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

seattletimes.com

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

#71

Post by dragonwriter »

ob wrote: post #55
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.

> 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.

Even if its "hours with a passenger" its still too short; it really should be "hours in which other activities were foregone so that she could be logged in and ready to accept passengers".

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

#72

Post by untog »

pc86 wrote: post #60
warfangle wrote: post #51

Earlier quoted context omitted.

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.

We are specifically talking about Seattle here, though. All the other variables would also be different in different parts of the country.

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

#73

Post by dragonwriter »

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…

> So I'll stand by a claim that the money is pretty good, at least in But the whole calculation of the money was based on the earnings of one driver in LA, which isn't a (And, after taking the employer-equivalent share of self-employment taxes into account, the pay is barely above the equivalent of a $10/hour employee wage.)

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

#74

Post by dragonwriter »

dsfyu404ed wrote: post #50
AJ007 wrote: post #46

Earlier quoted context omitted.

A few disconnected thoughts: It is worth noting that without the current low interest rate environment, subprime loans would be a lot more expensive or just wouldn't not exist. There certainly is a balance of responsibilities both among the borrower and the lender. Presumably the lender is the most educated of the two parties, especially in a sub prime situation where the borrower may not even be at a high school mat…

"Most young people now see what a catastrophe that can cause in the case of student loans, a whole generation or two facing a very grim financial future short of massive inflation or winning the lottery." The problem with student loans is that you can't bankruptcy them out of existence.

> The problem with student loans is that you can't bankruptcy them out of existence.

This is a pervasive myth, but, while they are harder to discharge than most other unsecured debt, they can be discharged in bankruptcy.

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

#75

Post by rayiner »

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…

Tax deductibility doesn't matter much when you're making under $20k because your marginal rate is so low.

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

#76

Post by dragonwriter »

untog wrote: post #72
pc86 wrote: post #60

Earlier quoted context omitted.

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

We are specifically talking about Seattle here, though. All the other variables would also be different in different parts of the country.

> We are specifically talking about Seattle here, though.

The newspaper is from Seattle, but the driver featured in the article whose numbers were used for the calculations in this thread was actually in Los Angeles.

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

#77

Post by untog »

dragonwriter wrote: post #76
untog wrote: post #72

Earlier quoted context omitted.

We are specifically talking about Seattle here, though. All the other variables would also be different in different parts of the country.

> We are specifically talking about Seattle here, though. The newspaper is from Seattle, but the driver featured in the article whose numbers were used for the calculations in this thread was actually in Los Angeles.

Ah, I stand corrected! But either way, things like car payments, insurance vary widely by geography, so it doesn't seem like applying this particular situation nationwide would prove much.

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

#78

Post by dragonwriter »

cpncrunch wrote: post #70
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.

>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. Not quite. You only take off some of the employment taxes, not the income taxes (which you would still have to pay as a regular W2 employee). It will likely only be about a dollar an hour or so. However the advantage of being self-employed is that you can dedu…

> However the advantage of being self-employed is that you can deduct expenses such as fuel.

No, its not. If those expenses aren't reimbursed by your employer (which often they are), you can deduct them as a W-2 employee, as well, so there is no benefit on that point to being a 1099 contractor vs. a W-2 employee.

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

#79

Post by pfarnsworth »

dragonwriter wrote: post #69
pfarnsworth wrote: post #59

Earlier quoted context omitted.

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.

> > 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. After deducting the portion of SE taxes equivalent to the employer share of payroll taxes (which isn't counted in employee wages), the wage is equivalent to $10.43/hr, which is…

Except that your original number is based on 28 hrs work not 40 hrs. And many people who make minimum wage, especially those that choose to be drivers, aren't full-time, and they don't receive any benefits.

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

#80

Post by toomuchtodo »

dragonwriter wrote: post #78
cpncrunch wrote: post #70

Earlier quoted context omitted.

>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. Not quite. You only take off some of the employment taxes, not the income taxes (which you would still have to pay as a regular W2 employee). It will likely only be about a dollar an hour or so. However the advantage of being self-employed is that you can dedu…

> However the advantage of being self-employed is that you can deduct expenses such as fuel. No, its not. If those expenses aren't reimbursed by your employer (which often they are), you can deduct them as a W-2 employee, as well, so there is no benefit on that point to being a 1099 contractor vs. a W-2 employee.

You can only deduct those expenses as a W-2 employee if you itemize vs taking the standard deduction. Most people don't itemize.
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