Monday, September 22, 2014

Can You Make Money with Uber ?

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Uber is not all it is Cracked up to be

If you are a professional driver who is considering a job driving with Uber, there are some things you need to know. Do not be fooled by their deceptive and sometimes downright dishonest, claims about the benefits of joining Uber.  Ads in most major cities are claiming incomes of $1000 per week, while in reality Uber drivers are earning less than half that amount even working 50-60 hrs. per week. The Uber concept is good for the consumer, great for Uber, and horrible for the driver.
In an article that appeared recently in Business Insider , the author interviewed several Uber drivers and they uniformly stated that they have never come close to earning what Uber ads claim, and that earnings have been steadily decreasing for some time now because  Uber has flooded the market in most major cities resulting in less than 50% occupancy for most  Uber drivers.  Not a single driver reported making anywhere near $1000 a week after subtracting gas cost and fees paid by the driver, and of course after Uber takes their 20% right off the top. Add to this the wear and tear on your vehicle and it turns out the driving for Uber pays significantly less than driving for a conventional cab company.

Uber also employs a bait and switch tactic when trying to attract new drivers;  In LA, for instance Ubert started out with a $2.50/mile rate that attracted many new drivers, since at $2.50/ mile the drivers could earn a living without working  a ridiculous number of hours. Once the needed drivers were hired, Uber dropped the rate to a measly $1.10 per mile, not enough to make a living no matter how many hours the driver works. The chart below shows how Uber empoloyed the same tactic in NJ:

NEW JERSEY:
Original Price          Summer 2014 Price              Fall 2014 Price
$2.25/mile                 $1.90/mile                    $1.64/mile
$0.30/minute               $0.20/minute                  $0.20/minute
$3.00 base                 $3.00 base                    $2.00
$7.00 minimum              $7.00 minimum                 $6.00 minimum

As this chart shows, Uber started out advertising reasonable rates that would provide a full time driver with a reasonable living, and within the space of a few months dropped the rates so that the same driver working the same hours would make 28% less; Thus a driver making $50,000/yr gross to begin with would make only $36,000/yr after the rates were lowered.

Another move by Uber to attract more business was to cut rates in major markets to well below -market levels, attracting new traffic (which Uber profits from) while forcing  drivers  to drive longer hours at the reduced fares to make the same amount of money.  Once again, Uber wins, the consumer wins, and the drivers lose.

It is also worth noting that Uber discourages tipping, and didn’t even include the tipping option in the app until very recently. That is because tipping doesn’t benefit Uber, and by not encouraging tipping the service appears more economical to the consumer.

Probably the best indicator of how Uber views their drivers is the fact that they try to convince their drivers that all of their sleight of hand concerning rates, fares, and commissions is actually in the driver’s best interests. Not only do they brazenly exploit the very drivers who have made them rich, but they treat them as if they are ignorant fools who will believe the wild claims that Uber has been making a standard component of their business model. Compare this shady way of doing things with the legal, moral, and business philosophy of the traditional cab company or limo service, and I think you will agree that there really is no comparison at all.

This is also true when it comes to vehicle maintenance and replacement costs since with the legal cab company the driver does not incur any repair or replacement bills like the Uber driver will encounter as his car ages rapidly from the grueling regimen a commercial car endures. The expense of having to purchase a replacement vehicle is enough to put most single car Uber drivers out of business, or at best deeply in the red for a considerable time.

After taking all of these  factors into consideration, it becomes clear that driving for Uber has absolutely no advantages over driving for a traditional, legal, cab company. The cab company’s rate ( currently around $2.40/mile in most urban markets) is not going to fluctuate wildly. This provides the driver with a stable income allowing them to make future financial plans with a reasonable amount of confidence that their incomes will remain stable moving forward. The cab company is unlikely to flood the market with excessive cars/drivers as has been the case with UBer in several locations. The bottom line is that Uber does not live up to it’s claims and there is more money and more security driving for a legitimate, legal cab company.

Request your local Uber drivers in Tampa, Miami, Orlando, St. Petersburg, Clearwater, Sarasota, Jacksonville, Ocala, Naples, Gainesville, Tallahassee, Fort Lauderdale, Cape Coral  and ask how much money they really make......

10 comments:

  1. "It is also worth noting that Uber discourages tipping, and didn’t even include the tipping option in the app until very recently. That is because tipping doesn’t benefit Uber, and by not encouraging tipping the service appears more economical to the consumer."

    We don't have tipping options here in Florida, Uber even spreads word among customers, that TIPS ARE INCLUDED IN ALL THE FARES

    ReplyDelete
    Replies
    1. Could someone please explain to me how Uber's surge pricing works?
      This morning I was only car on the map (probably because of heavy rain) and
      the map was lit with orange color which is supposed to indicate high demand and surge price in effect for orange area. In this case the whole Pinellas county was orange yet I was paid regular rate of $1.20 / mile on the couple of calls I did in that area.
      Does anyone know why this happened and why I did not get the promised surge rate? Thanks

      Uber driver from Clearwater

      Delete
  2. That is interesting, when corporate greed meets uneducated mob, which can not be protected by labor laws or represented by crooked politicians

    ReplyDelete
  3. "..Uber drivers gathered outside of Uber’s Long Island City offices on Monday to protest the low fares.
    A group of Uber drivers, who say they number about a thousand, are attempting to organize a strike against the booming taxi company over complaints of falling fares and unfair working conditions.
    The drivers, who are mostly comprised of SUV and black car drivers, have planned a protest outside of the Long Island City Uber Office on Monday morning after refusing to drive for the service — and in some cases, switching to rival Lyft — Thursday, Friday and Saturday. This is the second protest the group, called Uber Drivers Network NYC, will be staging in a week against the company. ........."

    read more at

    http://www.buzzfeed.com/johanabhuiyan/uber-drivers-are-protesting#qedm7u

    ReplyDelete
  4. My first day driving for UBER and I feel like uber moron
    my first trip was a ride from Don Cesar, St Pete beach to tampa airport for $33.80 minus %20 , tip included with my own car, -after gas and car amortization , my net profit was around $16
    .....while flat rate cab fare, would be $54 + $10-15 tip ,
    $54 divided in 2 + $10 tip = $37 before gas,- after gas my net profit would be $30 and I would be using company car legally without any obligations

    ReplyDelete
  5. "$54 divided in 2 + $10 tip = $37 before gas,- after gas my net profit would be $30 and I would be using company car legally without any obligations "

    what that means $54 divided in 2 ?

    ReplyDelete
    Replies
    1. $54 it is a meter or flat rate which you have to share with cab company 50/50.
      tips are yours and you are also responsible for cost of gas

      Delete
  6. is uber and lyft legal in Tampa Bay?

    ReplyDelete
    Replies
    1. nope, uber and lyft are illegal in whole tampa bay, it could give you idea, what kind of company uber is, if it entices drivers to commit crimes against local jurisdiction.
      I found out about it, when I was charged with misdemeanor for violation of City ordinance in St Pete
      fuk uber

      ex- uber driver in St Pete Beach, FL

      Delete
  7. I still rather request Uber than take a cab, it usually costs me %30-%50 less than a taxi, on top of it, uber provides (in most cases) cleaner service, though, uber drivers are pretty much clueless and usually they don't know the area.

    ReplyDelete