Customers love Rideshare, especially since 2015 when Uber dropped its rates by half to 85 cents/mile.
Now, some drivers enthusiastic with the old rates traded in their old cars for new ones. With monthly payments and higher insurance, they either had to drive more hours or have their cars repossessed.
So, there is your driver bending over backwards to get that 5-Star rating (below 4.6 and he gets fired), but how much is he really making?
Using figures from September, 2017 (Uber only became ‘legal’ in New Mexico March of 2016), I drove about 60 hours and was paid $1264.36. Uber didn’t add a tipping option until August, but I make a little more than most drivers as I can accept Uber XL requests, which pays 3X that of Uber X. However, they are only a small fraction of requests.
So, on its face I made $21/hour.
Subtract $362 in gas, and I am down to $15/hour.
However, what about ‘real’ deductions such as mileage depreciation, brakes, tires, oil, and ‘gap’ insurance (Uber’s insurance has holes in it, and your personal auto insurer requires a supplemental Commercial policy, for me about $100/month. [Full comprehensive as Uber Insurance has a $2500 deductible.]
That is $1264-$362 and in addition minus $414 for average maintenance costs and 7 cents/mile depreciation in resale. Now I am at $8/hour, less than minimum wage!
An Uber X driver proudly showed off his $1100 paycheck from Uber, which he made over 87 hours. However, once applying deductions . . . his depreciation at 5 cents/mile, he only made $6.60/hour. That is way less than minimum wage.
How about using the Federal Standard Mileage Deduction on your 1040?
In my case, for the month of September, I show a loss of $97. My estimate for 2017 is a net profit of $2000, or $2.75/hour . . . but that includes tips and some really big XL runs that paid out $1.43/mile compared to Uber X’s 63 cents.
$2.75 per hour . . . luckily, thanks to low maintenance costs and having a vehicle that holds resale value (top-of-the-line Ford Expedition) I actually made about minimum wage . . . and tips were less than 5% of the total fares . . . tips would really make a big difference, but from its beginning, Uber discouraged tipping.
In fact, they hid the ‘tipping option’ on the Rating Page. Only 1 in 4 passengers bother to take the time to ‘rate’ the driver, so . . . about 1 in 20 Uber customers bother to tip.
Why should they? With about 200 drivers using the Uber app, they will probably never see that driver again.
What about Lyft? Lyft ‘fired’ me for refusing calls so far away I had to burn a gallon of gas just to make the pickup. At an average income of $7/ride, the $2.75/gallon expense didn’t make economic sense . . . and most riders don’t tip, which would really help with the gas folks . . .
Lyft ordered me to pick up the rides, even if I lost money doing it. I refused, so they ‘deactivated’ me.
What do you think about that?