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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

#191

Post by antisthenes »

csomar wrote: post #66

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…

There was an interesting observation on the road a few years back.

I saw a Dominos delivery driver in a high end Jaguar. I can only presume it was a young person borrowing their parents' car to do deliveries as their summer job or whatnot. It was amusing to me (having an economics background), because I couldn't figure out what the lesson was being taught here.

Doing some back of napkin math, there was absolutely no way for this kid to generate enough money to make up for the cost of operating this car in a suburban neighborhood. Between the high maintenance cost and the low gas mileage of a luxury car, he was losing money every minute that the jag was being operated (barring, of course, some insane tips for big orders).

As far as real estate: yes, it doesn't take a financial genius to realize that renting income after all expenses is far lower than most people estimate and net profit hovers around $0-100 in vast majority of even profitable cases. Besides, you aren't the first person to think about investing in RE, so all the economic profit is generally already priced into the value of land, so you won't be able to get a bargain.

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

#192

Post by sokoloff »

s73v3r_ wrote: post #143
regulation_d wrote: post #111

Earlier quoted context omitted.

Let’s say I’m a dry wall contractor. A general contractor comes along and offers me $20k for a job. I say “$25k?” and he says, “No, $20k.” If I take the job I am not magically transformed into an employee of his, simply because I lacked the bargaining power to negotiate the rate. The reason I am still a contractor is that I have absolute control over whether to agree to do that job at that price. There are obviously…

Except Uber & Lyft will punish you if you turn down too many jobs. That doesn't sound like absolute control. And you never got the opportunity to try and negotiate with either company to start with.

A subcontractor who consistently turned down construction work would also be deprioritized by a general contractor.

Because Uber, Lyft, and others periodically offer different incentives in the market, I could make a case that by deciding to sign up on a specific day or respond to a specific offer, you had a chance to accept or decline the company's offer. There's nothing stopping you from reaching out to Uber or Lyft corporate and trying to negotiate your rate. I predict you won't succeed, anymore than the drywall contractor example upthread.

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

#193

Post by hunter2_ »

s73v3r_ wrote: post #143
regulation_d wrote: post #111

Earlier quoted context omitted.

Let’s say I’m a dry wall contractor. A general contractor comes along and offers me $20k for a job. I say “$25k?” and he says, “No, $20k.” If I take the job I am not magically transformed into an employee of his, simply because I lacked the bargaining power to negotiate the rate. The reason I am still a contractor is that I have absolute control over whether to agree to do that job at that price. There are obviously…

Except Uber & Lyft will punish you if you turn down too many jobs. That doesn't sound like absolute control. And you never got the opportunity to try and negotiate with either company to start with.

Devil's advocate: Maybe it's not each fare that's a job, but each driving session. Uber offering you a particular job is them giving you the "start driving" button, and you are free to not click it.

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

#194

Post by sokoloff »

trsse wrote: post #187
Someone wrote: post #153

Earlier quoted context omitted.

“Uber Driver” isn’t a job (in the USA; some other countries disagree); you’re a contractor, and you’re free to find customers via other means (e.g. via Lyft, paying their margins, via word-of-mouth, via your own web site, etc.) Yes, that may be hard or effectively impossible, but a bad dry wall contractor will not be able to hold his business afloat, either.

> you’re free to find customers via other means Except you aren't. In many cities it is illegal to just start taking passengers for fees.

Some argue that it's illegal in many cities to just start taking Uber passengers as well.

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

#195

Post by martin_bech »

bufferoverflow wrote: post #44
martin_bech wrote: post #38

3 problems. 1. This is at subsidised Uber pricing, where Uber is loosing money at an alarming rate. 2. This means driving for Uber is terrible economicly. 3. This also implies that even getting to driverless cars, Uber will only save 3.37 per hour, not making the business model viable, I would think.

The third point is definitely wrong. Once you have a fleet of driverless cars, you can optimize their routes to perfection, have almost zero down time, so you would need fewer cars in general. And less liability.

I dont think thats correct. I dont think you could optimize routes, meaningfully more, that would require, some kind of prediction, of upcomming drives. Its not impossible, but not something that will save heaps of money. And there will be downtime, because rides will follow some kind of pattern during the day. When people are at work, there will be way less demand, when people are going to work, there will be way more demand etc. right now thats kind of offset, by Uber not owning the cars, and not paying for idle drivers.

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

#196

Post by hunter2_ »

pfortuny wrote: post #117
regulation_d wrote: post #111

Earlier quoted context omitted.

Let’s say I’m a dry wall contractor. A general contractor comes along and offers me $20k for a job. I say “$25k?” and he says, “No, $20k.” If I take the job I am not magically transformed into an employee of his, simply because I lacked the bargaining power to negotiate the rate. The reason I am still a contractor is that I have absolute control over whether to agree to do that job at that price. There are obviously…

MMmmmh, but you do not lose your job as a dry wall contractor. You lose your “uber driver” job if you do not accept uber’s fares. What am I missing?

Devil's advocate: Taking the drywall job is akin to clicking the "start driving" button. Once you do either of those things (which you are entirely free to not do on a particular day with no penalty), at that point there is an agreement to try and not skip a wall here and there.

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

#197

Post by sokoloff »

antisthenes wrote: post #191
csomar wrote: post #66

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…

There was an interesting observation on the road a few years back. I saw a Dominos delivery driver in a high end Jaguar. I can only presume it was a young person borrowing their parents' car to do deliveries as their summer job or whatnot. It was amusing to me (having an economics background), because I couldn't figure out what the lesson was being taught here. Doing some back of napkin math, there was absolutely no…

> I couldn't figure out what the lesson was being taught here.

I can easily see myself setting my kids up with something like that to teach them the value of time, structure, and work. It's no different to me than buying them a chemistry set, an Arduino, or making baking soda/vinegar volcanoes with them. I can even work through the math with them to show them that what they did was more expensive than me just handing them $5000 and telling them to watch TV all summer to save wear and tear on the car.

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

#198

Post by [deleted] »

trsse wrote: post #187
Someone wrote: post #153

Earlier quoted context omitted.

“Uber Driver” isn’t a job (in the USA; some other countries disagree); you’re a contractor, and you’re free to find customers via other means (e.g. via Lyft, paying their margins, via word-of-mouth, via your own web site, etc.) Yes, that may be hard or effectively impossible, but a bad dry wall contractor will not be able to hold his business afloat, either.

> you’re free to find customers via other means Except you aren't. In many cities it is illegal to just start taking passengers for fees.

[deleted]

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

#199

Post by eddieplan9 »

ghaff wrote: post #183
eddieplan9 wrote: post #173

It's important to not use the IRS Mileage Rate to calculate real cost. (The linked study does not.) The IRS rate is designed for the worst case scenario for the purpose of tax filing (coz you don't want to penalize someone who has to drive a F-150 in a high-gas-price state in a year where gas price spikes to $5/gallon). Even if we don't consider the fact that the cost of vehicle depreciation, maintenance and insuranc…

The paper actually uses a $0.30/mile figure. "A Median driver generates $0.59 per mile of driving, and incurs costs of $0.30 per mile." The paper actually seems to be trying to make the point that Uber drivers are gaming the tax system because their actual costs are lower than the IRS allowance. $0.30 seems like a fairly reasonable number and it also matches up well with renting a car that's intended to be driven for…

Thanks for pointing out my mistake. You are right. I edited my comment.

To be fair, if the point is to compare profit, then we also need to consider that a traditional worker making minimum wage also needs to commute to work. The average commute of a worker is 30 miles round trip [1]. The cost of that will eat into their earning as well and cannot be deducted from their taxes.

[1] https://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/pu...

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

#200

Post by user5994461 »

metalliqaz wrote: post #161
ghshephard wrote: post #151

Earlier quoted context omitted.

That is entirely dependent on where you live and the quality of the Taxis. For example, in the London and Singapore, Taxis are awesome. In California, (particularly in the Bay area) - Taxis are horrible beyond belief. The cars are unsafe and uncomfortable, the drivers are terrible and lack knowledge. It's often the case that I will come out of a peninsula hotel (Say, San Mateo) and see a queue of taxis waiting to pic…

In front of that hotel in San Mateo, are the Uber customers chasing a better experience, or a better deal?

Both.
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