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Monday, November 17, 2014

Want to earn $5-$12 per hour driving on UberX?

Uber launched their UberX platform a few years ago to corner the ridesharing market. Their business tactics, such as reducing fares to bottom line prices and recruiting Lyft drivers, have suffocated Lyft's bid to expand and withstand price competition. Can Lyft survive going up against powerhouse Uber? The real question is if UberX drivers can survive fare reductions and continue to drive for peanuts?

Don't let weekly deposits fool you into believing driving for Uber is lucrative. The ads rotating with $40 an hour fares don't include Uber 20% commission and all the expenses in the image below.

Think about what drivers are putting in and what Uber is giving in return. The cost to partake in ridesharing services is too expensive. When it is all said and done, you may as well work at Target and/or as a restaurant service. There is little profit to be made ridesharing on the UberX platform.

Drivers share that this ride app technology company doesn't understand that they can't keep reducing prices. Uber attempts to build confidence in their Partners that dropping prices will land them more business, and this means less downtime. How is that? It has been dead on the weekend. One driver had to leave the East Bay on a Saturday night because they only got one ride. When this driver traveled into San Francisco, the ride requests were arriving too slow. This means this driver has to waste more time and gas searching for business.

Several months ago, when prices were higher and rides cost more, business was booming. Clients were not complaining that prices were too high. They enjoyed the ride experience, the convenience to get a fast ride and reach their destination on time. Clients from all walks of life take UberX. They save on their trips, have a cool conversation with drivers, and reach destinations without any delays (drivers try their best to do this). Drivers earned plenty of money and still could withstand overhead expenses. It is now getting worse, as lucrative trips are minimal. No non-surged trip in the city pays greater than $20.

Last year, $25+ trips were the norm. Driver out to the most distant neighborhood in the Sunset and Richmond and this ride cost $25+. Taxis charge far more for these trips. However, UberX prices are so low that taking a regular priced trip into these distant neighborhoods cost less than $19. These prices dropped when gas prices were still at record highs. As gas continues to reduce, drivers are managing to stay afloat with these cheap fares.

How can drivers believe that cheap prices equal more money? It is more like take more trips, drive more miles, spend more on gas, and then you can make about the same doing less and spending less several months ago. With Uber Weekly Summary disappearing again, there is no ideal way to compare numbers to make adjustments. There is no way possible to sustain these fare drops.

It took a driver over an hour to get their first ride in San Francisco on Sunday night. However, the Sunday before this driver took long trips and delivered several rides at all times of the evening and night. Ride business is unpredictable. Drivers may know the hotspots, but ride requests are reliant on clients opening up their Uber rider apps and requesting a ride. It doesn't always happen this way, because surge pricing fluctuates and this influences most clients from requesting rides.

Business is not the same since the price drop back in September. In order to make a decent amount, drivers are cranking out the rides. They must complete 25 rides to make what 15 rides would pay before the summer. Uber will claim that offering clients 25% savings during the summer created more business. According to Uber, they incurred this savings and then decided to reduce rates on September 15, 2014 to stimulate business and reduce downtime. If business was already thriving, why reduce rates and allow drivers to incur these savings.

In the transportation industry, reducing prices is not the smart strategy. Uber employees are not on the roads giving these rides. They don't have to clean vomit. They don't deal with rude riders. Would it make sense to at least ask the opinions of their drivers before reducing fares? Drivers earn money taking long trips. This is their bread and butter.

The small $5-$6.50 trips cost them time and money. These clients taking short trips are not usually ready. Drivers must wait 5-10+ minutes for them to arrive. Another 7-12 minutes is invested into this ride. Now, we have over 20 minutes of time and a $5-$6 fare. At this rate, a driver will only make $15-$18 in an hour.  However, Uber will take $3 for safe trips, 20% commission, and we must deduct gas. The driver receives $12 for this hour before gas and other expenses.

How can we combat all the cancellations on UberX? What about the constant no-shows? Or clients abusing the cancellation policy? There must be a revision to this free first-time cancellation. Clients requested rides from 30 miles out and then cancel right at the pickup address. They have the nerve to call these drivers at this pickup address to inform them they don't need this ride anymore.

Sidecar has a new system in place that gives their riders 5 minutes to arrive, or the ride is cancelled and they are charged $5. The Sidecar has permission to move on and get additional rides. They also have a Back-to-Back feature to connect drivers and clients during existing trips. Their heat map is accurate to reflect business, rather than just cover an entire region (Uber) that doesn't produce any rides until this surge disappears.

UberX drivers are depreciating their vehicles, spending a fortune on gas, giving out water and snacks, paying toll charges to get into cities, paying $10 data charge to Uber, paying monthly cellular phone bills to accept and make calls and text clients. The best time to profit from ridesharing was at the beginning. As recent as early this year, drivers paid out 5% commission and actually saw more of their earnings. Then, a $1 safe ride helped to alleviate the steep increase of commission from 5% to 20$.

The ridesharing game is changing. Drivers are expected to spend more, and make less money. The $1 safe ride fee goes to Uber. They charge $10 per week to use a phone with no capabilities beyond the Uber driver app. There is even a charge to order new business cards to promote Uber. Is this how a billion dollar company treats the people who make them relevant?

Ridesharing companies are getting too powerful. They pretty much dictate the transportation market. Their business strategy is to let drop prices so low that it will push out the competition (Lyft). This action will severely impact the taxi industry, a transportation service that has survived the toughest of times. Should we ask our drivers whether reducing prices would be acceptable? Believe that we'll make more money with cheaper fares? What about implementing surge pricing whenever we want?

Sundays are dead slow. The Walking Dead show has more life than San Francisco at 11pm-3am. It is a hit or miss. One Sunday a driver can make a few hundred. The next Sunday a driver earns $20-$30. This does not account for gas and toll charges. There is no money left to get a timely oil change. Forget about making expensive repairs, because this wear and tear will sink you. Uber receives 20% of all fares, including a $1 safe ride that is making them millions.

The toughest challenge is waiting to get paid on trips given Monday-Wednesday. Drivers are expected to wait 8-10 days to receive compensation for these rides. However, clients are charged right away and Uber may have access to these funds to make business decisions. It is apparent that drivers are without this money. They want to drive Monday-Wednesday, but invested heavily into the previous weekend and must wait until Thursday to get paid for rides given the previous week.

Again, Sidecar wins here. They make trip earnings available after 4 days. Drivers can request money whenever any amounts are available to transfer into their bank account. Even though Sidecar deducts 20% commission, it seems that drivers make good money on their platform. They recently offered a commission kickback to drivers who made pickups and drop-offs in a busy Golden Gate park music event. Furthermore, Sidecar holds ride contests on random weekday and weekend promotions to reward their drivers. There is always a new driver and rider promotion available. On a monthly basis, Sidecar holds a contest to give one lucky Sidecar rider free rides for a year.

How can Sidecar drivers earn more? All riders are required to input pickup addresses and destinations. There is not much downtime locating the right directions. Riders are ready to go. Go out there and give 100 rides on a weekend (get 1.5 credit per ride during peak hours), and make a $250 bonus on top of earnings after commission. See trip earnings faster. Have control over the payment submission process. Control the surge. Ask a price between 1-5X. On New Year's Eve, Sidecar drivers will make a bundle with Uber surge pricing going through the ceiling. Sidecar drivers can control their price multipliers, as well.

Sidecar has fixed the problems that once resulted in poor earnings. There is endless business on the Sidecar platform. See for yourself. Drive on the Sidecar platform and measure this against UberX. Which ride platform is earning you more money?

On the UberX platform, only 60% of clients are inputting addresses. Clients search for their directions, delaying the trip even longer after a 10 minute waiting period. They want to go into a fast food drive-thru, which only only charges the standard $.26 per minute. Drivers are requested to travel to stores and wait. In good trips, UberX drivers are making $1.30 per mile and $.26 per minute. If all UberX drivers are going is waiting, then all they are earning is $.26 per minute. Again, money is lost. Reducing prices is influencing clients to use these ridesharing services as a chauffeur service. Don't even get us started on the extremely low prices in Southern California. For the most part, clients are gaining a lot and drivers are losing out.

Evaluate your earnings. Don't forget what you invest into ridesharing. Drive when it is worth your time, instead of driving daily and wasting time, gas and deteriorating your vehicle. You, as a driver, are going to pay in the end. Your personal vehicle is bound to fall apart. Ridesharing is intended to serve as a short-term solution to balance your finances. The longer you drive, the more you stand to lose.

Want to know what you can earn in a week driving 36 hours? This snapshot is a breakdown of what is expected as a UberX driver in San Francisco and the East Bay. San Francisco driving is brutal on personal vehicles; these bad roads, traffic, steep hills, parking tickets, taxi and bus only turns that may result in fines, in-city driving and poor gas mileage, clients damaging vehicles, vomiting, and all things that go in while ridesharing is not substantial to make a good living as a ridesharing driver.


How much you will see after $1000 in fares

Drawbacks of Ridesharing


Still want to perform ridesharing services? Interested in driving rude and drunk people? Like to wait 8-10 days to be paid out for fares completed on Monday-Wednesday?  What was once a great platform is now mediocre in earning potential. Recent hourly guarantees were not matched twice. The last time Uber matched a particular driver for making less than the hourly earnings was on Pride Weekend. 

Join Uber as a Partner and give rides on UberX. Be smart to drive when it is busy. Don't go out on a Sunday night or a weekday night and lose valuable gas. Happy Ubering for minimum wage! 

***You can make money driving on UberX if you devise a strategic plan make every moment count on the road. Then, you can actually make driving a lucrative full-time and/or part-time job/career.***