I started driving in the summer of 2015. I liked the job so much, I made it my full time occupation. Occasionally I made some real good money. That’s all changed now. When the guarantees end, the wages won’t be worth working for without surge.
Let’s take a typical example of what I’m talking about. I’m in San Diego and the old rates were $1.85 base, .20 per minute, and 1.10 per mile. The new rates are .10 per minute and .90 per mile (zero base). On August 23, 2015 I took a rider 10.64 miles in 21:19 minutes. With the old rates that was ($1.85 + 4.24 + 11.70) x .8 = $14.23. With the new rates it would be ($2.12 + 9.58) x .8 = $9.36. So that’s about a 33% decrease, right?
But what about expenses? Nobody likes the think about that, especially the rideshare companies. Gas, extra insurance (for a rideshare policy), extra maintenance, the occasional ticket, and the big one that people tend to forget about, buying a replacement car when the one you have is all used up from doing so much ridesharing. I have a 2007 Toyota Camry that gets about 22 miles per gallon. I figure about 33.33 cents per mile, which is an easy number to work with. I just divide the miles driven by 3 to get my expense.
So, back to the numbers. The trip was 10.64 miles, divided by 3 equals $3.55. Ah, but there’s one other point that’s easy to forget. What about those extra miles driven without a passenger? Let’s add a modest 1.5 miles for that. So, 10.65 miles plus 1.5 miles = 12.15 miles. Divide that by three and that’s $4.05 in expenses. At the original rates, the ride was $14.23 after the TNC cut, minus $4.05 in expenses, equals $10.18. At the new rate, the ride would be $9.36 after the TNC cut, minus $4.05 in expenses, equals $5.31. Now that’s a 48% cut! Not only that, since that was the only ride I did in the hour, my rate went from $10.18 per hour, just over minimum wage here in San Diego, to $5.31 per hour.
So maybe the difference can be made up in volume. That’s what the TNC’s would have us believe. My sample trip took 21:19 minutes. Two trips would be $10.62 per hour. Not great, but at least above minimum wage. I picked a sample that ran from August 23 to August 31, 2015. I was driving for Uber only, and I wasn’t doing anything but taking every ride they gave me. It was summertime, so things were pretty busy, especially at the beach. Here’s the graph showing August of 2015 rides at today’s rates:
The dots are single rides in an hour. The numbers are multiple rides in an hour. As you can see, multiple rides can increase the hourly wage some, but it’s not huge. Kicking out one highest and one lowest, the highest hourly rate for three rides was $12.89 net after expenses. The lowest rate in an hour was a single ride of $1.23 net after expenses. That’s the best and the worst of it. It’s all going to average out somewhere in the middle. This particular sample averaged out to $5.54 per hour. That’s not anywhere near a living wage here in San Diego.
But what about that dot way over on the right? Seventeen dollars an hour looks pretty good, doesn’t it? Well, I felt the same way. I thought maybe long trips were the answer. But I remember that trip. I ended up in the middle of nowhere with a long way to deadhead back. I did pick up one short trip on the way, and I headed for the closest side of San Diego, so I didn’t have to deadhead back the whole way. Back then, I didn’t give it a second thought. I knew I was making enough to cover it. Now I need to figure the extra expense of deadheading. This is what I’ve come up with:
Miles divided by 10, then squared. Since this is on the low side, keep rounding up.
In this example, 37.38 miles divided by 10 and rounding up is 4. Then square, 4x4 is 16. Divide by 3 (normal expense per mile) and rounding up is $6. This is on the low side, but it’s easy to figure and increases the amount with distance. I think it’s a pretty good rule of thumb.
So I took $6 more off of that fare, which brought it down to $11.61. I think that’s a much more realistic number, maybe even still a little high. I wanted to do another graph with that amount, and I wanted to add into the graph what things looked like at the old rates. Here’s the new graph with the new rates in yellow, the old rates in red, and that one long trip adjusted down by $6 (the long ride at the old rate was adjusted down by $6 too):
This graph makes it painfully clear that deadheading erodes profits in a hurry at the new, lower rates. It’s pretty bad, and I didn’t even add anything for the extra time involved driving back. Just to take it a little further, I figured out what a 200 mile trip would look like. Using my rule of thumb, 20x20=400, so obviously the whole trip is a deadhead. So instead of 33 cents per mile, the cost is 66 cents per mile. In other words, two thirds of 200 is the expense (you could also figure it at 400 miles times 33 cents, same thing). That’s $133.33. Let’s say the trip takes 4 hours. That’s 240 minutes. The fare would be $24 + $180 = $204 Taking away 20% leaves $163.20. Minus $133.33 equals $29.78. Divide that by 4 hours… oops, make that 8 hours since you need the time to get back home, and you get $3.73 per hour. I’m thinking that anything over 20 or 30 miles isn’t worth it unless there’s some way to get back without deadheading.
Just for fun, let’s see what 200 miles would have been at the old rates: $1.85 + 48 + 220 = $269.85 – 20% = $215.88 – 133.33 = $82.55. Divide that by 8 hours, and you get $10.32. Not great, but at least above minimum wage.
It’s pretty clear to me that these new lower rates aren’t going to work out. It’s just not a wage worth working for no matter how much I like the job. Tips and cancellations might help, but probably not enough to make a living wage. Ok, so that leaves the surges. Not working surges has been my way of protesting. It’s been fun to sit back and watch the Uber map go all red without lifting a finger to help, but I don’t think that has really hurt Uber any, and it has hurt me a lot. So I finally swallowed my pride and went out to work the surges on Valentine’s Day.
After expenses I earned $10.86 per hour for the night. Absolutely no tips. I guess they figured that the surge was my tip. My rating took a beating too. They really hate surge. I had one couple at a 1.2 surge rate going a short distance. They were upset and I tried to explain what a 1.2 surge meant, but they seemed certain they were going to be billed $100 or something.
So is this what we’ve come to, hoping for surge? I think I hate surge almost as much as the passengers do. This is going to be great for Uber though. A work force ready and waiting to dash out the door as soon as they throw a little red on the map. That will be a dream come true for them.
If things stay the way they are, that’s our fate. With the tiny base pay we’ve got, surge will be the only way to make a decent wage after the guarantees end. We’ll be competing with each other for an ever decreasing piece of the pie. As more drivers chase less surge, it will eventually dry up all together. Great for Uber. Lousy for us. It makes me angry.
Darn it, this is the United States of America, not some third world country. We have minimum wage laws here. Sad that minimum wage is actually starting to look good to me. Uber doesn’t care about drivers. Slave wages are just fine with them. All they care about is putting increasingly more money in their pocket. I thought ridesharing was such an innovative, brilliant idea when I first heard of it, and it is! How are we going to fight these poverty wages? It’s not like drivers see each other every day at work. How do we build solidarity? They did it in Seattle. If Uber succeeds with this, how many more companies will use the same model? There will be a whole section of the economy working at third-world rates. We can’t allow this! Not for ourselves, not for our riders, not for our country. Somehow we have to fight this.
Look at your local Craigslist. Unless you’re in Seattle, you’ll see many Uber advertisements. They’re hiring our replacements. They’re targeting college students, people who need a flexible schedule, and people who need quick cash. They’re claiming an income of $500 a week (yeah, if you’re lucky, and that’s before expenses). They’re putting people on the road right now, every day. New drivers that are being charged 25% to 30%. They’re keeping us happy with the guarantees until there are enough new people on the road to take our place. Then they’re going to pull the rug out from under us. Guarantees will end. The good rides will disappear. Why? Those good rides will go to the newer drivers paying a higher cut. Of course Uber will do that. Why wouldn’t they? The cut will go higher and higher. They’ll do anything they can get away with.
This isn’t my first experience with a Corporate Giant. In the 1990’s, I worked for Scott Paper. I lived in a tiny Arizona town at the time. They swooshed in bringing good jobs and an economic boom to the area. We were all grateful. When the union came in to organize us, very few were interested. We were for the company! We didn’t need representation. The union quietly left. While we were loyally working hard for the company, Scott Paper was sold to Kimberly-Clark. Millions were made. It wasn’t long before Kimberly-Clark swept through the country with closures. Our plant was one of them. We lost our jobs and the local economy was devastated. Many plants across the country were closed, but not one single union plant closed.
We’ve got a window of opportunity right now. While they’re paying guarantees and hiring our replacements, we need to use this time to organize. We’re Independent Contractors and we need to start acting like it. We should have a vote on what happens. We have a right to decide whether or not to give certain rides. We have a right to the information we need to make those decisions. We have a right to make a reasonable wage. TNC’s are riding roughshod over us because we don’t have a voice, we don’t have a place at the table, and we don’t have a vote.
Corporations are giant monsters blinded with greed. Individuals can’t stand up to them. We need a giant of our own to fight the corporate giant. Corporations have exported our jobs to third world countries with cheap wages. Now they’re trying to import those third world wages into our country. They’re pushing it way too far. Let’s draw the line here. Don’t let them drag us down into poverty wages.
I know a lot of people are saying, “If you don’t like it, quit”. Other people are saying to strike or don’t work surges. I don’t think that unorganized work stoppages are going to hurt Uber any. And quitting is just going to leave the TNC’s free to do whatever they want to the next batch of people. We need to pull together and organize! Let’s make this the enjoyable, reasonably profitable job it once was. Let’s fight for the right to provide exceptional service to our riders. Let’s find our voice, claim our rights, and pull a chair up to the table. Fight for the American Dream. Don’t quit. Fight!
Please start a rideshare association, collective, or union in your city.
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