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

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

#61

Post by savanaly »

Liquix wrote: post #18

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?

When you flip burgers you have to show up at predetermined times, no matter if you're having a bad day or something inconvenient comes up, have to wear a cheesy uniform and put on a smile, tolerate whatever coworkers you get thrown in with, and of course you are about as far from your own boss as it's humanly possible to be. It's totally plausible to me that the sum of avoiding these costs is equal to five bucks per hour.

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

#62

Post by ErikVandeWater »

kbenson wrote: post #52
derekp7 wrote: post #33

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,…

> see if anyone around me needs a ride going in that direction Do they allow you to set a destination area so that your fares are limited to this, or do you just get to review and accept fares so you can choose ones in the right direction? I wasn't aware it could be used to just pick up someone going the same direction. I can see something like that doing very well, but I can also see how Uber might want to brand it…

Drivers have the ability to set an end-destination so their last ride is near there ultimate destination.

Source: I asked an Uber driver about this a few months ago.

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

#63

Post by phkahler »

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...

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.

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

#64

Post by kbenson »

emodendroket wrote: post #34
ApolloFortyNine wrote: post #31

Earlier quoted context omitted.

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.

Presumably for a lot of people the thing they need to work around is not so much friends calling and wanting to meet as their primary jobs with irregular hours.

Or they have pre-existing appointments at certain times of the day (drop-off/pick-up kids at school or spouse at work if there's one car, etc). I wouldn't be so quick to assume what the flexible hours are often being used for, since it might be very different based on age group and location.

Work flexibility helps a lot of people in lots of different ways, which is why it's such a bit deal.

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

#65

Post by [deleted] »

monochromatic wrote: post #45
misterbishop wrote: post #41

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.

From the driver’s perspective, is there any difference?

[deleted]

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

#66

Post by csomar »

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.

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

#68

Post by saas_co_de »

ejstronge wrote: post #19
saas_co_de wrote: post #4

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 the…

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.

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-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.

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

#69

Post by facetube »

monochromatic wrote: post #45
misterbishop wrote: post #41

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.

From the driver’s perspective, is there any difference?

Yes: self-employment tax.

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

#70

Post by throwaway2048 »

toblender wrote: post #56
wyldfire wrote: post #9

Earlier quoted context omitted.

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).

Would you use the service if it was 3x more expensive?

imagine how cheap it would be if uber enslaved them, opportunity city.
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