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Uber, Lyft Drivers Earning a Median Profit of $3.37 per Hour, Study Says

• dpflan 9y ago
  To support any discussion on this post, here is an earlier HN post of the same content but from a different source: > https://news.ycombinator.com/item?id=16498551 https://news.ycombinator.com/item?id=16498551 > The MIT CEEPR Research: http://ceepr.mit.edu/files/papers/2018-005-Brief.pdf http://ceepr.mit.edu/files/papers/2018-005-Brief.pdf
• jdpigeon 9y ago
  'If drivers are fully able to capitalize on these losses for tax purposes, 73.5% of an estimated U.S. market $4.8B in annual ride-hailing driver profit is untaxed," they add.' So they might be making money, but only by avoiding taxes. Great. /s
  • greenshackle3 9y ago
    Deducting business expenses from revenue is not 'avoiding taxes', it's what all businesses do. Businesses are taxed on net profit, not on revenue. This is a feature, not a bug. They sound confused about profit vs revenue, that $4.8B figure is not really 'profit' if it doesn't account for operating costs and depreciation of the car. Very few businesses would be profitable if they were taxed on revenue rather than net profit.
• saas_co_de 9y ago
  It does seem that there are glaring flaws in the methodology: 1) They use average numbers for vehicle expenses which are going to be much higher than what professional drivers with strong profit incentives are going to pay 2) They report on a sampled average of all Uber drivers while acknowledging that the vast majority of these are part time and temporary employees who are not really optimizing their profits. If they looked only that those who do Uber full time or for more than temporary work they would get a completely different story.
  • JackFr 9y ago
    The results also seem to defy common sense. While it's relatively easy to believe that the income from driving for Uber and Lyft is lower than most people imagine and it is relatively easy to believe that a small fraction of drivers are actually losing money by driving, it is difficult to believe that that fully 1/3 of drivers are continuing to impoverish themselves. I'm not saying it's not true, but without supporting details it seems clickbaity.
    • rileymat2 9y ago
      I don’t see why this is hard to believe, according to the article it claims the turn over rate is high.
    • notfromhere 9y ago
      Most people aren't math savvy and the long-term costs of riding for Uber are more 'invisible' than the short-term cash that you'll be getting from driving. Uber/Lyft functions by letting car owners get a quick buck in exchange for the long-term value of the car. People use payday loans even though they're fairly scammy and financially irresponsible, why would Lyft/Uber be any different?
  • ejstronge 9y ago
    I’m not sure what I would do differently - what would you have done to address those two problems? Using averages and talking to a representative sample of all drivers seems like a standard approach.
    • saas_co_de 9y ago
      1) Using one methodology for costs and a different one for revenue is a huge red flag. If you are going to use a driver survey to revenue then you should use the same methodology for costs. 2) The researchers acknowledge that the population distribution is highly skewed (more than 80% of drivers are less than 40 hours per week) with a large group of low-mile drivers on one side and a small group of high-mile drivers on the other side. When the distribution is extremely skewed like this the median does not provide a very meaningful picture of the population. The person in the middle who makes $3/hr might still only be driving 10 hours per week. Professional taxi drivers typically work 12 hours per day, 6 days a week or more. NYC actually just recently passed laws to set 12 hour days and 72 hour weeks as a maximum because people were working over that resulting in safety issues. (http://abc7ny.com/traffic/nyc-putting-limits-on-cab-driver-hours-to-reduce-driver-fatigue/1353642/ http://abc7ny.com/traffic/nyc-putting-limits-on-cab-driver-h...) If over 80% of Uber drivers are working less than 40 hours per week then less than 20% are working anywhere close to professional taxi driver hours but that group is probably providing the majority of ride miles and getting an even bigger majority of revenue and profit because they optimize their revenue. For instance, part time drivers will drive in their spare time, while professional drivers will drive at peak hours, which makes a huge difference in revenue.
• toblender 9y ago
  Vs. 0 dollars if these services did not exist.
  • Liquix 9y ago
    Are you implying that if they were not earning $3/hr, they would use those hours to sit around and mope? The point is that $3/hr is a very small reward for your time when compared to pretty much any other use of that hour(i.e. flipping burgers, bagging groceries, making coffee is 3x as lucrative)
    • toblender 9y ago
      This assumes that people want to do coffee / burger flipping on a fixed schedule. Most Uber drivers I have talked to like the flexibility.
    • aianus 9y ago
      Yes. I drove part-time for Uber and the vast majority of Uber drivers are part-time. I had a real job paying 7x more during the day. If Uber didn't exist I just would have earned less. I assure you I wasn't earning $3/h though, that was just what it ended up saying on my taxes because they let me deduct part of my fixed expenses that I was paying anyways like insurance, finance interest, license, registration, etc. It was closer to minimum wage, and tax-free at that (which suited me because my marginal tax rate was high from my day job). Before Uber I just drove for free by myself in random directions for fun. That was way more expensive. Edit: I also have an expensive car that guzzles premium fuel, or it would have been significantly more than minimum wage.
  • wyldfire 9y ago
    What? Hardly. The people who drive for Uber and Lyft are able-bodied adults who could be doing other unskilled labor positions for much more than zero. There's a real opportunity cost here. Hopefully studies like this help the drivers recognize their value and they can negotiate better (leave until their rates increase).
    • 9y ago
• nocobot 9y ago
  I'd be interested to see what the median profit would look like after adjusting for COL. My guess would be that most high earning drivers are in areas with high population density (thus also likely to be more expensive) so I'm not sure if the increased hourly rate necessarily implies that they are doing better.
• zemvpferreira 9y ago
  I wonder how much airbnb hosts are making. In Lisbon most airbnb hosts are amateurs who spend a few hours every week cleaning and greeting, and get the bejeezus taxed out of their parallel activity. I wonder if they’re doing any better than “transportation entrepreneurs” working for ridesharing companies.
  • bsenftner 9y ago
    In Los Angeles, my sister was AirBnB'ing a very nice 2 bdrm condo in an architecturally famous French Castle moved from France to the Hollywood Hills. The condo itself is the former home of a young Frank Sinatra, and the Castle currently has Slash from G&R using a unit as a local get-away. You'd think a place such as this could get a decent rate, right? It goes for under $100 a night right now. The market is so saturated, there is no market.
• filesystem 9y ago
  “Of the five sources of cost estimated per mile (Insurance, Maintenance, Repairs, Fuel and Depreciation), approximately 40% of costs are attributable to Insurance, Maintenance and Repairs, 40% to fuel expenses, and 20% to depreciation.” I don’t understand how insurance is a relevant cost. Insurance is required to legally operate a vehicle - this is something that they must have for their personal vehicle regardless of whether or not they are driving for Uber or Lyft. The only way this is a relevant cost is if they own their vehicle for the sole purpose of Uber or Lyft driving. I have to imagine that this is usually not the case.
  • thesumofall 9y ago
    Depending on where you’re from, the insurance premium will change depending on mileage, commercial use of the car, etc
    • h66p6qb84p4a1 9y ago
      3k8222wj135gt7m207v71u1
  • mywittyname 9y ago
    Insurance for driving an Uber/Lyft is much more expensive than regular insurance, because it's considered commercial. In previous years, people could get away with not having it, but today every insurance company asks specifically if this vehicle was ever used in a driving service and will deny claims if it was found to be.
    • FLUX-YOU 9y ago
      >but today every insurance company asks specifically if this vehicle was ever used in a driving service and will deny claims if it was found to be. This seems crazy or wrong. If I buy a vehicle used as an Uber/Lyft vehicle and that's on record somewhere, but I've never been an Uber/Lyft driver, I will get my claims denied?
      • 9y ago
• thisisit 9y ago
  Discussed 12hrs ago: https://news.ycombinator.com/item?id=16498551 https://news.ycombinator.com/item?id=16498551
• Liquix 9y ago
  What is the incentive to drive for one of these services at that price point? Couldn't these people make more money (and not have to replace their car in five years) flipping burgers or the like? Are drivers misled into believing they will make more? Is the cost per mile intentionally hidden from them?
  • illegalsmile 9y ago
    The few people I know who drive like it because if they have no plans on a Thursday - Sunday night or specific windows of time throughout the week they can turn on the app, drive and make some cash. This adds a lot of flexibility and it's less about the money and more about doing something productive and meeting people. I don't know anyone that career drives for a ride service though.
    • jgalt212 9y ago
      It's the modern day equivalent of being a longshoreman.
      • jsonderulio 9y ago
        This is funny on like four different levels.
  • deft 9y ago
    Definitely being misled, read the marketing uber puts out for drivers. Also desperation, the way uber pushes for driver sign ups reminds me of MLM schemes about "running your own company!! Setting your own hours!!!"
  • dsr_ 9y ago
    Not that I'm defending these companies, but do remember that many people need flexible hours that most minimum-wage employers are actively hostile to.
  • ApolloFortyNine 9y ago
    Being able to begin work whenever they want, and more importantly not work whenever they want. Friend calls and want's to meet at 8? Even if you have a rider you can go off the clock in ~15 minutes.
• derekp7 9y ago
  The problem isn't the profit, but that there are a number of people using this as one of their primary income sources. I'm not sure how Uber et. al was originally promoted to drivers, but I've originally seen it as something like "I'm heading home from work, let me turn on my uber app and see if anyone around me needs a ride going in that direction". Or, "I feel like riding around tonight, no particular place to go, may as well see if I can make a couple bucks by giving others a lift". I know that back when I was around 18 - 22 or so, I would often spend a saturday night just cruising with the radio playing, windows down, and enjoying the ride.
  • willnewman 9y ago
    That could have been the original intent, and they may still use that argument, but if so it needs to be squared up with the fact that they relentlessly try and entice drivers to keep driving longer and farther. See: https://www.nytimes.com/interactive/2017/04/02/technology/uber-drivers-psychological-tricks.html https://www.nytimes.com/interactive/2017/04/02/technology/ub...
  • ProAm 9y ago
    No they wanted full time people, that is why they were giving bonuses if you did 30 rides or something your first week (I dont remember the exact number) but they wanted people on the road a lot.
  • chrisseaton 9y ago
    > I'm not sure how Uber et. al was originally promoted to drivers, but I've originally seen it as something like "I'm heading home from work, let me turn on my uber app and see if anyone around me needs a ride going in that direction". That's not how Uber was originally promoted to drivers at all. Uber was originally promoted to high-end professional car drivers.
    • klenwell 9y ago
      I'm pretty sure I heard ads from Uber or Lyft on local popular music radio stations while driving advertising $15 - $20/hr wages. Some discussion on this site: https://uberpeople.net/threads/uber-radio-commercial.27343/ https://uberpeople.net/threads/uber-radio-commercial.27343/ Not sure if these are the same commercials I heard.
• martin_bech 9y ago
  3 problems. 1. This is at subsidised Uber pricing, where Uber is loosing money at an alarming rate. 2. This means driving for Uber is terrible economicly. 3. This also implies that even getting to driverless cars, Uber will only save 3.37 per hour, not making the business model viable, I would think.
  • bitcurious 9y ago
    3. This also implies that even getting to driverless cars, Uber will only save 3.37 per hour, not making the business model viable, I would think. Should be higher. Insurance, energy and maintenance will be cheaper at the scale of Uber's fleet. Driving style might be optimized for MPG. Cars will be available 24/7 with no downtime.
    • dsfyu404ed 9y ago
      They'll save more than that. They'll be registering/insuring the vehicles in a state where it's cheap to do so. Uber's geographic distribution results in the average uber driving paying significantly more baseline cost just to legally field the vehicle. Being able to choose your jurisdiction is probably a ~$1k per year savings over the current Uber driver average. TBH one of the things I'm looking forward to about self driving cars is that states will be forced to actually compete with each other on registration/insurance/tax. >Driving style might be optimized for MPG If (NumSecondsLightHasBeenRed()) > 3 && NobodyInFrontOfMe){keepgoing()} Not quite what you had in mind, was it? Remember, this is Uber, we're talking about.
      • s73v3r_ 9y ago
        Every state in the union requires you to register your vehicles in the state they're in. You're not going to be able to register the cars in Deleware or South Dakota and have them driving in California.
        • dsfyu404ed 9y ago
          Yes you can. What I described is incredibly common in the rental vehicle business.
• misterbishop 9y ago
  Discussing a rideshare worker's take-home pay as "profit" really accepts the framing of the company. Yes it's technically true that each driver is an independent contractor ("Small Business Owner"), but this designation is a farce without the ability to set pricing. The take-home pay isn't profit in practice, it's wages less unreimbursed expenses.
  • monochromatic 9y ago
    From the driver’s perspective, is there any difference?
    • fjsolwmv 9y ago
      Yes. It's not "profit" because they aren't paying themselves a wage for working. I own a business that I work at, so personal profit only counts after expenses, including at less minimum wage for hours worked.
      • misterbishop 9y ago
        Yeah, that's a really clear way of putting it.
    • deleted 9y ago
      [deleted]
    • facetube 9y ago
      Yes: self-employment tax.
      • regulation_d 9y ago
        Can’t this be avoided by being taxed as an S-corp?
        • hayksaakian 9y ago
          Not to any extent that is relevant for an Uber driver
• ec109685 9y ago
  The maintenance, insurance and depreciation cost of driving Uber an unlimited miles a week is $214 a week, minus a profit margin for a company like Hertz: https://www.hertz.com/rentacar/misc/index.jsp?targetPage=UberFAQs.jsp https://www.hertz.com/rentacar/misc/index.jsp?targetPage=Ube... So any study that says it is more expensive than that to drive for Uber is wrong.
  • ghaff 9y ago
    That doesn't seem inconsistent with a 30 cents per mile figure. If someone drives 1,000 miles over the course of a week (which is the minimum rental), that's about 20 cents a mile for the car and about 10 cents a mile for gas. You can quibble with the details but would seem to be in the right ballpark.
• phkahler 9y ago
  At $0.59 per mile these guys are stiffed really really hard. The IRS recommendation is over $0.50 per mile: https://www.irs.gov/newsroom/standard-mileage-rates-for-2018-up-from-rates-for-2017 https://www.irs.gov/newsroom/standard-mileage-rates-for-2018... Perhaps these companies should charge at least that rate, not to mention the drivers should be setting their own rates on top of that. With an average speed of about 20mph (EPA urban drive cycle) you would need to "profit" about $0.50 per mile to make $10 per hour. I'm not gonna look up minimum wage and it varies per state, but anyone charging less than $1 per mile to give you a ride would seem to be screwing themselves over and would be better off flipping burgers.
• csomar 9y ago
  Two things: 1. The cost is absorbed by another entity, usually the parents. It is the parents' car, or your parents bought you a car. You need some quick cash, so you basically "eat out" of that car to generate that "cash". 2. You are trapped in a situation where you need quick cash. So you "eat out" of your vehicle to generate that cash. This also happens when you have a low "realization" consciousness. (ie: You are bad at math and economics and you think you are making money while you are losing money). By driving Uber you are exposing yourself to greater risks: Accidents, Lawsuits and Lost opportunities have you been doing something else. But most people either have low realizations or are trapped. Usually both of them. I have seen countless of people getting into this kind of business. One of them and probably the biggest is real-estate renting when the economics says NO! The argument is usually: well, it is sitting there anyway so any cash is a profit. It is not and it usually led to worse financial situations and then worse decisions.
  • bsenftner 9y ago
    > a low "realization" consciousness. (ie: You are bad at math and economics and you think you are making money while you are losing money) I've not heard that phrase before. It brilliantly captures exactly how such a clearly predatory business model was blindly accepted by drivers and passengers alike. My ethics won't let me use either as a passenger, regardless of the "good deal"; I never could, and this is an issue with my work as management insists any business travel uses Uber. I flat out refuse. Our CEO's mouth dropped when I explained why, replying in a tiny voice "I'd never considered it that way".
  • mseebach 9y ago
    Uber has deals with car rental agencies in several places that doesn't "allow" you to "eat out" your vehicle equity (I've seen Enterprise in CA and, I think, one other place, and Otto in London). The viability of such deals suggests that the numbers work out even without spending your equity.
    • csomar 9y ago
      Uber was more expensive than a Taxi for me in Paris. Uber gave me a 10-14 euros quote. And for the same distance the taxi took only 7 euros. I'm pretty sure the math might be working on some places. I'm only suggesting that it is possibly not working on other places and users are not aware of that.
• cryoshon 9y ago
  it's almost like i detailed this phenomenon two years ago. https://cryoshon.co/2016/01/11/why-the-sharing-economy-is-awful/ https://cryoshon.co/2016/01/11/why-the-sharing-economy-is-aw...
• eqdw 9y ago
  Ways in which this headline is potentially misleading: 1) Driving for Uber/Lyft/etc is not a full time job, and was not intended to be a full time job. It's a piecemeal work side job. The flexibility of working when you want, and not working when you don't want, is valuable and you don't get it for free. 2) "Profit" is not income. This is profit net of expenses. Expenses that, among other things, you can write off against your income. And to pre-empt the "Uber drivers can't afford tax accountants" criticism, Turbotax costs $50 3) The profitability of Uber driving can vary dramatically place to place. I often ask Uber drivers in SF how they like their jobs, what they make, etc. They consistently report to me that they make between $40k and $55k/yr. This is significantly higher than "below minimum wage". OTOH, I imagine that driving Ubers in a low density place, where cabs are less financially viable (say, Fargo) is a shitty job. Averaging across the San Franciscos and the Fargos of the country to say "Uber is a terrible job" is not an accurate representation of the facts.
  • tom_mellior 9y ago
    > Driving for Uber/Lyft/etc is not a full time job [...] They consistently report to me that they make between $40k and $55k/yr. Is this 55k from part-time Ubering, or is this 55k in total, most of which comes from their "real" full-time job and a small fraction from Ubering, or is it 55k from full-time Ubering in direct contradiction of what you said, or what?
    • AlphaSite 9y ago
      I was talking to a guy and he said he gets around 30usd/h from full item Ubering.
      • tom_mellior 9y ago
        Assuming this is comparable to the above figures of 40k to 55k per year, and assuming 50 weeks worked per year, that comes out to 27 to 37 hours driving per week. Maybe not full time, but hard to argue that it's just a small side thing.
  • balls187 9y ago
• davemel37 9y ago
  Ironically, Lyft is advertising to recruit drivers on this very article! Sometimes ad targeting misses the boat.
  • _emacsomancer_ 9y ago
    Maybe. But there are probably enough people for whom $3.37/hour profit sounds better than $0/hour.
• cypherg 9y ago
  Questionable statistics. I know several people who driver rideshares for a secondary income and do quite well. They're not irrationally wasting their time. They're using vehicles that they're _already_ paying insurance on, et cetera. From their POV, they either drive rideshares and make money (couple hundred bucks maybe), or stay at home and relax. They've explained to me that they do it because their bored or have free time.
  • andymal 9y ago
    Most personal insurance doesn't cover driving for Uber or Lyft. Your friends may want to double check that they're actually covered.
• mseebach 9y ago
  I'm curious as to how they measure hours worked, to come up with the per-hour figure. The brief of the study doesn't mention it at all.
• _zachs 9y ago
  Good thing no one is being forced to drive for Uber. If your main source of income is from being a ride-share driver, the problem isn't with Uber.
  • s73v3r_ 9y ago
    That's not a valid argument. Technically no one is forced into prostitution either.
    • danans 9y ago
      That's a bad example to use. A lot of people have been forced into prostitution, especially trafficked minors.
• graeme 9y ago
  In my city (Montreal) there are some Uber drivers who seem very content and have driven for 3+ years. They often have very nice cars. What is going on: are these drivers just doing it as a hobby? Are they somehow earning more than others? One would assume that you can be fooled and stay in the game for 3-9 months at $3.37 an hour, but not 3+ years.
  • CodeWriter23 9y ago
    Some will earn more than the median, some less. At the Uber Black level, it is possible to earn a decent wage in a densely populated urban center.
    • graeme 9y ago
      Ah makes sense. They could have been Uber Black drivers who decided to take a regular Uber fare. That happens sometimes when there are no Uber Black requests active. I think I'll start asking those with dingy cars how long they've been driving. And I'll ask those with nice cars if they are also Uber Black drivers.
• AlphaSite 9y ago
  Does this include the bonus incentives? From my conversations that’s where the money actually is.
• bparsons 9y ago
  The flaw in these studies are the assumption that the person would not have a car unless they were an Uber/Lyft driver. This has a huge impact on the final per hour calculations. If the vehicle is a fixed cost for the person regardless of whether or not they are a driver, then factoring in the cost and depreciation of the vehicle isn't really a fair measure.
  • jakewins 9y ago
    > If the vehicle is a fixed cost for the person regardless of whether or not they are a driver What? Vehicles are clearly not fixed cost, they are assets that deprecate in value from use. There is some deprecation from age, but by far the determinant of value is miles driven and damage from use. Every mile you drive for Uber is costing you money in lower resale value of your vehicle, both from the miles you add to it and from the probability of damaging the vehicle in an accident.
  • ghaff 9y ago
    Registration and excise taxes are a fixed cost. Insurance may be a fixed cost. (Although you may need a different policy and some policies have discounts/surcharges based on miles driven.) But most costs of car ownership are primarily related to the number of miles driven.
  • southphillyman 9y ago
    BTW Uber has a car buying program. I met a driver in Vegas who claimed to have to work long hours in order to cover the car note and have a livable wage. Felt sorry for the guy because his attitude was very optimistic when it was clear to me he was being taken advantage of.
• yomly 9y ago
  Anecdata: I talked with an Uber driver the other day in London who said his weekly target was to make £1000 gross per week and would adjust hours (ie less or more) accordingly. On the side he was trying to bootstrap a business.
• sol_remmy 9y ago
  This is a duplicate. Previously: https://news.ycombinator.com/item?id=16498551 https://news.ycombinator.com/item?id=16498551
• vlovich123 9y ago
  I analyzed the math here: https://news.ycombinator.com/item?id=16503218 https://news.ycombinator.com/item?id=16503218 TLDR: It's probably correct but also highly misleading in how it's characterized.
• tibbon 9y ago
  In speaking with various drivers I've had I either hear that driving for [Lyft|Uber] is great, or terrible. There's rarely any in between. I've had drivers who had worked with them for years, and seemed to be really happy, also new ones who were happy. Perhaps they have lower living expenses, or this is more pay than they made at other ventures, or uniquely fits their lives. And I've had others who are really frustrated with the app, the GPS, traffic, the company, their compensation, the Pooling services, riders, etc. Of note these are generally in the same geographic areas roughly (Boston and SF is where I ride most and flip between services as needed), so in theory it's sampling from a similar population. One thing in particular I've asked drivers is if pool-services work ok for them. About half say yes and seem to love it, and the other half grumble that it never makes them any money. I really wish I knew the other factors that go into this to understand the root causes better.
  • chadwittman 9y ago
    I've ran into very similar feedback and I survey just about every Uber/Lyft I ride in.
• xivzgrev 9y ago
  I think the methodology is flawed to mix data sources like this. They shouldve surveyed drivers on their costs too.
• qudat 9y ago
  And yet people still do it. I guess the drivers still find it useful, if they didn't, why would they continue driving?
  • s73v3r_ 9y ago
    Because they have literally no other choice? When your choice is to lose money driving for Uber, or starve, you kinda lose the ability to stop if you don't find it "useful".
    • liamhawkins 9y ago
      I'm not defending Uber/Lift here, I completely agree that there is a mismatch between the perception of being an Uber driver and reality, but I don't fully understand this argument. If they have "literally no other choice" were they starving before Uber/Lift existed? These companies haven't existed that long, and the majority of Uber/Lift drivers are not former/current taxi driver that now need to use these apps because the market has shifted. These are people who <5-10 years ago would not have been Uber or Taxi drivers. For these people this market opened up where it had not existed before, an income source that did not exist. Is it better for a space like this to not exist if it can't supply the 7/10/15$/hour that would be deemed acceptable? I genuinely don't know.
      • s73v3r_ 9y ago
        You've not made a convincing argument for why this kind of fraud should exist.
        • liamhawkins 9y ago
          With respect to your original comment about drivers being forced to drive or else they will starve, where is the fraud? If I put up a sign that says "Sit on my lawn and get 3$/hour", and people see that sign and choose to sit on my lawn, am I committing fraud for not paying them more? I still don't understand the argument.
    • 9y ago
• jdlyga 9y ago
  Uber, Lyft, and Juno only exist because the Taxi apps are bad or non-existent. If there was a Taxi app that worked exactly like these 3 apps, and not just for hailing taxis, then there would be no need for this.
  • ghshephard 9y ago
    That is entirely dependent on where you live and the quality of the Taxis. For example, in the London and Singapore, Taxis are awesome. In California, (particularly in the Bay area) - Taxis are horrible beyond belief. The cars are unsafe and uncomfortable, the drivers are terrible and lack knowledge. It's often the case that I will come out of a peninsula hotel (Say, San Mateo) and see a queue of taxis waiting to pick up passengers, and at the same time, a queue of people (myself included) waiting 5-10 minutes for an Uber to arrive. And that's just Uber X. Can you imagine executives used to Uber Black ever getting in a Taxi again? I've taken thousands of taxi rides and over a thousand uber rides. No comparison between the two in certain regions.
    • metalliqaz 9y ago
      In front of that hotel in San Mateo, are the Uber customers chasing a better experience, or a better deal?
      • user5994461 9y ago
        Both.
      • ghshephard 9y ago
        They are almost all business travelers, so multiple possibilities - A big one is Uber travel is trivial to expense, a lot of companies just send it directly into the expense system, and you don't even need to do anything. Another one is (for some reason) a lot of business travelers shy away from Uber X and only ride Uber Black - I have no idea why, after a thousand+ rides in UberX, I really don't see the additional value of Uber Black, unless maybe you are giving a customer a ride? Price is, within reason, irrelevant to business travels - company is paying for it anyways. Speaking for myself, personally - I will do almost anything to avoid having to get into a Cab in San Francisco or the Peninsula, from a experience/comfort perspective.
• gyrgtyn 9y ago
  We should make a web spreadsheet Uber Profits Calculator and a nice little print flyer to quietly leave behind in the back seat.
  • metalliqaz 9y ago
    send me a link when you're finished
• eddieplan9 9y ago
  It's important to not use the IRS Mileage Rate to calculate real cost. (The linked study does not.) The IRS rate is designed for the worst case scenario for the purpose of tax filing (coz you don't want to penalize someone who has to drive a F-150 in a high-gas-price state in a year where gas price spikes to $5/gallon). Even if we don't consider the fact that the cost of vehicle depreciation, maintenance and insurance is an "almost-fixed" or marginal cost because you are going to own the vehicle and pay for the insurance any way, and let's be generous about estimating the cost here: At IRS rate of $0.54 a mile, let's say we buy a Prius (which is the most popular car used for ridesharing), for $23,000, and drive it for 100,000 miles and throw it away. At IRS rate, that's a cost of $54,000. Gas cost is about $8,000 (50MPG [1], $4/gallon). Insurance $1500 x 5 years ($1200 base insurance + $300 extra for rideshare add-on [2]). That still leaves us $15,500 (28.7% of estimated cost) to cover repair deductible etc. That's almost enough to buy another Prius. Edits: I mistakenly said the study used IRS Mileage Rate. It does not. [1] http://mikes-review.com/does-a-toyota-prius-really-get-50-miles-per-gallon.htm http://mikes-review.com/does-a-toyota-prius-really-get-50-mi... [2] https://www.nerdwallet.com/blog/insurance/best-ridesharing-insurance/ https://www.nerdwallet.com/blog/insurance/best-ridesharing-i...
  • jogjayr 9y ago
    > Even if we don't consider the fact that the cost of vehicle depreciation, maintenance and insurance is an "almost-fixed" or marginal cost because you are going to own the vehicle and pay for the insurance any way, But all of these costs go up if you drive more miles. Your vehicle depreciates more if you put more miles on it (but not if it's parked in your garage), you need more frequent oil and tire changes, and your insurance rates go up because you're more likely to make a claim the more miles you drive annually. And rideshare insurance is more expensive.
  • ghaff 9y ago
    The paper actually uses a $0.30/mile figure. "A Median driver generates $0.59 per mile of driving, and incurs costs of $0.30 per mile." The paper actually seems to be trying to make the point that Uber drivers are gaming the tax system because their actual costs are lower than the IRS allowance. $0.30 seems like a fairly reasonable number and it also matches up well with renting a car that's intended to be driven for a week like this and just buying gas for it. (There's also some cost associated with deadheading to the next pickup.) The $0.59/mile revenue does seem a bit low. UberX or Lyft would seem to typically have pricing in the neighborhood of $1.00 to $1.50 per mile of which about 75% goes to the driver. So $1/mile would seem likely to be a better revenue number in which case the net is more like $0.70/mile and I would have to believe most drivers, even in a larger city, are driving 10 miles or more in a typical hour. I doubt driving for these services is a huge win once all costs are taken into account but it seems closer to being a minimum wage job than a total bust.
• rodonn 9y ago
  This paper has actual data on earnings from all Uber drivers in all cities in the US. They find that the average earnings are $20 per hour with a standard deviation of $5 (there is substantial variation across cities and especially across time, with late nights on weekends being especially high earning). http://www.nber.org/papers/w23296 http://www.nber.org/papers/w23296 The authors are very well respected economists from UCLA and Yale, though it should be noted that one author was a former Uber employee. This is substantially higher than the estimates in this newer study unless you think that the per hour operating costs of a car are $16 per hour. The new study bases it's numbers on self reported values from a relatively small sample, which is much less accurate than calculating an average using Uber's actual full database. Another interesting finding from the study I linked is that a majority of Uber drivers work 20 or fewer hours per week and place a substantial value on the flexibility that they get from being able to choose their own hours.
  • haldean 9y ago
    I can't read the paper you link but in the abstract-ish thing you've given here, $20 is a mean. The MIT paper says $3.37 is a median. Both could simultaneously be true!
    • rodonn 9y ago
      Sorry about the paywalled link. Here is one that should be freely accessible. http://www.anderson.ucla.edu/faculty_pages/keith.chen/papers/Final_NBER17.pdf http://www.anderson.ucla.edu/faculty_pages/keith.chen/papers... I agree that the mean and median could in principal be this far apart, but it would require a lot of skew in the data (small number of very high value trips -- seems possible).
  • dragonwriter 9y ago
    > This is substantially higher than the estimates in this newer study unless you think that the per hour operating costs of a car are $16 per hour. Fuel costs per hour could easily be a quarter or so of that, and fuel costs seem to be around 1/7 of total operating costs [0], so, yeah, $16+/hr isn't unreasonably high. [0] https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_statistics/html/table_03_17.html https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/pu...