOFTBANK was conned out of $8.5 Billion dollars in which the early investors and promoters took $8.B for their own pockets. ( Travis Kalanick,(co-founder, ex-CEO and still BOD) took $1.4 Billion in his pocket. Surely,Charley Ponzi is smiling looking up from hell. NO MORE OUTSIDE MONEY EVER. No more credit lines, loans, investors!
Uber’s burn rate of injected capital is now over 90%.
MASSIVE LAWSUITS ARE PILING UP DAILY GLOBALLY.
No chance ever of an IPO. Uber has never had a certified audit of its stock sales and all financials. SEC has red flag up on expecting a faulty S-1 registration and “comic book” prospectus. SEC chairman Jay Clayton can not sign off on an unregulated company operating in a regulated industry. It is not disruption but defiance of the US Code laws.
Uber’s guise as an app only company operating as its bluff is over. Uber is a Motor Carrier transporting passengers for compensation. Uber CONTROLS all portal to portal operations including the money, hiring/firing of drivers, electronic driver’s handbook, scoring/rating systems, insurance payments and of course the app itself. Uber’s app controllers are numerous at SF HQs. Uber is the employer and the driver is the employee. Labor laws have been violated since inception, thus defrauding the US Government of taxes.
Uber;s meltdown is headed for Chapter 7 which is all that is left for them. The sooner the better before the FEDS come.
In my area, it was hard to find any company willing to extend that coverage for food delivery, let alone passengers. The premiums for food were very high - maybe because there were only two companies offering policies. I guess this explains why Uber self-insures drivers.
