Uber Math (Accounting)

Status
Not open for further replies.

Y_K

Joined
May 29, 2009
Messages
2,825
Location
WA (USA)
Stuff seen:

=================
John says

September 23, 2016 at 6:36 pm

READ THIS IF YOU REALLY WANT TO KNOW HOW MUCH $$$ YOU MAKE DRIVING
I have been driver for LYFT and UBER for 1 year and working full time for 9 months. I have completed over 2,200 rides. I have an accounting background and I lost my professional job. Out of desperation, I became a driver for UBER/LYFT. I keep precise records of all income and expense. The bottom line statistics are not at all promising to be a driver. I took precise mileage and earnings figures. For 9 months, I drove 41,291 miles, gross revenues before expenses and taxes were 0.61 cents/mile (including cash/non-cash tips). In my market, average gross revenue for UBER and LYFT is 0.80 cents/mile BEFORE 20% commission paid to UBER/LYFT. Of significance, my gross earnings per mile was 25% higher in 2015 ($1.00/mile), which means that average gross earnings per mile will be LESS in future periods. Thus, my findings at the end of this post are UNDERSTATED. Earnings include prime time and surge pricing. I worked more than full time for 6 months during all optimal times of the day (12+ hours/day, 5+ days/week).
0.61 cents/mile doesn’t sound bad, right? Well, not until you account for all costs. Actual total costs to drive a 2011 Nissan Altima was $11,829 or $0.29 cents/mile (including fuel, conservative depreciation, insurance, service, cell, and food giveaways. So, net earnings BEFORE taxes were ONLY $0.32 cents/mile. Notice the SHARE of income on a percentage basis is 51% (me) and 49% (them). This is because of the REAL expenses required to do this job reduce the share of gross earnings from 80% to 51%.
Let me break this down in terms we can all relate to. In order to earn $500/week (net of all expense & before taxes), you have drive 313 miles/day for 5 days/week. 313 miles can be driven in 5.2 hours assuming no stops, regular traffic, and an average speed of 60mph (or 21 rides completed at an avg. of 15 miles/ride). As you are well aware, it is impossible to complete 300+ miles in 5 hours because, of course, you have to make stops, wait for riders, deal with traffic, and determine your next destination. But, let’s say for the sake of argument you could. So, after adjusting for stop, wait, traffic, navigation (an additional & conservative –96 minutes), you have worked over 6 1/2 hours. This is at an average speed of 60mph! A more reasonable assumption would be an average speed of say, 35mph, which would translate to over 11 hours work/day. This translates to an hourly wage (before taxes) of $9.12 per HOUR! Let me also state that 1) I do NOT have commercial insurance, 2) these assumptions do NOT include an adjustment for accident risk, 3) this does NOT include any damage to your vehicle caused by riders, 4) the risk of injury or worse because of undesirable riders, and 5) you still have to pay taxes on any ‘net’ income. So, given these precise calculations, is it still worth it to drive for $9.12/hour BEFORE you pay taxes?
I know what you are thinking: you receive a direct deposit that is much larger than $9.12/hour, you receive referral bonuses that translate into more $$$ for you, and you think you are better than the average driver so you make more in tips than those ‘other’ losers. Well, have you actually sat down and accounted for all of your expenses? Let me share my personal experience: for 9 months I earned $1,569 in cash tips + 1,461 in LYFT inApp tips, BOTH of WHICH have been already accounted for. What I excluded from the calculation was what I view as “non-recurring” fees earned. Meaning, I believe that future earnings in this category will substantially lower or eliminated entirely. I made a total of $3,660 for 9 months for the following: 1) sign on bonus 2), driver referral for 1 person, and 3)passenger referral fees for over 125 NEW riders to LYFT. So, did you earn an average of over $100/week for referral/sign-on bonuses every week that you worked? That is what I earned. You have to ask yourself how much you have earned from these ‘non-recurring’ and NOT reliable sources of income. Including this non-recurring income, I earned an additional $0.09 cents/mile.
So, in the final analysis, I made an average of $0.40 cents/mile (including surge pricing, referral fees, tips) in net income, which assuming a 40 hour work week (this is understated) translates to $11.47 PER HOUR. This is BEFORE taxes and BEFORE any of the risk you take as a driver. Is it still worth it?
=================

from http://studenomics.com/earning-more/driving-for-uber/
 
Originally Posted By: Mr Nice
Get a real job with benefits....



Ed Zachary!

It was posted somewhere that these services for making money are similar to those payday loan companies.
Designed for those who are poor with finances and budgeting.

Another thing not mentioned (actually I didnt' read the whole post above) is the added stress of being a driver.
I've seen so many vids on youtube etc of passengers who were abusing the driver/car/both!

It's just a glamorized version of a taxi driver. If you can do it while your commuting to your regular job, then great!
But if you hope to make it your regular income, then your in for a sad surprise
 
My son got hit by a lyft passenger opening the door on the left. took off my sons mirror and put a little dent on the prius lyft. i got paid after a long time dealing with lyfts insurer.

the driver though hosed. lyfts deductable is $2500. ubers is 1k. So he has to pay to fix the door himself. i don't know if people that do ride sharing really do the math like this guy. i see plenty of them though.
 
“Uber Math” has always been a bit wierd.

I did UberLux in London for a while when it first started (Lux is like Black in the US) and it was ok till the Lyft and Uber went more towards Rideshare, which Uber has never been in the UK because it’s illegal. UberX in the UK are all normal Private Hire Drivers that are Licenced by the Local authority.
 
No surprise that Uber hasn't had its licence renewed in London, England. Questionable business practices and illegal contract terms for its drivers were some of the reasons.

Claud.
 
It is one of those new fangled ways of making a living that folks initially assume must be the way to go since it is smart phone technology driven.

There is a reason that mostly immigrant non-English speaking folks gravitated to the very low paying licensed cab driving jobs in New York City. The only reason is that they had difficulty obtaining higher paying work with better working conditions.

Uber and Lyft while more convenient for passengers did not substantially increase the amount passengers are paying, and thus its drivers should not expect to be paid much more than regular taxi drivers. I suspect that the taxi medallion and vehicle owners in NYC probably end up with about half of the revenue.
 
Originally Posted By: Claud
No surprise that Uber hasn't had its licence renewed in London, England. Questionable business practices and illegal contract terms for its drivers were some of the reasons.

Claud.



To be perfectly honest the way Uber treated their Drivers is actually better than the most in London.

Most people don’t realise that most Operators in London take the thick end of half of Account jobs. Much more than the 20/25% that Uber take

Since Uber arrived in London many Operators now take less from the Drivers, allow them flexible working.

For sure Uber fly close to the wind when it comes to laws and regulators, but they are not responsible for Licencing the incompetents that TFL have over the last few years.

And ones of the biggest anti Uber voices belongs to a Union person that has a commercial interest in an Uber competitor.

Yamuv

Interestingly at launch in Leeds Yamuv rates were less than UberX.

And unless the rest lf the industry says they will boycott all ex Uber Drivers then any comments about the quality of Uber Drivers was also a lot of hot air.

Uber used Social Media to its commercial advantage, now its competitors are doing the same.

And Uber has not had their London Op Lic cancelled, they said they wouldn’t renew it, subject to Appeal. Uber have Appealed, which means they are still Licenced till the legal process has been completed.

The same process has been carried out many time since before for some very large London PH Operators. And it will happen again.


The reason I, and all the UberLux Drivers I know, stopped working on the platform is because the quality of the passengers is horrendous. If I want to pick up drunken rude idiots I would not drive a Jag or Merc I would drive a Ford Galaxy.

Uber London Management were told by me and many others to keep up standards by properly vetting Drivers, bit US based Management wanted growth, growth growth.

All their problems are of their own making.

Uber is actually very popular in Accra, Ghana. Why? Because the way the App works stops Driver ripping people off.
 
Last edited:
I worked for a college student painting service one summer and the brochure from the franchisor bragged up on how you could make so much money per hour if you worked really hard!
All that meant was that you were paid a flat rate for the job, and, of course, the franchisee tended to underestimate things as far as his workers were concerned (I would guess that the building owners saw different numbers). Factoring in transportation costs (sometimes to multiple sites per day), wear and tear on clothing, and the fact that we had to provide our own brushes and scrapers, I didn't make a lot of money.
I talked to the franchisee, who was a fairly decent guy, on my last day and asked him if the whole enterprise was worthwhile for him. He told me that he had recovered his costs by the end of the summer and any work he could squeeze in the last few weeks before his school started and on weekends before winter using his painters who were going to school locally would be his profit (his costs included buying a junky pickup to haul supplies for the jobs, so I guess he could also sell that). I asked him if he was going to do it again next summer and he kind of smirked and said only if he couldn't find anything else to do.
 
Originally Posted By: Mr Nice
A part time job a Walmart, Home Depot or Publix would be better than Uber or Lyft.


This.

If you do the math like this guy in the OP did, it doesn't work out. I know a guy who does it on the side and he makes trips back and forth to NYC for a few extra bucks. That's fine, but I wouldn't rely on Uber as a full-time thing.

Also, having worked in auto insurance previously, accidents involving Uber drivers were always a huge nightmare to deal with. They never had commercial insurance, and a lot of them were denied. Many knew this, and would try to fabricate stories so they wouldn't have to pay, and it led to a longer claim investigation.
 
Originally Posted By: Mr Nice
A part time job a Walmart, Home Depot or Publix would be better than Uber or Lyft.


Except that a job at any one of those equates to no sick leave and minimal flexibility. Get sick? If you don't show don't bother coming next shift.

These driving jobs in theory are true ad hoc jobs to easily earn some extra bucks on a random schedule. Not to be fixed to some corporate demands.

Some of the Uber practices are questionable, but as an Uber user, I've also saved hundreds of dollars per year in fares to the airport and train station, while driving in far nicer and cleaner cars.

I don't particularly care if a driver nets a minuscule amount per mile. They don't have to driveuber. And if prices go up or something is conpromised, one can always go back to taxis.

Sometimes people can't have their cake and eat it too.
 
It'd be interesting to see more of the car costs. My guess is that a driver needs to have a car that's at least 3-4 years old with 80-100k+ miles. Then if they put on 40-50k a year, the depreciation has already kicked in and they can probably keep it going for 300-500k. I think that was one of the things with the crown vics, in taxi service they could hit that kind of mileage.
 
Originally Posted By: JHZR2

Some of the Uber practices are questionable, but as an Uber user, I've also saved hundreds of dollars per year in fares to the airport and train station, while driving in far nicer and cleaner cars.


You have nailed the reason why it is a low paying job. As riders, not our problem as these folks choose to drive.
 
Originally Posted By: Mr Nice
I still don't understand why people are willing to work for peanuts and take on 100% risk..... ?



IMO, it's the flexibility. No clock to punch, no boss to yell at you, no corporate work structure etc.
It's like starting your own franchise, but without all the hassle
 
I've done a bit of UberEats in the past around Marin here. Done it in a 99 Suburban, 99 Crown Vic, and 02 Envoy. Why? Well, those vehicles were too old for UberPeople (well, UberX, but you know what I mean)... That was a fun way to make a few extra bucks here and there, and I even brought friends along sometimes for entertainment. However, the problem with UberEats is you have to find parking, go to the restaurant, often wait for the food, find the customer's place, park again, deliver it, and very few tips. So basically less than minimum wage, and of course all those vehicles are gas guzzlers. Good for a few hours here and there but honestly it would have been better staying an extra hour or two at my "real" job at the auto parts store or coming in on my day off... Oh and they don't pay the distance between when you accept ping and the restaurant, only the distance between the restaurant and customer. It happened a lot that I would drive more miles to the restaurant than to the customer... I remember one time I drove like 10 miles to the restaurant and two blocks to the customer, but the customer tipped $5 so it was all good. That was one of the few tips I got and one of the biggest ones. Just for comparison, I make more in tips at the auto parts store than I did for UberEats.

Now I'm going to try to do real Uber with the $1000 Escape after I spend $300 on a replacement drivers side rear door since it has a big dent and some seat covers because while the seats are actually very clean it has typical Ford Escape water spots on the seats and it looks dirty so people won't like it. Three of my tires are pretty old, one was replaced because it was damaged in the accident that caused the dent in the door, hopefully it still passes their inspection. The first money I make from Uber I'll use to buy new tires. Now, I would never do that as a full-time job but if I'm not at work and don't have any work on my side job (web design) I can log in an drive around for a few hours to make a few extra bucks.

Of course, if you get in an accident, you're screwed.
 
Last edited:
Status
Not open for further replies.
Back
Top