It’s no secret that Uber is my one of my favorite innovations for ground transportation. When public transportation in a city isn’t good, I used to get really frustrated by the lack of options and taxi “mafias,” though fortunately Uber has solved that problem in many cities.
Uber Black is the “standard” service and a bit more than a taxi, while they also have UberX, which is usually cheaper than a taxi. And thanks to the instant feedback loop (you rating the driver and the driver rating you), service is excellent across the board, in my experience.
I feel like I understand the economics of Uber Black pretty well. The cost is a bit higher than what you’d pay for a taxi (though flat rates from airports can be a steal, especially internationally), but for that additional fee you’re getting a nicer vehicle, GPS tracking, and the convenience of paying through the app.
UberX, however, is another story.
UberX is the low-cost version of Uber, and doesn’t have the same restrictions in regards to car type. So it seems like they’re mainly personal vehicles, as opposed to Uber Black, which seems to typically be licensed limo drivers. But the prices are often less than half the cost of Uber, and in some places they’re more plentiful.
I’m in Chicago this weekend for a frequent flyer gathering, and it was a pretty long day, so I thought it might be nice to order some pizzas. Apparently our hotel is outside the delivery zone of every Domino’s in town, so a couple friends offered to go pick up our order.
The store was only a few miles away, so I requested an UberX to take them there and back. They should have only been gone a few minutes, though unfortunately the Domino’s was still dealing with the aftermath of their $1 pizza promotion, so they had to wait for the order.
And wait.
And wait.
And wait.
All told they were waiting for pizza for well over an hour, plus the ~10 minute drive each way. I’d told them to just have the UberX driver wait, since we didn’t know how long it was going to be (and it can sometimes be tough to get an Uber in the suburbs on a Saturday night).
After an hour and forty minutes though, I was a bit scared to look at the final fare.
Clearly I needn’t have worried, but how the hell are they making any money at these rates?
That’s cheap as can be to start with, and when you factor in the $30 referral credits and Amex bonuses I just don’t understand how this is profitable.
What am I missing?
Al you hit the nail on the head! Sooner or later Uber will run out of drivers once they figure out what a scam it is. For you cheap customers that think it is a 20/80 split you have no clue. And another thing, you idiots that don't tip and wonder why your rating is below a 5, that's why you cheap ppl throw the driver a few bucks.
After ubers now 25% off the top, the drivers also have to pay gas, their own ins, and a mileage deduct. Example. A friend in LA for Ux, after a 75hr week, went 1400 miles, made $1335 in fares. After U fees, gas, in, and uber $1 deduct per fare and mileage deduct, he took home a WOPPING $4.38/hr... $326/per week, for 75 hrs worked!!!!! U has also grossed more $$ than any company in...
After ubers now 25% off the top, the drivers also have to pay gas, their own ins, and a mileage deduct. Example. A friend in LA for Ux, after a 75hr week, went 1400 miles, made $1335 in fares. After U fees, gas, in, and uber $1 deduct per fare and mileage deduct, he took home a WOPPING $4.38/hr... $326/per week, for 75 hrs worked!!!!! U has also grossed more $$ than any company in the world in 3 yrs, more than most companies make in 8-12 yrs. and who's doing all the work? The drivers. And who's taking all the earnings? The two greedy sob's in SF. UBlk doesn't make much more. It's pretty bad. Plus, if your a driver, and U says your an independent contractor, then how are they suspending drivers for not meeting perfect ratings?, because the drivers are employee's, not IC's. It's a great alternative to cabbies, but with the greed of its two CEO's, U won't last much longer. The karma of the greed will keep closing in. Be patient.
Sending Uber to pickup Dominos one of the greatest pizza markets in the country is laughably absurd. In so many areas of the traveling world Lucky is a genuine expert, but in the sense of living like a local he seems to be a perpetual newbie.
Re: Mr Endrr " 1 – Driver spoke clear English , 2 – automatically sent email with detailed invoice with driven route on a map, 3 – no tip allowed 4 – driver communicated with me during trip 5 – Car was a large new Infinity with real leather seats– , Yellow driver: !- could not speak one word of English, 2 – Was on the phone talking to someone with a clicking sound language...
Re: Mr Endrr " 1 – Driver spoke clear English , 2 – automatically sent email with detailed invoice with driven route on a map, 3 – no tip allowed 4 – driver communicated with me during trip 5 – Car was a large new Infinity with real leather seats– , Yellow driver: !- could not speak one word of English, 2 – Was on the phone talking to someone with a clicking sound language all the way, 3 – A sign in taxi suggested 25% tip!!!! 4 – got a blank paper as “invoice” that I needed to fill out myself, 5 – Car was an old Crown vik with plastic seats, I think our real springs and differential followed us on the highway a few miles back definitely was not part of the car" .
So do you think no Tip allowed is an honest decision, as Uberx being a public service provided to you for the cheapest ride you could get out there ? ! . Come'on dude its fucking United State not fucking European country . They do deserve tip .... . for sharing their new rides in a welcoming envoirment with a friendly attitude .
Well I certainly learned something. I thought uber was totally unregulated--just guys and gals who agreed to sign up to drive people around for $ and be rated. I've been on the fence about the issue of cab drivers objecting. But, hell, if this is a business with a hierarchy and a middle-man, I have just sided squarely with the cabbies. Uber should be regulated like any other car service in the cities. They are...
Well I certainly learned something. I thought uber was totally unregulated--just guys and gals who agreed to sign up to drive people around for $ and be rated. I've been on the fence about the issue of cab drivers objecting. But, hell, if this is a business with a hierarchy and a middle-man, I have just sided squarely with the cabbies. Uber should be regulated like any other car service in the cities. They are totally screwing the cabbies. If it were what I had heard it was (individuals signing up and making the $$ you gave them), I could support that, but this is just plain a way to avoid regulations. (My truck is not with the drivers, but with the business/middle-man.) Thanks for the insight, though.
I've used Uber in several cities. What I find is that most drivers love it because they can work or not, whether it's an hour at a time or a day at a time. Based on that, it's up to them if the money is worth it or not. I live in NYC, in an area not well served by yellow or green taxis. If surge pricing is in effect I'll pass on Uber every time. Otherwise I love it and not a single driver I've spoken to has ever said they do it for not enough money.
If you drive for pay, many insurance policies will not cover you:
http://www.all-about-car-accidents.com/resources/what-uber-and-lyft-drivers-need-to-know-car-insurance.html
If an Uber driver gets proper insurance, I'm guessing it would eat up most of his measly $10/hour.
I'm not in favor of "taxi mafias," but I'm also not in favor of flashy tech companies shifting liability onto the everyday Joes and Janes who seize this "opportunity" to make some extra money.
Uber doesn't employ the drivers. They're independent contractors. And they give the drivers 80% of the fare.
I am a UberX driver. Let me clear this up. MOST markets (I'm in DC) are an 80 percent cut. However, Uber Drivers also get charged 1 dollar for the 'safe rides' fee per ride, the same fee you see on your receipt. Also, unless a driver has switched to using their personal phone (I'm guessing most have, I haven't) a driver gets a monthly fee of about 10 dollars. Assuming the driver drives 20...
I am a UberX driver. Let me clear this up. MOST markets (I'm in DC) are an 80 percent cut. However, Uber Drivers also get charged 1 dollar for the 'safe rides' fee per ride, the same fee you see on your receipt. Also, unless a driver has switched to using their personal phone (I'm guessing most have, I haven't) a driver gets a monthly fee of about 10 dollars. Assuming the driver drives 20 days a month, this is 50 cents a day.
If surge pricing occurs the driver benefits and gets 80 percent of the higher price, If temporary or promotional cuts are made, the driver gets 80 percent of what the normal fare would have been (but not if permanent cuts are made to the market area pricing).
Because drivers are not employees of Uber (a tech company, wink wink), then they get a 1099. meaning, taxes are NOT taken out of the paycheck, but at the end of the year, the driver owes taxes on all earnings.
Then.. the biggest factor, gas. The driver has to pay for gas.
30.10 x 80% = 24.08 - (approx) 1.50 in fees = 22.58. He will see about this amount on his paycheck next week, and then will end up probably around 15 after he pays for gas and taxes. so less than 10 an hour. but he was also free to make personal calls or do whatever he wanted most of that time.
HOWEVER, A quick search of the Uber X base fare in Chicago says that it is .20 cents a minute PLUS .90 cents a mile. in other words... this uber driver was losing money siting around because he wasn't driving miles, where he makes more money. Many drivers would have become antsy and wanted you to call another uber when you were ready if this happened to them. or maybe he was expecting a tip for giving "5 star service"
I only work on days like valentines day or big fridays to make sure I'm not just driving around waiting and just do it to pay off my student loans. I usually make over 30 an hour gross when I drive on these occasions. So no, he wasn't making good money, but yes, Uber X drivers can make good money if they are smart.
I think one person mentioned self employment taxes...This kills most of the profit. Granted, a conscientious driver is going to keep track of all the things to write off but still, this is not a money making job for the driver.
Please order from Lou Malnati's next time.
Thanks a lot for Pizza's Ben, it was a very nice gesture from you
@benny
As a la resident I can confirm! At least 3 to 4 drivers a week for me seem to be actors.
Chicago is the cheapest Uber market. Despite that, the Uber drivers that I talk to are quite happy with the job. Many are cab drivers who like the idea of setting their own hours. Most report making between 15-18 dollars an hour. Where else can you make that kind of money on your own schedule with no education necessary.
Just read an article in the Hollywood Reporter about more actors now working as Uber drivers, instead of the standard job of waiting tables. They say the pay is better and more flexible.
My understanding is there is the 80/20 split but that it is not always in effect and that at time Uber lowers it to encourage more drivers to be active. In addition, there are things like sign-up bonuses and other bonuses I have heard Uber giving out, including for consistently driving. So, are drivers going to get rich? No. But can they make some decent money? Yes. In addition I think it can't be understated...
My understanding is there is the 80/20 split but that it is not always in effect and that at time Uber lowers it to encourage more drivers to be active. In addition, there are things like sign-up bonuses and other bonuses I have heard Uber giving out, including for consistently driving. So, are drivers going to get rich? No. But can they make some decent money? Yes. In addition I think it can't be understated enough that it can be a very lucrative revenue source for a person, like a student, who is trying to set their own hours or needs additional flexibility in their schedule.
With that said, you also have to factor in the cost of operating the vehicle. There is gas, insurance (which most drivers probably are way under insured for), maintenance, etc. Not to mention a lease/financing payment each month. Those costs all eat away at the eventual take home. This is no different than most other driving services, whether it is trucking, taxis or you name it. You often see trucks having "Now Hiring" signs boasting starting salaries at over $30/hour. That sounds great until you do the math and realize you have to pay for your own gas and you can easily burn $15-20/hour. Additionally, and don't quote me on this, as a contractor for Uber, you should be subject to self-employment taxes which means more money from that take home portion has to be given over to the government as Uber is not paying it out of their own coffers.
So at the end of the day, yes, I think you are right, it is not the most lucrative of careers. I think it is one of the reasons I always seem to have an Uber driver who just started. It has become a temp job until something more stable comes along for most I feel. I think it is also going to be one of the biggest hurdles for Uber to have to overcome as they grow and their investors demand profits. My guess is the driver acquisition costs right now are through the roof. Nonetheless, I do believe in the business model as at the end of the day, I believe you will eventually see the deregulation of taxis (or taxi drivers will just end up quitting and not wasting money on medallions if these ride-sharing services are not kicked to the curb) and you will have a large workforce ready for employment.
Ben, Uber eats the free credits and the driver still gets their split. Source: my best friend is the GM for a large metro area.
If you factor in the cost of gas, auto repairs, self employment, taxes etc the chances of breaking even for the uberx driver isn't realistic.
Tips are absolutely allowed. While the founder of uber says tips aren't required, he had slashed the amount of money the drivers earn while his net worth has skyrocketed. Tip the drivers . If you tip a taxi driver for more expensive service that isn't as good, why would...
If you factor in the cost of gas, auto repairs, self employment, taxes etc the chances of breaking even for the uberx driver isn't realistic.
Tips are absolutely allowed. While the founder of uber says tips aren't required, he had slashed the amount of money the drivers earn while his net worth has skyrocketed. Tip the drivers . If you tip a taxi driver for more expensive service that isn't as good, why would a person that pays half the price of a taxi even think it's not right to tip the driver.
Uber drivers take home 80% of the fare. No need to speculate at what percentage they might make, because it's known to be an 80/20 split.
Rose,
You lie.
UberX driver in the suburbs of a large US city here and what you may be missing is the surge pricing element - drivers who Uber full time can plan around being online during high demand hours, usually morning and evening rush hours and weekend closing times, and get up to double or triple those rates. This drive here looks like it was non surge, so it could've been someone like me during off hours...
UberX driver in the suburbs of a large US city here and what you may be missing is the surge pricing element - drivers who Uber full time can plan around being online during high demand hours, usually morning and evening rush hours and weekend closing times, and get up to double or triple those rates. This drive here looks like it was non surge, so it could've been someone like me during off hours from a regular 9-to-5 job just looking to make extra $$ - like last weekend when I took one girl on one drive down to the local NFL game earned enough to cover my tank of gas for that week...and i may or may not have earned miles for that gas thanks to one of Lucky's card suggestions!
I have multiple friends who drive for Uber here in SF. Uber drivers here have more potential to earn a lot of money around our area because of the heavy client base here. As they can get one fare right after another. Base fare here starts out at $2.20 + $0.26/min + $1.30/mile + $1 safe ride fee. So for the same ride. Here in SF you would have had to pay ~$40. 20% of...
I have multiple friends who drive for Uber here in SF. Uber drivers here have more potential to earn a lot of money around our area because of the heavy client base here. As they can get one fare right after another. Base fare here starts out at $2.20 + $0.26/min + $1.30/mile + $1 safe ride fee. So for the same ride. Here in SF you would have had to pay ~$40. 20% of that goes to uber and 80% to driver.
However, if you were too look at it from an Uber driver perspective he/she was losing out on money because within that 1hr 40m (minus the 11 min drive) you had them sitting, they could have easily made multiple fares. As the starting fare for the next ride would have been around ~$5 + minutes/distance multiplier. Business perspective if I was the driver I would have just dropped your friends off because I'd be losing money by sitting there and not able to get any other fares. Especially if it was during a surge pricing hour, which costs most to hail an uber time.
Are you kidding? No, UberX drivers make virtually no money. It is, by most accounts, a horrible, abusive company designed to destroy labor gains and protections. You should not use it.
To give some perspective: the guy in your story likely kept about 60% of your $30, so he probably grossed about $18; subtracting expenses, he likely netted less than the Illinois minimum wage. By comparison: in 2004, well before Uber existed, NYC cab drivers...
Are you kidding? No, UberX drivers make virtually no money. It is, by most accounts, a horrible, abusive company designed to destroy labor gains and protections. You should not use it.
To give some perspective: the guy in your story likely kept about 60% of your $30, so he probably grossed about $18; subtracting expenses, he likely netted less than the Illinois minimum wage. By comparison: in 2004, well before Uber existed, NYC cab drivers grossed about $90,000 a year. There are no hard numbers on this (as far as I know), but assuming standard workweeks and standard NYC rates, UberX drivers in NYC probably make less than 40% of that.
Welcome to the "sharing economy."
UberX is a tech company and not a cab company. You have to look at these companies with a new set of eyes. Amazon didn't money for a long time and even know their online business has extremely low margins, 2-day shipping for $79 a year, now make money on that.
Tech companies have a lot of funding and don't care of bleeding money as much as becoming a defacto standard or a highly popular...
UberX is a tech company and not a cab company. You have to look at these companies with a new set of eyes. Amazon didn't money for a long time and even know their online business has extremely low margins, 2-day shipping for $79 a year, now make money on that.
Tech companies have a lot of funding and don't care of bleeding money as much as becoming a defacto standard or a highly popular service.
Amazon now make money a lot of money and not from its online business. If you have Netflix you are paying amazon too.
You can get that many dominos pizzas for only $329!?
I use UberX very frequently, mutiple times a day occasionally.
Im absolutely sick of the motion of one company monopolizing an airport.
So here is my story just from past week where the airport has one taxi company "contract" aka maffia:
I took the same route with Yellow cab from airport and UberX back to airport. UberX was $20.15 , #YellowCab was $45.66... Uber : 1 - Driver spoke clear English , 2...
I use UberX very frequently, mutiple times a day occasionally.
Im absolutely sick of the motion of one company monopolizing an airport.
So here is my story just from past week where the airport has one taxi company "contract" aka maffia:
I took the same route with Yellow cab from airport and UberX back to airport. UberX was $20.15 , #YellowCab was $45.66... Uber : 1 - Driver spoke clear English , 2 - automatically sent email with detailed invoice with driven route on a map, 3 - no tip allowed 4 - driver communicated with me during trip 5 - Car was a large new Infinity with real leather seats-- , Yellow driver: !- could not speak one word of English, 2 - Was on the phone talking to someone with a clicking sound language all the way, 3 - A sign in taxi suggested 25% tip!!!! 4 - got a blank paper as "invoice" that I needed to fill out myself, 5 - Car was an old Crown vik with plastic seats, I think our real springs and differential followed us on the highway a few miles back definitely was not part of the car... ... you figure out with one I will use in the future.. Unfortunately, many airports monopolizes Taxi service to one company and doesn't allow Uber to pick up only to drop off..
If you wonder how much an UberX driver makes, i would rather point out these Africans drivers are shipped in by the boatload from Somalia and other areas to drive taxis. I understund they are housed together and not sure how much they really make, but looking at their attaire, not sure if they can even keep the tip. How can you argue for your right if you don't speak english. ?
Back to uberX, they are harassed at many places by the taxi maffia, especially at airports. What shocks me that i was eye witness at airport cell phone lot where uberx is allowed , that a police asked the driver to get out of the car, and when they asked if he was an uberx driver, he was "suggested" to leave premises or being arrestef and car towed.
When asked on what charge , they told him he had no permit to be there. By that time another police car arrived and the policemen got out with hand on his firearm.
So he got back into his car and left.
:-(. This airport allows uberx pickups as i do it often.
So as long there is UberX i use it. I love it. Convenient - don't have to fumble for money at end of route.
I know exactly when car gets me. Etc etc
Don't worry, I have heard you can get Domino's delivered for The Residences, where they will heat up each slice individually, upon request. Presentation is supposed to be excellent!
I always assumed - but don't know - that Uber itself eats the promo credits, etc. and pays the driver their usual split even in these situations where the customer is paying less or nothing.
Your uberX driver made 80% of $31.10 which is $24.88 for an hour and 39 minutes, most of which wasn't spent doing anything. This comes to an hourly rate of $14.93, which is substantially higher than the minimum wage, which goes directly into the driver's bank account after taxes (assuming their annual income is high enough to need to pay taxes). Also, uber took $6.22 for simply having an app that people could use and...
Your uberX driver made 80% of $31.10 which is $24.88 for an hour and 39 minutes, most of which wasn't spent doing anything. This comes to an hourly rate of $14.93, which is substantially higher than the minimum wage, which goes directly into the driver's bank account after taxes (assuming their annual income is high enough to need to pay taxes). Also, uber took $6.22 for simply having an app that people could use and marketing it. Things are a lot cheaper without the middleman.
Also, I don't think Lucky screwed over the driver. The driver made $12/hour sitting there doing personal business and waiting for pizza, while he/she could've been using time and gas driving around Chicago hoping someone would request him/her and getting no rides. This is a familiar story for many uber drivers. Given the time, I'd think that there is high demand for uberX, but if this particular uber were to have been immediately requested after Lucky's ride, I would think that surge pricing would've been in effect.
Here's a recent related article about Uber - https://www.jacobinmag.com/2014/09/against-sharing/
I found the tone of the whole thing to be annoying
Dominos!? You should've gone to Li'l Caesars!
Dominos?!! You should have gone to Li'l Caesars!
Lucky, before you naively shake the pom poms for taxi mafia-crushing, consumer-friendly Uber, do a little research into their strong arm, unethical business practices. Such as calling in thousands of fake pick up requests to Lyft, their competitor here in NYC that they are trying to crush. And what exactly do you think their high priced lobbying talent is going to do - protect us or protect Uber?
UberX drivers make 60 percent of all fares even if you are a no show. Have gotten this from several drivers in Chicago and other cities.
I'm sorry but it's really wrong to make an UberX driver wait for an hour with the "meter" running. They only make 20 cents a minute, so that's $12 an hour where they can't be earning fares on a per mile basis.
You screwed that driver IMHO.
To add to justin, he probably was on his smart phone , making calls ,returning emails, stuff that he'd otherwise have to spend free time on.
I know you didn't want us to focus on the Domino's reference, but it's definitely what I'll remember from this post. (Next time just say "the pizza place" if you don't want it to be the main attention-getter.) I'd drink Duc de Paris before I would eat Domino's pizza!
Assuming most of the 1hr40 was waiting and the uber x drivers make the same 80% as black car, he basically made about double minimum wage to do nothing. Compared to jobs which require similar education or skills, that's pretty good. Do it for 10-20 hours per month and it should cover most uber x car payments...
They pay the drivers peanuts. I have an unemployed friend who was doing it, and the net is less than minimum wage most times. On busy weekend nights in downtown Atlanta, maybe $10/hour average.
Are you seriously eating at dominoes in a city with the #2 pizza in the country??? (NYC is #1, of course) You may as well take 3 day old bread, put ketchup and dog food on it, and stick it on top of your hotel iron for 3 hours. *end of rant* :P
@ RDP @ Brian -- We were ordering 50 pizzas for people to eat from on their way out of sessions. While I love Chicago deep dish pizza, it's not very conducive to just grabbing a slice on your way out of a presentation.
I'm sorry, but you're ordering from dominoes? There are many better options in the Chicago area.