5 ms·

To those of who you are against including the depreciation cost of the car. Here's the math: Income: He works 10-12 hours to make $150/day and works every day

To those of who you are against including the depreciation cost of the car. Here's the math: Income: He works 10-12 hours to make $150/day and works every day of hte year. He will make $54,750 Expenses: He calculated 94,900 miles driven total assuming working 365 days a year. That's about 260 miles a day of driving. Gas cost $12,775 Oil changes $855 Tire replacement $960 Misc Repairs: $5000 So that adds up to $19,950 in expenses. You could reduce that by doing oil changes yourself but whatever. Misc repairs at $5,000 depends on the car itself. So that comes out to be about $34,800 or $39,800 if you're really hating on Misc repairs. Let's also assume that he is in fact working 10 hours a day to get that $150/day. So his hourly wage is about $9.5/hour It's $10.9/hour if you don't include the $5,000 toward repairs. I've limited it to expenses that directly relate to the uber driving specifically and not costs such as depreciation and insurance with come with car ownership versus actually putting miles on your car driving it around.

CydeWeys 11y ago
It's interesting that the final wage comes out to around exactly what minimum wage is. Market forces at work? Driving for UberX isn't exactly a skilled job, and there are enough people with driver's licenses out there that there will always be enough supply of labor (unlike, say, software engineers). Basically, Uber is paying minimum wage not really any different than Walmart, which is around what you'd expect for a low skill profession. And it's hard to say if the Uber drivers can even unionize effectively to capture more of the profits, because there's always so many potential scabs in the wings. The only real solution here is a higher minimum wage, which would filter through to UberX driver earnings through market forces.
- xgbi 11y ago
  Minimum wage only if you consider 365 days of work at 10 hours/day... If you drive Uber for only 8h / day 5 days a week, you'll go way under that.
  - CydeWeys 11y ago
    Minimum wage is calculated hourly, and as such it doesn't matter how many hours a day or how many days a year you work. The vast majority of minimum wage workers DO NOT work anything close to every day of the year, and it's very weird that you'd expect that of people.
  - deleted 11y ago
    [deleted]
  - skolor 11y ago
    Presumably you would have less wear and tear on the car by driving it less. This entirely accepts the initial purchase of the car as a sunk cost, so the number of hours doesn't really factor in, the rest of the costs are all hourly, unlikely the car purchase which is a one time cost.
Zarel 11y ago
On the other hand, most minimum wage jobs don't reimburse you for the costs or time spent commuting to and from work. I wonder if that significantly impacts the comparison. In the other direction, I think the US also has higher self-employment taxes, and of course you don't get health insurance and other benefits. I wonder if that impacts the comparison, too.
- prostoalex 11y ago
  > most minimum wage jobs don't reimburse you for the costs or time spent commuting to and from work The compensating factor here would that Uber drivers are not compensated for the time/distance traveled to pickup point. > I think the US also has higher self-employment taxes The carrot with that is more generous allowances for tax optimization (deductions, SEP IRA limits). > you don't get health insurance and other benefits That is on par with other minimum wage jobs.
  - Zarel 11y ago
    > The compensating factor here would that Uber drivers are not compensated for the time/distance traveled to pickup point. The $9.5/hour or $10.9/hour figure mentioned in the OP compensates for the time/distance traveled to pickup point, including your drive to pick up your first passenger. That was the figure I was referring to. You get misleading results if you compare a gross income from a minimum wage job to a net income from Uber. > That is on par with other minimum wage jobs. I asked a friend working a minimum wage job and she said she got benefits including insurance. Maybe she's an outlier?
- jsprogrammer 11y ago
  >On the other hand, most minimum wage jobs don't reimburse you for the costs or time spent commuting to and from work Uber definitely does not compensate your commute back to your home when you turn the app off. I'm also pretty sure that Uber does not compensate you during your drive to pick up your first passenger, so unless your first passenger is waiting at your parking location, you have an un-reimbursed commute to work as well.
usaar333 11y ago
Why is his daily mileage so high? He states he makes $1.10 per mile, drives 260 miles a day, but only makes $150 a day. This implies that less than half his mileage is being utilized. With an operating cost of about $0.22/mile (it's actually higher given depreciation from excess mileage - I'd guess it's closer to $0.3), he is probably making maybe $0.36/mile driven. (factoring depreciation, < $0.28/mile), which means his net during the year is something like $26k to $34k. My take-aways: 1. The biggest surprise is how low his mileage utilization is. With an efficient dispatch system that Uber offers, I would have expected much higher mileage utilization -- someone shouldn't need to drive around for long searching for rides like a taxi would. 2. He needs to get a more fuel efficient car. His MPG is only 26, which hurts his bottom line.
- thwd 11y ago
  > Why is his daily mileage so high? He states he makes $1.10 per mile, drives 260 miles a day, but only makes $150 a day. He's not paid for the mileage spent on the way to pick up someone, only after they get in.
  - jsprogrammer 11y ago
    Or on his way home (unless he happens to get a passenger going to his neighborhood).
  - usaar333 11y ago
    Of course, but I'm surprised he's spending as much mileage picking people up as what he is earning driving them -- it suggests inefficiency in the dispatching system.
- anon1385 11y ago
  He does say that his MPG is normally 30 when driving for himself, but becomes lower when driving rides because of all the waiting and stop starting.
sethev 11y ago
You can't count both depreciation and the cost of a new car. If you include depreciation, you should only count the transaction costs of a new car (taxes, fees). Otherwise, you're counting the decrease in car value twice: once as the value decreases and once when you replace that lost value with a new car.
- CydeWeys 11y ago
  You can, however, count both depreciation and the delta between the car you would otherwise have and the car that Uber requires you to drive to be eligible.

CydeWeys 11y ago

It's interesting that the final wage comes out to around exactly what minimum wage is. Market forces at work? Driving for UberX isn't exactly a skilled job, and there are enough people with driver's licenses out there that there will always be enough supply of labor (unlike, say, software engineers). Basically, Uber is paying minimum wage not really any different than Walmart, which is around what you'd expect for a low skill profession. And it's hard to say if the Uber drivers can even unionize effectively to capture more of the profits, because there's always so many potential scabs in the wings. The only real solution here is a higher minimum wage, which would filter through to UberX driver earnings through market forces.

xgbi 11y ago
Minimum wage only if you consider 365 days of work at 10 hours/day... If you drive Uber for only 8h / day 5 days a week, you'll go way under that.
- CydeWeys 11y ago
  Minimum wage is calculated hourly, and as such it doesn't matter how many hours a day or how many days a year you work. The vast majority of minimum wage workers DO NOT work anything close to every day of the year, and it's very weird that you'd expect that of people.
- deleted 11y ago
  [deleted]
- skolor 11y ago
  Presumably you would have less wear and tear on the car by driving it less. This entirely accepts the initial purchase of the car as a sunk cost, so the number of hours doesn't really factor in, the rest of the costs are all hourly, unlikely the car purchase which is a one time cost.

Zarel 11y ago

On the other hand, most minimum wage jobs don't reimburse you for the costs or time spent commuting to and from work. I wonder if that significantly impacts the comparison. In the other direction, I think the US also has higher self-employment taxes, and of course you don't get health insurance and other benefits. I wonder if that impacts the comparison, too.

prostoalex 11y ago
> most minimum wage jobs don't reimburse you for the costs or time spent commuting to and from work The compensating factor here would that Uber drivers are not compensated for the time/distance traveled to pickup point. > I think the US also has higher self-employment taxes The carrot with that is more generous allowances for tax optimization (deductions, SEP IRA limits). > you don't get health insurance and other benefits That is on par with other minimum wage jobs.
- Zarel 11y ago
  > The compensating factor here would that Uber drivers are not compensated for the time/distance traveled to pickup point. The $9.5/hour or $10.9/hour figure mentioned in the OP compensates for the time/distance traveled to pickup point, including your drive to pick up your first passenger. That was the figure I was referring to. You get misleading results if you compare a gross income from a minimum wage job to a net income from Uber. > That is on par with other minimum wage jobs. I asked a friend working a minimum wage job and she said she got benefits including insurance. Maybe she's an outlier?
jsprogrammer 11y ago
>On the other hand, most minimum wage jobs don't reimburse you for the costs or time spent commuting to and from work Uber definitely does not compensate your commute back to your home when you turn the app off. I'm also pretty sure that Uber does not compensate you during your drive to pick up your first passenger, so unless your first passenger is waiting at your parking location, you have an un-reimbursed commute to work as well.

usaar333 11y ago

Why is his daily mileage so high? He states he makes $1.10 per mile, drives 260 miles a day, but only makes $150 a day. This implies that less than half his mileage is being utilized. With an operating cost of about $0.22/mile (it's actually higher given depreciation from excess mileage - I'd guess it's closer to $0.3), he is probably making maybe $0.36/mile driven. (factoring depreciation, < $0.28/mile), which means his net during the year is something like $26k to $34k. My take-aways: 1. The biggest surprise is how low his mileage utilization is. With an efficient dispatch system that Uber offers, I would have expected much higher mileage utilization -- someone shouldn't need to drive around for long searching for rides like a taxi would. 2. He needs to get a more fuel efficient car. His MPG is only 26, which hurts his bottom line.

thwd 11y ago
> Why is his daily mileage so high? He states he makes $1.10 per mile, drives 260 miles a day, but only makes $150 a day. He's not paid for the mileage spent on the way to pick up someone, only after they get in.
- jsprogrammer 11y ago
  Or on his way home (unless he happens to get a passenger going to his neighborhood).
- usaar333 11y ago
  Of course, but I'm surprised he's spending as much mileage picking people up as what he is earning driving them -- it suggests inefficiency in the dispatching system.
anon1385 11y ago
He does say that his MPG is normally 30 when driving for himself, but becomes lower when driving rides because of all the waiting and stop starting.

sethev 11y ago

You can't count both depreciation and the cost of a new car. If you include depreciation, you should only count the transaction costs of a new car (taxes, fees). Otherwise, you're counting the decrease in car value twice: once as the value decreases and once when you replace that lost value with a new car.

CydeWeys 11y ago
You can, however, count both depreciation and the delta between the car you would otherwise have and the car that Uber requires you to drive to be eligible.