Uber's Prop 22 Earnings Guarantee Explained By A Driver

The Gift of Fish

Well-Known Member
I have seen a couple of threads here in which posters have said that they don't understand Uber's earnings guarantee. So, here it is:

(TL : DR - With its clever mentions of "minimum wage + 20%" and "mileage allowance", the Uber earnings guarantee offer intends to convince drivers and others voting on Prop 22 that it features a robust job-like earnings protection for drivers. However, a closer look reveals that it is, in reality, simply a per-trip earnings guarantee that covers only part of drivers' total work time and mileage expense. It is a woefully inadequate offer which falls way short of the minimum wage + all expenses earnings floor set by AB5)

What is the earnings guarantee?

The earnings guarantee does not replace current rates per mile or rates per minute. What it does is guarantee that drivers will earn 1.2 times the minimum wage plus 30 cents per mile but only from ping acceptance until pax dropoff. So, using SF rates, let's say that you get a ping that is one mile away and the trip length is 5 miles; total distance driven is 6 miles. It takes you 4 minutes to drive to the pax, 3 minutes for the pax to get to the car and 15 minutes to drive the pax to their destination; total time = 22 minutes. Uber would guarantee that the driver would make on this trip:

Mileage: 6 x $0.30 = $1.80
Minimum wage x 1.2 for those 22 minutes: $15 x 1.2 x (22/60) = $6.60
Total guaranteed earnings: $8.40

Now let's see what the trip earnings would be for this trip:

Base fare : $1.60
Miles: 5 x $0.72 (the app only calculates miles with pax on board) = $3.60
Time: 1 minute wait time + 15 minutes' drive = 16 minutes. 16 x $0.31 = $4.96
Total: $1.60 + $3.60 + $4.96 = $10.16

Because $10.16 actual earnings is $1.76 above the $8.40 guarantee, no guarantee payment would be made.

Is this an hourly pay guarantee?

No, it is not. Although the guarantee mentions 1.2 times minimum wage, it only applies while the driver is on route to pick up a pax or has pax on board. This is crucial - because it only applies when the driver is on a trip, it is nothing more than an individual trip earnings guarantee, not a guarantee of hourly earnings for the total time spent working rideshare on a given day.

Why is this guarantee good?

In SF, the app pay rates are (for a 20 percenter) $0.72 per mile and $.31 per minute. The guarantee's rates per mile are $0.30 per mile and ($15 x (1.2 / 60)) = $0.30 per minute. So it's fairly easy to see that the app rates will almost always beat the guarantee - 72 cents per mile is way higher than the 30 cent per mile of the guarantee and $0.31 beats $0.30 per mile. However, the app only pays when the pax is in the car, whereas the guarantee also applies during the drive to the pickup. So, there are situations in which the guarantee would actually pay out, that is, when the drive to the pickup is exceptionally long and the trip length with pax on board is short. However, experienced drivers know that doing these trips (i.e. a 10 mile drive to pickup in order to drive a pax 2 miles) is a total waste of time and should be avoided at all costs. So, for experienced drivers who know what they are doing, this potential benefit of the guarantee would not apply.

Why is this guarantee bad?

First, as already mentioned, this is a trip earnings guarantee; it is not a "shift" earnings guarantee. It does not apply to all of the time worked and it does not apply to all of the miles driven on a shift.

Second, it allows Uber to continue its deprioritisation practice, whereby it sends vastly fewer pings to drivers who it considers aren't accepting enough pings. That would be you, all you cherry pickers out there. If Uber chooses not to give a driver any trips or very few trips then the driver will earn very little and the guarantee will not pay.

Third, the guarantee mentions that it is calculated over a two week basis. This means that if your earnings were to exceed the guarantee on one trip, as in the above example where the actual earnings exceeded the guarantee by $1.76, but on the next trip the actual earnings were, for example, $1.50 below the earnings guarantee, the driver wouldn't get any guarantee payment for the second trip! The reason is that $1.76 - $1.50 = $0.26. The total earnings of the driver for both trips would still be 26 cents above the guarantee amount, meaning no extra pay, even though the second trip was below guarantee. It's easy to see that, over all of the trips done by a driver in a two week period, the trips in which the driver did not beat the earnings guarantee will be "compensated for" by the higher paying trips that the driver did within the period. This means, in effect, that the driver's own earnings from those higher paying trips will be used to cover the earnings guarantee for the lower paying trips, instead of it being paid by Uber.

Why does Uber choose a two week period over which to evaluate drivers' earnings for the guarantee instead of just using the normal one week pay period? Because the longer the period, the more it benefits Uber and the more it detriments drivers - a two week trip analysis period means a higher chance that a driver will accrue higher paying trips which would raise his/her average while-on-trip earnings, and therefore a lower chance that Uber will have to actually pay the guarantee. Uber now trumpets that it wants to do right by drivers. If it wanted to, it could calculate the earnings guarantee after the completion of each trip. This would give drivers maximum earnings protection under it. But evidently Uber does not want to do that, preferring to build the minimum payment possible into the design of the guarantee.

Overall, this guarantee is stacked heavily in Uber's favour and gives drivers virtually nothing while allowing Uber to maintain its control over drivers at almost no additional cost to itself.

Uber's offer in the driver app mentions an hourly guarantee example of $23.10/hr in Los Angeles. Is this smoke and mirrors?

Yes. Uber's example covers only the hours spent driving to the pax and with pax on board. We generally are on a trip about 50% of the total time we drive rideshare. This means that, in order to drive the 20 hours on-trip time in Uber's example, we would have been in the car for around 40 hours total, meaning that Uber's guarantee is actually worth $11.55 per hour, which is less that the $13/hr minimum wage in Los Angeles. And that's before the driver pays for gas, car maintenance and all the other expenses.
 
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TheDevilisaParttimer

Well-Known Member
I have seen a couple of threads here in which posters have said that they don't understand Uber's earnings guarantee. So, here it is:

What is the earnings guarantee?

The earnings guarantee does not replace current rates per mile or rates per minute. What it does is guarantee that drivers will earn 1.2 times the minimum wage plus 30 cents per mile but only from ping acceptance until pax dropoff. So, using SF rates, let's say that you get a ping that is one mile away and the trip length is 5 miles; total distance driven is 6 miles. It takes you 4 minutes to drive to the pax, 3 minutes for the pax to get to the car and 15 minutes to drive the pax to their destination; total time = 22 minutes. Uber would guarantee that the driver would make on this trip:

Mileage: 6 x $0.30 = $1.80
Minimum wage x 1.2 for those 22 minutes: $15 x 1.2 x (22/60) = $6.60
Total guaranteed earnings: $8.40

Now let's see what the trip earnings would be for this trip:

Base fare : $1.60
Miles: 5 x $0.72 (the app only calculates miles with pax on board) = $3.60
Time: 1 minute wait time + 15 minutes' drive = 16 minutes. 16 x $0.31 = $4.96
Total: $1.60 + $3.60 + $4.96 = $10.16

Because $10.16 actual earnings is $1.76 above the $8.40 guarantee, no guarantee payment would be made.

Is this an hourly pay guarantee?

No, it is not. Although the guarantee mentions 1.2 times minimum wage, it only applies while the driver is on route to pick up a pax or has pax on board. This is crucial - because the guarantee only applies when the driver is on a trip, it is a guarantee of trip earnings only, not of hourly earnings for the total time spent working rideshare on a given day.

Why is this guarantee good?

In SF, the app pay rates are (for a 20 percenter) $0.72 per mile and $.31 per minute. The guarantee's rates per mile are $0.30 per mile and ($15 x (1.2 / 60)) = $0.30 per minute. So it's fairly easy to see that the app rates will almost always beat the guarantee - 72 cents per mile is way higher than the 30 cent per mile of the guarantee and $0.31 beats $0.30 per mile. However, the app only pays when the pax is in the car, whereas the guarantee also applies during the drive to the pickup. So, there are situations in which the guarantee would actually pay out, that is, when the drive to the pickup is exceptionally long and the trip length with pax on board is short. However, experienced drivers know that doing these trips (i.e. a 10 mile drive to pickup in order to drive a pax 2 miles) is a total waste of time and should be avoided at all costs. So, for experienced drivers who know what they are doing, this potential benefit of the guarantee would not apply.

Why is this guarantee bad?

First, as already mentioned, this is a trip earnings guarantee; it is not a "shift" earnings guarantee. It does not apply to all of the time worked and it does not apply to all of the miles driven on a shift.

Second, it allows Uber to continue its deprioritisation practice, whereby it sends vastly fewer pings to drivers who it considers aren't accepting enough pings. That would be you, all you cherry pickers out there. If Uber chooses not to give a driver any trips or very few trips then the driver will earn very little and the guarantee will not pay.

Third, the guarantee mentions that it is calculated over a two week basis. This means that if your earnings were to exceed the guarantee on one trip, as in the above example where the actual earnings exceeded the guarantee by $1.76, but on the next trip the actual earnings were, for example, $1.50 below the earnings guarantee, the driver wouldn't get any guarantee payment for the second trip! The reason is that $1.76 - $1.50 = $0.26. The total earnings of the driver for both trips would still be 26 cents above the guarantee amount, meaning no extra pay, even though the second trip was below guarantee. It's easy to see that, over all of the trips done by a driver in a two week period, the trips in which the driver did not beat the earnings guarantee will be "compensated for" by the higher paying trips that the driver did within the period. This means, in effect, that the driver's own earnings from those higher paying trips will be used to cover the earnings guarantee for the lower paying trips, instead of it being paid by Uber.

Overall, this guarantee is stacked heavily in Uber's favour and gives drivers virtually nothing while allowing Uber to maintain its control over drivers at almost no cost to itself.

Uber's offer in the driver app mentions an hourly guarantee example of $23.10/hr in Los Angeles. Is this smoke and mirrors?

Yes. Uber's example covers only the hours spent driving to the pax and with pax on board. We generally are on a trip about 50% of the total time we drive rideshare. This means that, in order to drive the 20 hours on-trip time in Uber's example, we would have been in the car for around 40 hours total, meaning that Uber's guarantee is actually worth $11.55 per hour, which is less that the $13/hr minimum wage in Los Angeles. And that's before the driver pays for gas, car maintenance and all the other expenses.
👀

Trying to understand Uber math...

head-explodes.gif
 

NicFit

Well-Known Member
It also means Uber can’t lower rates any lower then this, as long as there is a ping going that means Uber can’t slash rates to below minimum wage. If you aren’t getting rides why should Uber pay to you sit around? I just pull over when done with one ride and wait for the next. If I don’t get a ride in a short amount of time I’ll drive to a busier place. During that drive I keep the app on and write it off on my taxes. I know how to make more money then this formula so it will never kick in. But the point is that while you have a request from Uber you will be guaranteed this rate and they can’t make you drive for less then minimum wage ever
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If this fails and they make you an employee do you really think your going to get a cut of the fares anymore? Nope, you’ll get minimum wage and only minimum wage, no surge, no bonus, no fare cuts, nothing more. Take this deal, you want to be their partner and not their employee, how many other service jobs pay a cut of the service to their employees?
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This is a safety net, not a money maker, vote yes on Prop 22
 

TRugen

Member
It also means Uber can’t lower rates any lower then this, as long as there is a ping going that means Uber can’t slash rates to below minimum wage. If you aren’t getting rides why should Uber pay to you sit around? I just pull over when done with one ride and wait for the next. If I don’t get a ride in a short amount of time I’ll drive to a busier place. During that drive I keep the app on and write it off on my taxes. I know how to make more money then this formula so it will never kick in. But the point is that while you have a request from Uber you will be guaranteed this rate and they can’t make you drive for less then minimum wage ever
Post automatically merged:

If this fails and they make you an employee do you really think your going to get a cut of the fares anymore? Nope, you’ll get minimum wage and only minimum wage, no surge, no bonus, no fare cuts, nothing more. Take this deal, you want to be their partner and not their employee, how many other service jobs pay a cut of the service to their employees?
Post automatically merged:

This is a safety net, not a money maker, vote yes on Prop 22
Does Uber pay you per post or per word?
 

The Gift of Fish

Well-Known Member
  • Thread Starter Thread Starter
  • #12
It also means Uber can’t lower rates any lower then this, as long as there is a ping going that means Uber can’t slash rates to below minimum wage. If you aren’t getting rides why should Uber pay to you sit around? I just pull over when done with one ride and wait for the next. If I don’t get a ride in a short amount of time I’ll drive to a busier place. During that drive I keep the app on and write it off on my taxes. I know how to make more money then this formula so it will never kick in. But the point is that while you have a request from Uber you will be guaranteed this rate and they can’t make you drive for less then minimum wage ever
As above, the guarantee applies only to miles and time while on a trip. Miles driven while empty are not paid and, as demonstrated above, it certainly would be possible for earnings after expenses to be below minimum wage with this guarantee. It would also be possible for Uber to further lower pay rates (although to a lesser degree than previous pay drops) before they would have to pay out under the guarantee.
If this fails and they make you an employee do you really think your going to get a cut of the fares anymore? Nope, you’ll get minimum wage and only minimum wage, no surge, no bonus, no fare cuts, nothing more. Take this deal, you want to be their partner and not their employee, how many other service jobs pay a cut of the service to their employees?
The purpose of this thread is only to explain and discuss Uber's guarantee offer. I won't argue the IC / employee debate here; that has already been done in many other threads.
 

NicFit

Well-Known Member
As above, the guarantee applies only to miles and time while on a trip. Miles driven while empty are not paid and, as demonstrated above, it certainly would be possible for earnings after expenses to be below minimum wage with this guarantee.
The purpose of this thread is only to explain and discuss Uber's guarantee offer. I won't argue the IC / employee debate here; that has already been done in many other threads.
If your empty then why are you driving? I don’t drive around empty and don’t take long distant trips, that’s how you lose money. Why should you be paid when your car is empty without a call, that makes no sense. You choose to drive around empty, then that’s your fault for losing money
 

Daisey77

Well-Known Member
Yes, forgetting about flying robot cars and 100s of millions spent on trophy offices would go some way towards that.
Well I'm quite sure the 90 million dollars they used to fight the law in California as well as the 680 million dollars they put in politicians hands would help close the gap on their financial deficit
If you aren’t getting rides why should Uber pay to you sit around? I just pull over when done with one ride and wait for the next.
Here in Colorado they have to pay you even if its waiting time or standby time.
Nope, you’ll get minimum wage and only minimum wage, no surge, no bonus, no fare cuts, nothing more.
minimum wage plus any expense reimbursement
. Take this deal, you want to be their partner and not their employee
we already are not their partners. they already made us sign an agreement saying we were not there partners
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it certainly would be possible for earnings after expenses to be below minimum wage with this guarantee
This is absolutely illegal on a federal level. No Matter What expenses cannot lower an employee's pay to less than minimum wage
 

NicFit

Well-Known Member
Well I'm quite sure the 90 million dollars they used to fight the law in California as well as the 680 million dollars they put in politicians hands would help close the gap on their financial deficit

Here in Colorado they have to pay you even if its waiting time or standby time.
minimum wage plus any expense reimbursement
we already are not their partners. they already made us sign an agreement saying we were not there partners
Yeah, wait until your their employee, no more surge, no bonuses, no fare cuts, nothing more then minimum wage plus reimbursements. Uber will charge what they want for a ride and throw you a wage and Uber won’t care
 

The Gift of Fish

Well-Known Member
  • Thread Starter Thread Starter
  • #16
If your empty then why are you driving? I don’t drive around empty and don’t take long distant trips, that’s how you lose money. Why should you be paid when your car is empty without a call, that makes no sense. You choose to drive around empty, then that’s your fault for losing money
Don't get hung up on driving around empty. Remember, it's not only empty miles that are not paid - empty time spent waiting for the next ping is not paid either. Unfortunately in SF, there just isn't the volume of pings to be able to get a good ride without having to wait a considerable amount of time rejecting all the bad pings. Time which, under this guarantee, is not paid.

I am a cherry picker - I only take rides that I identify as money makers. No long distance pickups, no min fare shorties, no long trips at base fare to the middle of nowhere. Doing this in SF means deprioritisation by Uber, and spending the rest of the week receiving almost no pings. This guarantee offers me nothing in these circumstances and staying out waiting for the odd ping that Uber deems fit to give me would result in earnings way below minimum wage.

Additionally, some driving empty is, obviously, indeed necessary. Not all dropoffs will be in areas where there are rides to be had and relocation is required. Drivers dropping off downtown can't just pull over after the drop, put the flashers on and block the street while they wait for the next ping - they have to keep driving. Etc etc.

You ask, "Why should you be paid when your car is empty without a call?". Well, as employees the law says that we get paid when the car is empty. Uber's offer is to not be paid when the car is empty. Based on this single factor alone, I prefer to be paid when the car is empty over not being paid when the car is empty.
 
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Daisey77

Well-Known Member
Yeah, wait until your their employee, no more surge, no bonuses, no fare cuts, nothing more then minimum wage plus reimbursements. Uber will charge what they want for a ride and throw you a wage and Uber won’t care
My net business profit on my 2019 taxes is equivalent to $2.98 an hour. Either way I think I'll be ahead. And that's with surges!
 

The Gift of Fish

Well-Known Member
  • Thread Starter Thread Starter
  • #18
This is absolutely illegal on a federal level. No Matter What expenses cannot lower an employee's pay to less than minimum wage
We're talking in the context of prop 22 passing and drivers continuing to drive as pseudo ICs with Uber's guarantee. Of course it is correct that employees must be paid at least minimum wage, plus expenses.
 

TheDevilisaParttimer

Well-Known Member
It also means Uber can’t lower rates any lower then this, as long as there is a ping going that means Uber can’t slash rates to below minimum wage. If you aren’t getting rides why should Uber pay to you sit around? I just pull over when done with one ride and wait for the next. If I don’t get a ride in a short amount of time I’ll drive to a busier place. During that drive I keep the app on and write it off on my taxes. I know how to make more money then this formula so it will never kick in. But the point is that while you have a request from Uber you will be guaranteed this rate and they can’t make you drive for less then minimum wage ever
Post automatically merged:

If this fails and they make you an employee do you really think your going to get a cut of the fares anymore? Nope, you’ll get minimum wage and only minimum wage, no surge, no bonus, no fare cuts, nothing more. Take this deal, you want to be their partner and not their employee, how many other service jobs pay a cut of the service to their employees?
Post automatically merged:

This is a safety net, not a money maker, vote yes on Prop 22
Actually once Uber has the law off their back they will continue to lower wages and mistreat drivers.

Uber has a global track record of lying, skirting the law, and obstructing justice.

What makes you think Uber will not do the same once AB5 is off their back?
 
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