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Uber’s subprime leases put drivers on road, but leave some shackled

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Re: Uber’s subprime leases put drivers on road, but leave some shackled

#51

Post by warfangle »

Bartweiss wrote: post #38
warfangle wrote: post #37

Earlier quoted context omitted.

Average city driving speed for LA is 26.8 MPH [0], which means she's driving around 750 miles per week. She leased a 2015 Honda Civic, which has a rated fuel economy of 31 MPG. Assuming she gets the rated gas mileage from her civic, she's buying 24 gallons of gasoline per week for 2.39 [1] per, costing her $57. AAA gives an estimated 5.51 cents per mile for maintenance and tires [2], costing her $41. So, take home pa…

This is mostly a good assessment, but the maintenance cost should be reduced - one part of Uber's lending program is covered routine maintenance. Gas at least should be deductible, I don't know whether the car payments can be counted in whole or in part. The overall point is well taken, though. There are several hits to real income for Uber drivers that aren't shared by other types of low-wage worker, and while "set…

I don't think it matters if the car payments can be counted or not.

But, according to [0] (I'm not sure how accurate/reputable it is; again, IANAA), the deductible portion of $60452=$31,408 is only $2,218.90.

Gas at $5752=$2,964 already extends past that cap.

Assuming her income is taxed before the lease payments are made, and hits her full deductible, she's paying total taxes of $4,437.81

So, net after-tax, after-expense income - I didn't realize that about routine maintenance - is $604-$160-($57 - ($2,218.90/52)) - ($4,437.81/52) = $344 / wk, or $13/hr.

Compared to working multiple inflexibly-houred minimum wage jobs, it's definitely better.

But in no way is it lucrative, or even lower middle class.

Re: Uber’s subprime leases put drivers on road, but leave some shackled

#52

Post by russell_h »

Bartweiss wrote: post #43
mslate wrote: post #41

Earlier quoted context omitted.

What about gas? What about fees from traffic infractions? What about accidents? While accidents may be low probability, they present a very high expected cost and the areas in which ride-sharing is popular probably have higher rates of accidents. I'm just saying that this is probably not the full arithmetic for arriving at an ~$16/hr wage.

It's not, and the rest of this thread dives into it a bunch. Gas and tire wear implies a ~$2/hour hit, roughly. Tickets are presumably negligible for long-term drivers? Most people get Accidents are hard to call - their 'cost' is basically whatever you pay in insurance (plus some adjustment for future insurance hikes if you file a claim). I don't know how the Uber-insurance thing shook out, so I can't speak to that a…

I get the sense that Uber drivers are often incentivized to do things that increase their chances of getting a ticket. Then a full time driver spends a lot more time driving than your average person.

Re: Uber’s subprime leases put drivers on road, but leave some shackled

#53

Post by tyingq »

warfangle wrote: post #37
tyingq wrote: post #32

Earlier quoted context omitted.

I agree with most of this, but it should be noted that $16/hour as 1099 income is not at all the same thing as $16/hour as a regular W2 employee. A rough equivalent would be about $11/hour. I think that's high still, as there are costs other than maintenance...like gasoline.

Average city driving speed for LA is 26.8 MPH [0], which means she's driving around 750 miles per week. She leased a 2015 Honda Civic, which has a rated fuel economy of 31 MPG. Assuming she gets the rated gas mileage from her civic, she's buying 24 gallons of gasoline per week for 2.39 [1] per, costing her $57. AAA gives an estimated 5.51 cents per mile for maintenance and tires [2], costing her $41. So, take home pa…

Great breakdown. Again, though, that's $12.30/hr as 1099 income, subject to self employment taxes,...and no sick days, paid holidays, vacation, unemployment coverage, insurance, etc.

Re: Uber’s subprime leases put drivers on road, but leave some shackled

#54

Post by toomuchtodo »

Bartweiss wrote: post #28
bko wrote: post #26

Subprime lending == bad Extending credit to lower-income borrowers == good Are we just talking about price (interest) here? You may not like the price, but prices exist for a reason and cannot be changed by diktat. Who gets prime vs a subprime lease isn't determined by some ethnicity or the religious sect someone belongs in. It's determined by the risk and size of the loan. Smaller loans have relatively higher fixed…

> What's the alternative? Stop extending credit to risky borrowers? Force lenders to lend to risky borrowers at subsidized rates funded by tax dollars or through coercion? This seems to be a lot of people's answer. There's this weird claim that payday loans and bad car loans and similar are caused by "greed!" when the companies making them are operating at tiny profit margins. High default rates dictate high prices (…

> There's this weird claim that payday loans and bad car loans and similar are caused by "greed!" when the companies making them are operating at tiny profit margins. High default rates dictate high prices (which forms a vicious cycle, but that can only be broken from the outside).

You don't need payday loans when your government provides proper social safety nets, and labor regulations that allow you to earn a living wage.

Payday loans are simply a symptom of the problem.

Re: Uber’s subprime leases put drivers on road, but leave some shackled

#55

Post by ob »

Bartweiss wrote: post #29

> She drives about 25 hours a week. In one week in May, she earned $604 for 28 hours of work, she said — a slightly better-than-average week. Uber took $160 for the car directly out of her paycheck, leaving her with $444. So, for 28 hours of work, the driver got a car (with maintenance covered) and a ~$16/hour salary on top. Without the car payment, it's a $21/hour salary. That's apparently a near-average week. I see…

> In one week in May, she earned $604 for 28 hours of work

I wonder if they count "hours of work" as hours with a passenger or as total hours driven. If the latter then she actually "worked" longer hours.

Re: Uber’s subprime leases put drivers on road, but leave some shackled

#56

Post by alphast0rm »

tyingq wrote: post #53
warfangle wrote: post #37

Earlier quoted context omitted.

Average city driving speed for LA is 26.8 MPH [0], which means she's driving around 750 miles per week. She leased a 2015 Honda Civic, which has a rated fuel economy of 31 MPG. Assuming she gets the rated gas mileage from her civic, she's buying 24 gallons of gasoline per week for 2.39 [1] per, costing her $57. AAA gives an estimated 5.51 cents per mile for maintenance and tires [2], costing her $41. So, take home pa…

Great breakdown. Again, though, that's $12.30/hr as 1099 income, subject to self employment taxes,...and no sick days, paid holidays, vacation, unemployment coverage, insurance, etc.

> ...and no sick days, paid holidays, vacation

That's not really true - one of the big advantages of driving for Uber is you set your own hours, so you can take time off whenever you would like.

Re: Uber’s subprime leases put drivers on road, but leave some shackled

#57

Post by chinathrow »

alphast0rm wrote: post #56
tyingq wrote: post #53

Earlier quoted context omitted.

Great breakdown. Again, though, that's $12.30/hr as 1099 income, subject to self employment taxes,...and no sick days, paid holidays, vacation, unemployment coverage, insurance, etc.

> ...and no sick days, paid holidays, vacation That's not really true - one of the big advantages of driving for Uber is you set your own hours, so you can take time off whenever you would like.

No, that would be "unpaid time off".

Re: Uber’s subprime leases put drivers on road, but leave some shackled

#58

Post by devindotcom »

alphast0rm wrote: post #56
tyingq wrote: post #53

Earlier quoted context omitted.

Great breakdown. Again, though, that's $12.30/hr as 1099 income, subject to self employment taxes,...and no sick days, paid holidays, vacation, unemployment coverage, insurance, etc.

> ...and no sick days, paid holidays, vacation That's not really true - one of the big advantages of driving for Uber is you set your own hours, so you can take time off whenever you would like.

big difference between paid time off and just not working

Re: Uber’s subprime leases put drivers on road, but leave some shackled

#59

Post by pfarnsworth »

tyingq wrote: post #53
warfangle wrote: post #37

Earlier quoted context omitted.

Average city driving speed for LA is 26.8 MPH [0], which means she's driving around 750 miles per week. She leased a 2015 Honda Civic, which has a rated fuel economy of 31 MPG. Assuming she gets the rated gas mileage from her civic, she's buying 24 gallons of gasoline per week for 2.39 [1] per, costing her $57. AAA gives an estimated 5.51 cents per mile for maintenance and tires [2], costing her $41. So, take home pa…

Great breakdown. Again, though, that's $12.30/hr as 1099 income, subject to self employment taxes,...and no sick days, paid holidays, vacation, unemployment coverage, insurance, etc.

You realize that the people that demographics of people who like to drive for Uber are those coming from minimum wage jobs, who have none of the above either. Most drivers I talk with love Uber because their pay almost instantly doubles and they have freedom to work as much as they want.

Re: Uber’s subprime leases put drivers on road, but leave some shackled

#60

Post by pc86 »

warfangle wrote: post #51
Bartweiss wrote: post #38

Earlier quoted context omitted.

This is mostly a good assessment, but the maintenance cost should be reduced - one part of Uber's lending program is covered routine maintenance. Gas at least should be deductible, I don't know whether the car payments can be counted in whole or in part. The overall point is well taken, though. There are several hits to real income for Uber drivers that aren't shared by other types of low-wage worker, and while "set…

I don't think it matters if the car payments can be counted or not. But, according to [0] (I'm not sure how accurate/reputable it is; again, IANAA), the deductible portion of $604 52=$31,408 is only $2,218.90. Gas at $57 52=$2,964 already extends past that cap. Assuming her income is taxed before the lease payments are made, and hits her full deductible, she's paying total taxes of $4,437.81 So, net after-tax, after-…

In most of the country $13/hr is indeed lower middle class.
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