Monday, October 20, 2014

Poor business model: Drivers pay toll upfront and gets reimbursed the following week

Absolutely the worst business model in ridesharing is requiring the driver to pay tolls upfront. As many riders who need to go back and forth between San Francisco and the East Bay, this recurring toll charge can financially bury a driver. Ridesharing drivers won't receive this toll reimbursement until the following payday. It hurts a ridesharing driver to pay toll multiple times during a shift.

We know that ridesharing drivers who spend their cash on many rider tolls can't get on the road. If they are broke and waiting to get paid on Thursday morning, then it may be tough to get $5 between Monday and Wednesday. In case a rider requests a trip into San Francisco from the East Bay, ridesharing drivers must have this money readily available or risk a toll violation.

Ridesharing drivers must worry about repairs, maintenance, gas, and toll charges. This is the worst business model, where drivers can keep sustaining these expenses to keep operable. It is an absolute nightmare to wait for money earned, which keeps a driver off the road between Monday-Thursday because all their money was spent on gas to drive the weekend.

It is very easy for drivers to spend hundreds of dollars on expenses during the weekend. Their small earnings after driving expenses and commission lack are deducted net them less than a minimum wage job. How can a driver get on the road to drive 50-100 hours per week without having access to their fares? They can't sustain this business model.

Paying bridge tolls multiple times during each shift can put a driver out of commission. Unless this driver is making a fortune from previous weeks and has a surplus to drive, they are not making anything substantial. They can't operate without having access to these rideshare earnings. Giving rides on Monday-Thursday will take 7-10 days to get paid out. Awful system!

Taxi drivers have a huge advantage over ridesharing drivers. They don't know this, but they can drive many hours per day and keep earning fares. Their cash fares, tips and credit card payments accommodate their driving needs. No maintenance and repairs to worry about. The medallion owner covers all these costs. All taxi drivers must do is pay their lease cost per shift. That's it!

Ridesharing drivers get paid weekly. They beat their personal vehicles up, where any repairs can block them from taking the road. It makes sense to drive on weekends, as these trips are paid out 4-6 days later. However, trips taken Monday-Wednesday take 8-10 days to get paid out.

What happens when drivers spend their money driving on these days? They are left without any money to afford weekend driving. Earnings paid out on Thursday morning cover previous week expenses (gas, tolls, supplies, repairs, and maintenance), as well as bills such as rent, car payments, credit cards, and utilities other living expenses.

Taxi drivers can sleep good knowing that ridesharing drivers are restricted from getting on the road. Driving is a demanding job that requires quicker payouts to stay on the road. If gas runs out, a driver must stop driving and their weekends can end prematurely. Taxi drivers have available funds to drive 10 hours per day or night. It is a competitive advantage that taxi drivers fail to realize.

Paying rider toll charges upfront is a poor business model. It will bury ridesharing drivers who lack the funding to afford these charges multiple times per day. Because riders go in and out of the city, the cost to afford gas and tolls is a deal breaker. It really is the door that blocks access to driving.