Why Does Uber Make More Per Your Trip Than You Do?

Rich Brunelle

Well-Known Member
At the current rates in most of the markets served in the US, Uber takes more of the trip money than you do. If you calculate your costs at $0.54 per mile, pay your Self Employment taxes, deduct Ubers "Booking" fee and their commission between $0.20 and $0.30 per mile, most of you will discover that you can even not make a penny on a trip while Uber still takes home a few dollars. Here's a worksheet that will do your calculations for you: Worksheet

Go ahead, check it out!
 

FAC

Well-Known Member
But uber and Lyft are making bank on pool/line rides. The driver is paid for a single ride but U/L take the entire fare of the extra pax you pick up.
 

The Mollusk

Well-Known Member
Fact is that uber doesn't make more than drivers. Uber is currently losing money.
Ubers making money hand over fist. As a company , it's probably not profitable yet. Which is also a huge play on words. The executives probably draw massive salaries and are making tons and tons of money .
 

WestSubDriver

Well-Known Member
I guess if you are driving full-time and have a car fully dedicated to Uber/Lyft then this might be your cost. But the vast majority of us are doing this in our spare time with a personal car and driving 10-15 hrs/wk. The cost is really just the marginal miles/cost of operating that car. I found the attached article to be more enlightening. Might be a little too positive toward the Uber/Lyft model for my tastes but still points out a better way to approach the cost analysis. The 2016 AAA Driving Report quoted in the article (link in the article) seems pretty useful.

https://fee.org/articles/do-uber-drivers-lose-money/

I figured out pretty quickly that it made no sense to drive for Uber's base rates. So, if no incentives like hourly guaranteed fares then I'm not on the road.
 

Greguzzi

Well-Known Member
Then you deserve to lose money.

If your real-world costs are that high, you're driving the wrong vehicle.
Or are in denial of the fact that unless you are on a lease that pays all maintenance, you really do not know what your cost were or are until you quit driving or have sold or scrapped your car.
 

madbrain

New Member
At the current rates in most of the markets served in the US, Uber takes more of the trip money than you do. If you calculate your costs at $0.54 per mile, pay your Self Employment taxes, deduct Ubers "Booking" fee and their commission between $0.20 and $0.30 per mile, most of you will discover that you can even not make a penny on a trip while Uber still takes home a few dollars. Here's a worksheet that will do your calculations for you:

Go ahead, check it out!
Thanks ! I see a few errors.
1) the way you calculated your self employment taxes . First, where does the 22% come from ? And second, you multiplied your hourly wage by this rate. So, this should read "self employment taxes per hour". Not a very useful number. You should calculate the total self employment taxes.
2) You are including both gallons of gas and car cost per mile. The 54 cents/mile is what you are allowed to deduct by the IRS, not your actual cost. And I think that number is supposed to include the cost of acquisition (principal), insurance, maintenance, repairs, and gas, ie. the totality of your vehicle expenses. So, essentially, you have duplicated the cost of gas here. You are confusing the net profit and the taxable profit.
Your deductible cost per mile will always vary from your actual cost per mile - it may be lower or higher. You need two separate calculations - one for actual cost, one for deductible cost.
 

Rich Brunelle

Well-Known Member
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  • #10
First, you have to input the correct information for the spreadsheet to work. You have to input your specific data such as mileage, hours, how many trips, what % you pay Uber, what Uber charges for your "Booking Fee" and any other item necessary. The MPG and costs for Gas does not get added to the calculations for your earnings, it is only informational for you. You have no choice of deductible cost or actual cost. The deductible cost is factored over the period of one year. You can not use your actual cost until the end of the year to get the true actual.

Anybody that thinks Uber isn't making money can't see the bigger picture. Uber pisses more money away on legal expense than they ever will on payroll. If Uber would do one thing in compliance with the rest of the world, Uber would be able to pay us like it was 2012!
 

Rich Brunelle

Well-Known Member
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  • #11
Fact is that uber doesn't make more than drivers. Uber is currently losing money.
Uber is not losing money. Uber is pissing away money on their legal issues. Uber creates their own loss because the boss is too busy trying to screw over the world to play good business.
 

Rich Brunelle

Well-Known Member
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  • #12
Then you deserve to lose money.

If your real-world costs are that high, you're driving the wrong vehicle.
You cannot use any other figure than the governments $0.54 per mile. Doing so assumes that you have actually factored your costs over the period of one year. Nobody cares if it costs $0.30 today, what will it cost tomorrow. Are you really in business? Because EVERY Business I know of that takes a mileage deduction, uses the government's recommendation unless they have information from a different source that allows them a better deduction.
 

renbutler

Well-Known Member
You cannot use any other figure than the governments $0.54 per mile. Doing so assumes that you have actually factored your costs over the period of one year. Nobody cares if it costs $0.30 today, what will it cost tomorrow. Are you really in business? Because EVERY Business I know of that takes a mileage deduction, uses the government's recommendation unless they have information from a different source that allows them a better deduction.
You aren't listening to anybody.

I do indeed calculate my costs over many, many months. My maintenance records go back a decade. I appraise my vehicles on edmunds.com the first of every month, separating the mileage-based depreciation from the depreciation based on other factors (demand, model year, etc.). Gas prices are erratic, so I use a shorter term to determine the average gas price per mile.

My real-world cost per mile during my Uber months was about 25 cents per mile. My maintenance costs over 67,726 miles was $5,530.87, which comes to about 8 cents per mile. My fuel is also 8 cents per mile. Depreciation based on my vehicle's mileage is 5.3 cents per mile. Although I don't count insurance and registration as a per-mile cost, my older vehicle costs about 4 cents per mile to insure and register. I bought the vehicle with cash many years before I started driving for Uber, so I never had any financing costs.

But, of course I used the 54 cent per mile mileage deduction on my tax return! Why? Because I'm allowed to!

You think you're preaching something people don't know, but you are the one who actually is missing the point: 54 cents per mile is an AVERAGE. Some people pay more, smarter people pay less -- sometimes MUCH less. And everybody should indeed know their true cost of operation, especially if they use their vehicle to try to make money.
 
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SEAL Team 5

Well-Known Member
most of you will discover that you can even not make a penny on a trip while Uber still takes home a few dollars.
I just reworded your post a little bit so you can see that you already knew the answer to your thread title.

Uber will still take home a few dollars because most of you will CONTINUE TO not make a penny on a trip.
 

14gIV

Well-Known Member
Hi Rich Brunelle not even in your city of San Leandro CA does uber keep more than Uber Driver Partners.. uber only keeps 20% (unless you're a noob they keep only 25%)
 

Rich Brunelle

Well-Known Member
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  • #16
You aren't listening to anybody.

I do indeed calculate my costs over many, many months. My maintenance records go back a decade. I appraise my vehicles on edmunds.com the first of every month, separating the mileage-based depreciation from the depreciation based on other factors (demand, model year, etc.). Gas prices are erratic, so I use a shorter term to determine the average gas price per mile.

My real-world cost per mile during my Uber months was about 25 cents per mile. My maintenance costs over 67,726 miles was $5,530.87, which comes to about 8 cents per mile. My fuel is also 8 cents per mile. Depreciation based on my vehicle's mileage is 5.3 cents per mile. Although I don't count insurance and registration as a per-mile cost, my older vehicle costs about 4 cents per mile to insure and register. I bought the vehicle with cash many years before I started driving for Uber, so I never had any financing costs.

But, of course I used the 54 cent per mile mileage deduction on my tax return! Why? Because I'm allowed to!

You think you're preaching something people don't know, but you are the one who actually is missing the point: 54 cents per mile is an AVERAGE. Some people pay more, smarter people pay less -- sometimes MUCH less. And everybody should indeed know their true cost of operation, especially if they use their vehicle to try to make money.

I am listening to you, and I commend you for actually doing the research to acquire the numbers necessary to do your calculations. I hope you realize you are but one of 100 thousand that has actually done so. New drivers tend to believe Uber Logic that says "Your car costs less," when Uber should not use less than the government figures for their calculations regardless of a driver's car performance. I appreciate your response because it demonstrates somebody else working the numbers rather than falling for the B.S. floating around out here. But, the last line says it all. Why should Uber pay less when I am allowed to write off more?
 

Rich Brunelle

Well-Known Member
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  • #17
Hi Rich Brunelle not even in your city of San Leandro CA does uber keep more than Uber Driver Partners.. uber only keeps 20% (unless you're a noob they keep only 25%)
Actually Uber does keep more than the drive's %age. Don't you find it interesting that Uber reduced driver rates, then turned around and increased the now, "booking fee?"
 

Rich Brunelle

Well-Known Member
  • Thread Starter Thread Starter
  • #18
I just reworded your post a little bit so you can see that you already knew the answer to your thread title.

Uber will still take home a few dollars because most of you will CONTINUE TO not make a penny on a trip.
Thank You!
 

renbutler

Well-Known Member
Why should Uber pay less when I am allowed to write off more?
Because our expenses are our concern, not theirs. They just need to ensure that they have an appropriate supply of drivers to meet the demand. And if they can accomplish that while paying the current low rates, it makes business sense to do so.

I certainly won't drive at regular uberX rates (I drive only uberXL and the rare uberX surges). But enough people do, so we're stuck with these rates.
 
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