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For Uber Drivers, the Key to Making More Money Could Be a Used Toyota Prius

Michael - Cleveland

Well-Known Member
Moderator
For Uber Drivers, the Key to Making More Money Could Be a Used Toyota Prius
Barron's By Al Root Sept 19, 2019

It’s tough to make money as an Uber or Lyft driver, according to the automotive team at Wolfe Research.

They have crunched a lot of ride sharing numbers, and say drivers could do a little better if they could get the cost of car ownership and operation lower. One solution: Buy a Toyota Prius (or another hybrid vehicle).

Uber (ticker: UBER) and Lyft (LYFT) aren’t profitable yet. Wall Street expects Uber to lose about $1.4 billion in the 2019 third quarter. The Street expects Lyft to lose about $330 million over that time frame. One reason is that the cost of catching an Uber or Lyft is about $1.90 a mile, and about 75% of that, or $1.40, goes to drivers.

That may sound like a lot at first, but Wolfe’s math demonstrates how tough it is for drivers to earn a living.

According to Wolfe, personal car ownership costs 50 to 60 cents a mile for ride-sharing drivers. So if they get $1.40 a mile then, by simple math, they net about 85 cents a mile.

According to that math, drivers would need to drive about 38,000 miles—with paying fares in cars—each year to earn the U.S. median income of about $32,000. Assuming you drive five days a week and take two weeks off a year, drivers would need to drive about 150 revenue-generating miles a day—roughly the distance form Manhattan to Springfield, Massachusetts.

And don’t forget up to half of a driver’s time is spent searching for a fee-paying ride, and the average trip is only about five to 6 miles, according to Wedbush analyst Dan Ives.

The situation might not be quite as dire as that, though, at least according to Wolfe analyst Dan Galves: “The cost per mile drops for as the number of miles increases.”

Nonetheless, getting the cost of operation down is critical for drivers. Electric vehicles or hybrid cars could help. While they cost more than gasoline-powered models at the dealership, they get much better mileage. “Electric vehicles make sense in higher-use settings,” say Galves. The gas savings grows the more you drive an electric car.

EVs are more expensive because batteries are costly, but buying used ones can lessen the pain. A 2015 Toyota (TM) Prius in good condition—that gets 50 miles a gallon—can be had for less than $14,000, according to Kelly Blue Book. Driving a high-mileage, used hybrid can be an effective way for ride-hailing drivers to spend less on vehicle operations.

Of course, this is just fun with numbers. The quality of life for ride-hailing drivers, however, has become a serious political issue lately. California just passed a law which designates gig-economy workers as employees and not contractors, potentially raising costs for Uber and Lyft.

“It’s a clear financial negative,” wrote Ives in a Sept. 11 research report. But “we fully expect gig economy companies to continue to push back and find a middle ground, but it’s unclear if and how much they will start paying in the interim period.”

Uber is already pushing back—it has pointed out it offers some employee benefits and 45% of Uber drivers drive less than 10 hours a week. The company didn't comment for this article, but instead pointed us to past comments. Meanwhile, almost 90% of Lyft drivers drive less than 20 hours a week and have other jobs.

Lyft provided the following statement:

“We agree with Governor Newsom that California still has an opportunity to support the overwhelming majority of ride-share drivers who want a thoughtful solution that balances flexibility with earnings guarantees and protections. We are confident that with his leadership we can reach a historic agreement, but if necessary we are prepared to take this issue to the voters to preserve the freedom and access drivers and passengers want.”

There is another issue that potentially affects ride-hailing drivers even more: Many investors believe the pathway to profits for Uber and Lyft involves cutting drivers out of the equation completely. Galves does believe robo-taxis will lower costs, but notes they could be a couple of years away.

Before that happens, there is still a pathway to profitability for Uber and Lyft without eliminating drivers, according to the analyst, as long as the companies price effectively. “There was a period of intense price competition as Uber and Lyft grew their platforms,” says Galves, who rates Uber shares the equivalent of Hold and Lyft stock at Sell. With the two firms maturing, the level of price competition is falling.

Better pricing mean higher value for drivers, too. With higher prices and lower costs, maybe the economics of ride-hailing for drivers can improve.
 

losiglow

Well-Known Member
For sure. Didn't read the whole article but anything to reduce overhead is good :thumbup:

I enjoy driving a car that's a bit more fun and comfortable. That costs me more in overhead. But it's worth the added cost for me. And Select rides make up for some of that. I couldn't drive a Prius around for more than a couple hours before I went crazy. Props to you that can.
 

Michael - Cleveland

Well-Known Member
Moderator
  • Thread Starter Thread Starter
  • #3
lol... if you haven't owned a Prius, it's hard to believe just how much 'fun' and comfortable they are.
(when I need/want, I can blow most cars away from a standstill by putting my Prius into 'power mode'.)
And for me, there's nothing more fun than racking up $100 in earnings in 2-3 hours for 1 gallon of gas. :smiles:

I have two used Priusssss...
- a 2007 I paid $500 for (and put $1,000 in to it with a refurbed hybrid battery)
- a 2012 I paid $4,100 for (and had to do nothing to it).

Both get around 48-50 MPG.
Both are high mileage cars that I bought with over 150,000 miles on them
- and I've put over 25,000 miles on each, since)
 

TheDevilisaParttimer

Well-Known Member
For Uber Drivers, the Key to Making More Money Could Be a Used Toyota Prius
Barron's By Al Root Sept 19, 2019

It’s tough to make money as an Uber or Lyft driver, according to the automotive team at Wolfe Research.

They have crunched a lot of ride sharing numbers, and say drivers could do a little better if they could get the cost of car ownership and operation lower. One solution: Buy a Toyota Prius (or another hybrid vehicle).

Uber (ticker: UBER) and Lyft (LYFT) aren’t profitable yet. Wall Street expects Uber to lose about $1.4 billion in the 2019 third quarter. The Street expects Lyft to lose about $330 million over that time frame. One reason is that the cost of catching an Uber or Lyft is about $1.90 a mile, and about 75% of that, or $1.40, goes to drivers.

That may sound like a lot at first, but Wolfe’s math demonstrates how tough it is for drivers to earn a living.

According to Wolfe, personal car ownership costs 50 to 60 cents a mile for ride-sharing drivers. So if they get $1.40 a mile then, by simple math, they net about 85 cents a mile.

According to that math, drivers would need to drive about 38,000 miles—with paying fares in cars—each year to earn the U.S. median income of about $32,000. Assuming you drive five days a week and take two weeks off a year, drivers would need to drive about 150 revenue-generating miles a day—roughly the distance form Manhattan to Springfield, Massachusetts.

And don’t forget up to half of a driver’s time is spent searching for a fee-paying ride, and the average trip is only about five to 6 miles, according to Wedbush analyst Dan Ives.

The situation might not be quite as dire as that, though, at least according to Wolfe analyst Dan Galves: “The cost per mile drops for as the number of miles increases.”

Nonetheless, getting the cost of operation down is critical for drivers. Electric vehicles or hybrid cars could help. While they cost more than gasoline-powered models at the dealership, they get much better mileage. “Electric vehicles make sense in higher-use settings,” say Galves. The gas savings grows the more you drive an electric car.

EVs are more expensive because batteries are costly, but buying used ones can lessen the pain. A 2015 Toyota (TM) Prius in good condition—that gets 50 miles a gallon—can be had for less than $14,000, according to Kelly Blue Book. Driving a high-mileage, used hybrid can be an effective way for ride-hailing drivers to spend less on vehicle operations.

Of course, this is just fun with numbers. The quality of life for ride-hailing drivers, however, has become a serious political issue lately. California just passed a law which designates gig-economy workers as employees and not contractors, potentially raising costs for Uber and Lyft.

“It’s a clear financial negative,” wrote Ives in a Sept. 11 research report. But “we fully expect gig economy companies to continue to push back and find a middle ground, but it’s unclear if and how much they will start paying in the interim period.”

Uber is already pushing back—it has pointed out it offers some employee benefits and 45% of Uber drivers drive less than 10 hours a week. The company didn't comment for this article, but instead pointed us to past comments. Meanwhile, almost 90% of Lyft drivers drive less than 20 hours a week and have other jobs.

Lyft provided the following statement:

“We agree with Governor Newsom that California still has an opportunity to support the overwhelming majority of ride-share drivers who want a thoughtful solution that balances flexibility with earnings guarantees and protections. We are confident that with his leadership we can reach a historic agreement, but if necessary we are prepared to take this issue to the voters to preserve the freedom and access drivers and passengers want.”

There is another issue that potentially affects ride-hailing drivers even more: Many investors believe the pathway to profits for Uber and Lyft involves cutting drivers out of the equation completely. Galves does believe robo-taxis will lower costs, but notes they could be a couple of years away.

Before that happens, there is still a pathway to profitability for Uber and Lyft without eliminating drivers, according to the analyst, as long as the companies price effectively. “There was a period of intense price competition as Uber and Lyft grew their platforms,” says Galves, who rates Uber shares the equivalent of Hold and Lyft stock at Sell. With the two firms maturing, the level of price competition is falling.

Better pricing mean higher value for drivers, too. With higher prices and lower costs, maybe the economics of ride-hailing for drivers can improve.
Whole article is trash, honestly I just stop reading it.

The reason rideshare is unprofitable isn’t because Uber/Lyft spends $1.40 per mile on drivers. FLAT OUT LIE, I challenge anyone to produce a shred of evidence to back that up.
 

Michael - Cleveland

Well-Known Member
Moderator
  • Thread Starter Thread Starter
  • #5
Whole article is trash, honestly I just stop reading it.

The reason rideshare is unprofitable isn’t because Uber/Lyft spends $1.40 per mile on drivers. FLAT OUT LIE, I challenge anyone to produce a shred of evidence to back that up.
Write to them!! The author's email contact info is in the article - let us know what they say!

But I'm not sure I understand your compliant - since:
What it costs Uber (ie: a supposed $1.40/mi) has NOTHING to do with my earnings profitability.
Only MY expenses do.
 

The Gift of Fish

Well-Known Member
For Uber Drivers, the Key to Making More Money Could Be a Used Toyota Prius
Barron's By Al Root Sept 19, 2019

It’s tough to make money as an Uber or Lyft driver, according to the automotive team at Wolfe Research.

They have crunched a lot of ride sharing numbers, and say drivers could do a little better if they could get the cost of car ownership and operation lower. One solution: Buy a Toyota Prius (or another hybrid vehicle).

Uber (ticker: UBER) and Lyft (LYFT) aren’t profitable yet. Wall Street expects Uber to lose about $1.4 billion in the 2019 third quarter. The Street expects Lyft to lose about $330 million over that time frame. One reason is that the cost of catching an Uber or Lyft is about $1.90 a mile, and about 75% of that, or $1.40, goes to drivers.

That may sound like a lot at first, but Wolfe’s math demonstrates how tough it is for drivers to earn a living.

According to Wolfe, personal car ownership costs 50 to 60 cents a mile for ride-sharing drivers. So if they get $1.40 a mile then, by simple math, they net about 85 cents a mile.

According to that math, drivers would need to drive about 38,000 miles—with paying fares in cars—each year to earn the U.S. median income of about $32,000. Assuming you drive five days a week and take two weeks off a year, drivers would need to drive about 150 revenue-generating miles a day—roughly the distance form Manhattan to Springfield, Massachusetts.

And don’t forget up to half of a driver’s time is spent searching for a fee-paying ride, and the average trip is only about five to 6 miles, according to Wedbush analyst Dan Ives.

The situation might not be quite as dire as that, though, at least according to Wolfe analyst Dan Galves: “The cost per mile drops for as the number of miles increases.”

Nonetheless, getting the cost of operation down is critical for drivers. Electric vehicles or hybrid cars could help. While they cost more than gasoline-powered models at the dealership, they get much better mileage. “Electric vehicles make sense in higher-use settings,” say Galves. The gas savings grows the more you drive an electric car.

EVs are more expensive because batteries are costly, but buying used ones can lessen the pain. A 2015 Toyota (TM) Prius in good condition—that gets 50 miles a gallon—can be had for less than $14,000, according to Kelly Blue Book. Driving a high-mileage, used hybrid can be an effective way for ride-hailing drivers to spend less on vehicle operations.

Of course, this is just fun with numbers. The quality of life for ride-hailing drivers, however, has become a serious political issue lately. California just passed a law which designates gig-economy workers as employees and not contractors, potentially raising costs for Uber and Lyft.

“It’s a clear financial negative,” wrote Ives in a Sept. 11 research report. But “we fully expect gig economy companies to continue to push back and find a middle ground, but it’s unclear if and how much they will start paying in the interim period.”

Uber is already pushing back—it has pointed out it offers some employee benefits and 45% of Uber drivers drive less than 10 hours a week. The company didn't comment for this article, but instead pointed us to past comments. Meanwhile, almost 90% of Lyft drivers drive less than 20 hours a week and have other jobs.

Lyft provided the following statement:

“We agree with Governor Newsom that California still has an opportunity to support the overwhelming majority of ride-share drivers who want a thoughtful solution that balances flexibility with earnings guarantees and protections. We are confident that with his leadership we can reach a historic agreement, but if necessary we are prepared to take this issue to the voters to preserve the freedom and access drivers and passengers want.”

There is another issue that potentially affects ride-hailing drivers even more: Many investors believe the pathway to profits for Uber and Lyft involves cutting drivers out of the equation completely. Galves does believe robo-taxis will lower costs, but notes they could be a couple of years away.

Before that happens, there is still a pathway to profitability for Uber and Lyft without eliminating drivers, according to the analyst, as long as the companies price effectively. “There was a period of intense price competition as Uber and Lyft grew their platforms,” says Galves, who rates Uber shares the equivalent of Hold and Lyft stock at Sell. With the two firms maturing, the level of price competition is falling.

Better pricing mean higher value for drivers, too. With higher prices and lower costs, maybe the economics of ride-hailing for drivers can improve.
Meanwhile, in other news, the sky is blue and water is wet :big grin:
 

TheDevilisaParttimer

Well-Known Member
Write to them!! The author's email contact info is in the article - let us know what they say!

But I'm not sure I understand your compliant - since:
What it costs Uber (ie: a supposed $1.40/mi) has NOTHING to do with my earnings profitability.
Only MY expenses do.
How much Uber pays you is your “earnings/gross”

Understand the article is saying Uber essentially pays its driver $1.40/mile on average hence it’s unprofitable. Most places Uber pays .60-.70 cent/mile.

That number also would exclude the cost of insurance since they would still need to be insured under SDCs.

This is a pure fiction piece that is out of touch with reality. Why would I contact an author that obviously did no research about his/her written topic or is on the payroll of one of the rideshare companies?
 
Last edited:

tohunt4me

Well-Known Member
For Uber Drivers, the Key to Making More Money Could Be a Used Toyota Prius
Barron's By Al Root Sept 19, 2019

It’s tough to make money as an Uber or Lyft driver, according to the automotive team at Wolfe Research.

They have crunched a lot of ride sharing numbers, and say drivers could do a little better if they could get the cost of car ownership and operation lower. One solution: Buy a Toyota Prius (or another hybrid vehicle).

Uber (ticker: UBER) and Lyft (LYFT) aren’t profitable yet. Wall Street expects Uber to lose about $1.4 billion in the 2019 third quarter. The Street expects Lyft to lose about $330 million over that time frame. One reason is that the cost of catching an Uber or Lyft is about $1.90 a mile, and about 75% of that, or $1.40, goes to drivers.

That may sound like a lot at first, but Wolfe’s math demonstrates how tough it is for drivers to earn a living.

According to Wolfe, personal car ownership costs 50 to 60 cents a mile for ride-sharing drivers. So if they get $1.40 a mile then, by simple math, they net about 85 cents a mile.

According to that math, drivers would need to drive about 38,000 miles—with paying fares in cars—each year to earn the U.S. median income of about $32,000. Assuming you drive five days a week and take two weeks off a year, drivers would need to drive about 150 revenue-generating miles a day—roughly the distance form Manhattan to Springfield, Massachusetts.

And don’t forget up to half of a driver’s time is spent searching for a fee-paying ride, and the average trip is only about five to 6 miles, according to Wedbush analyst Dan Ives.

The situation might not be quite as dire as that, though, at least according to Wolfe analyst Dan Galves: “The cost per mile drops for as the number of miles increases.”

Nonetheless, getting the cost of operation down is critical for drivers. Electric vehicles or hybrid cars could help. While they cost more than gasoline-powered models at the dealership, they get much better mileage. “Electric vehicles make sense in higher-use settings,” say Galves. The gas savings grows the more you drive an electric car.

EVs are more expensive because batteries are costly, but buying used ones can lessen the pain. A 2015 Toyota (TM) Prius in good condition—that gets 50 miles a gallon—can be had for less than $14,000, according to Kelly Blue Book. Driving a high-mileage, used hybrid can be an effective way for ride-hailing drivers to spend less on vehicle operations.

Of course, this is just fun with numbers. The quality of life for ride-hailing drivers, however, has become a serious political issue lately. California just passed a law which designates gig-economy workers as employees and not contractors, potentially raising costs for Uber and Lyft.

“It’s a clear financial negative,” wrote Ives in a Sept. 11 research report. But “we fully expect gig economy companies to continue to push back and find a middle ground, but it’s unclear if and how much they will start paying in the interim period.”

Uber is already pushing back—it has pointed out it offers some employee benefits and 45% of Uber drivers drive less than 10 hours a week. The company didn't comment for this article, but instead pointed us to past comments. Meanwhile, almost 90% of Lyft drivers drive less than 20 hours a week and have other jobs.

Lyft provided the following statement:

“We agree with Governor Newsom that California still has an opportunity to support the overwhelming majority of ride-share drivers who want a thoughtful solution that balances flexibility with earnings guarantees and protections. We are confident that with his leadership we can reach a historic agreement, but if necessary we are prepared to take this issue to the voters to preserve the freedom and access drivers and passengers want.”

There is another issue that potentially affects ride-hailing drivers even more: Many investors believe the pathway to profits for Uber and Lyft involves cutting drivers out of the equation completely. Galves does believe robo-taxis will lower costs, but notes they could be a couple of years away.

Before that happens, there is still a pathway to profitability for Uber and Lyft without eliminating drivers, according to the analyst, as long as the companies price effectively. “There was a period of intense price competition as Uber and Lyft grew their platforms,” says Galves, who rates Uber shares the equivalent of Hold and Lyft stock at Sell. With the two firms maturing, the level of price competition is falling.

Better pricing mean higher value for drivers, too. With higher prices and lower costs, maybe the economics of ride-hailing for drivers can improve.
$1.40 a mile!!!

Who gets $1.40 a mile???
Post automatically merged:

meanwhile
Toyota PRIUS
THE NEW " FLEET CAR"!
 

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Michael - Cleveland

Well-Known Member
Moderator
  • Thread Starter Thread Starter
  • #12
Understand the article is saying Uber essentially pays its driver $1.40/mile on average hence it’s unprofitable. Most places Uber pays .60-.70 cent/mile.
THAT is NOT what you said above.
You said that the article stated: "Uber/Lyft spends $1.40 per mile on drivers"
What Uber 'spends' on drivers is irrelevant.
Why would I contact an author that obviously did no research about his/her written topic or is on the payroll of one of the rideshare companies?
Just as you said - to ask the author where they got their numbers from and to get a correction from them if they're wrong.
 

Michael - Cleveland

Well-Known Member
Moderator
  • Thread Starter Thread Starter
  • #15
Increase your per mile pay. Drive a luxury black SUV and don’t run lyft or X/Comfort. Drive smart(er)!
...and do 4 rides every two days in a $40,000 vehicle that get's 16MPG. (No thanks, BTDT)
I'll drive my Prius during the week and then an XL (old minivan) on weekend nights.
 

TheDevilisaParttimer

Well-Known Member
THAT is NOT what you said above.
You said that the article stated: "Uber/Lyft spends $1.40 per mile on drivers"
What Uber 'spends' on drivers is irrelevant.
Just as you said - to ask the author where they got their numbers from and to get a correction from them if they're wrong.
What Uber spends on drivers = what Uber pays drivers. If you want to debate that point we can.
 

Michael - Cleveland

Well-Known Member
Moderator
  • Thread Starter Thread Starter
  • #20
$1.40 a mile!!! Who gets $1.40 a mile???
I do, I do... in a surge. $9 tag after a concert/sports event to take people on min fare ride = $12.20 or ~$6.10/mile! (this is why it's silly for drivers to complain about short rides when it's busy out)
meanwhile Toyota PRIUS THE NEW " FLEET CAR"!
New? Have you seen a taxi cab in NYC anytime in the last 10 years? Or corporate owned fleet cars?
They've been Prius for quite some time now.
Post automatically merged:

Not necessarily true. There are costs exceeding pay.
exactly. If the author had meant what Uber PAYS drivers, that's what he would have said.
 
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