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Tuesday, January 13, 2015

Ridesharing driver stranded at home with no money to drive

The recent price competition wars between Lyft and Uber hurt the bottom line of drivers. These drivers are struggling really bad, which is preventing them from getting on the road to make income.

One UberX driver shared they have no money in any of their bank accounts. They have 10 miles of gas remaining in their vehicle. No gas and/or toll money to drive. Their small direct deposit this Thursday is not enough to cover bills, meaning they won't have any gas to drive Tuesday-Thursday, or this weekend.

Ridesharing companies are competing to reduce prices far too low. They are also keeping a greater percentage of commission to maintain their revenue.

It is sad that ridesharing companies don't understand that dropping prices to make their services appealing have influenced drivers to drive less. Why do drivers get on the road less? They have no money to afford gas after utilizing the remainder of their earnings to drive the weekend. No cash flow after the weekend translates into no driving between Monday-Wednesday.

Lyft once offered Power Hours to drive during busy hours. This enabled drivers who worked 20-25 hours per week to receive $700-$800 direct deposits. If an UberX driver drove 25 hours and paid out commission and $1 safe ride fees, they will only see $400. This doesn't take gas cost into account.

A driver who drove 20 hours on Lyft paid no commission and earned $736.50. This driver completed 45 rides. Their average rides earned them nearly $20 per trip.



Look at how much an UberX driver earns with the same amount of hours. After Uber commission, UberX drivers see a small payout. Ridesharing earnings have gone downhill. Ridesharing companies are deducting more fees, so drivers are now seeing less of their earnings. These small direct deposits impact their driving, making them unsustainable to survive the financial fallout.


Deduct Uber commission. 22 hours online will make an UberX driver $425. Early in 2014, the same 22 hours of drivers could earn an UberX a significant amount.

The driver below stayed online for 35.4 hours. They completed 74 trips. Because Uber commission was far less, the direct deposit payout for this week was $920. This driver could sustain getting on the road with direct deposits above $700. Little baby checks of $450 and below impact their driving.



Below, 37 trips, 21.7 hours online, an average of $30 per hour, and reduced Uber commission earned this driver a direct deposit of $630. These are ridesharing stats from Spring 2014.  


Early in 2014, a driver worked the same hours as the first image, and made close to $1000 in their direct deposit. $800 in fares after commission and a commission rebate earned them $944. We do have to factor in the high cost of gas during this time frame. Gas reached almost $5 per gallon. It is convenient for ridesharing companies that gas is now cheaper than last year.


We don't see these per hour averages anymore. Ridesharing drivers are not making more money, as these ride app companies promised when prices dropped 15% this past Fall season. The current hourly pay is as much as $10-15 per hour less. What makes this even worse is that ridesharing companies are taking 15% more commission now than before. The drop in pay is nearly 33%.

See the numbers? Terrible, terrible, terrible! No wonder ridesharing drivers are struggling to get on the road. After gas cost and commission, ridesharing is paying less than minimum wage.

8-10 day turnaround on Monday-Wednesday trips is another cash flow problem keeping drivers off the road.

Taxi drivers are defeating ridesharing drivers. Don't let anyone convince you that taxis are losing the battle. Ridesharing drivers are losing the game. The commission, wear and tear on personal vehicles, and gas cost are making ridesharing a business. Most businesses lose money in their first 3 years.

Ridesharing drivers are losing time and money giving rides. At first, ridesharing was appealing to new drivers. Lyft proved this with their Power Hours that paid out 100% of all trip earnings. Lyft drivers kept 100% of their earnings and made $1000+ driving at least 30+ hours per week. As ridesharing companies begin to hook drivers, they start to take more commission, charge for devices, business referral cards, and deduct $1 safe ride fees. Meanwhile, drivers must deduct the cost of gas.

Drivers are left with little profit. Their personal vehicles take a beating. Additional repairs and maintenance costs are required. Tires and brakes wear out faster, which drivers must absorb this cost. Oil changes are required more frequently. The hook is to convince drivers to purchase new cars and used cars under finance plans where car payments can be deducted out of weekly checks.

In the next 3 years, the heavy city driving will destroy this $22-$30K vehicle. What good is this vehicle with 200,000+ miles of hard driving. We guarantee you that you will drive 100,000 miles per year if you perform ridesharing daily and for many hours. In 3 years, you'll destroy this financed vehicle. Your first ridesharing vehicle will also be deemed worthless.

All this because working whenever you want holds more value than working a regular job. Ridesharing for 10-13 hours on a busy weekend night is worth the time. If you perform ridesharing 60-100 hours per week, you are killing your car and losing money. Ridesharing fares have gone far below their initial launch prices. Ridesharing earned drivers a mint in 2010-2013. Once price competition arrived and ride app companies deducted high commissions, drivers struggled to get on the road.

God forbid your vehicle doesn't breaks down. If this vehicle is all you own and is the only approved car on a ridesharing account, you will be toast. You can't drive just any vehicle. It must be approved. Expensive car repairs and maintenance will do you in. You'll be driving to pay for these expenses.

At least you'll be making gas stations, ridesharing companies, dealerships, and mechanics rich. You won't last long driving 60-100 hours per week. In a matter of time, you will be grounded at home like many drivers are because of high commission, less earnings, and broken vehicles.

Smart drivers won't drive just whenever. They develop a plan of action to take the road at busy times and in busy areas. Before, drivers could drive whenever and wherever. The incentive to drive was there - to make money and pay less commission. It is not there anymore.

Ridesharing drivers will make minimum wage after commission and gas expenses. That is the truth. Don't get too excited about your $500 check for driving 30 hours. Deduct the cost of gas, the wear and tear, maintenance, repairs and other expenses. After driving 30 hours on the road, you will make about minimum wage. There are other things to consider with ridesharing driving.

Now, you know why ridesharing drivers get stranded at home. The high commission, gas prices, and poor payment structure complicate ridesharing. Believe it or not, taxi drivers are the real winners. They are making far more money than ridesharing drivers. Taxi drivers get paid in cash, get tips, and receive credit card fares in 2 days. They can afford to drive many hours.

Ridesharing drivers must wait until the weekend to drive. It takes 8-10 days to receive payments for Monday-Wednesday trips. Ridesharing companies Lyft and Uber charge riders after these trips are completed, but they don't pay their drivers until the following week. How can drivers afford to drive when they have no gas? Poor payment structure, reduced fares, and high commission are killing drivers.

Many drivers struggle to keep their credit in good standing. They're finances are all messed up. They are going bankrupt. Many drivers have stopped paying their bills. They can't afford to make repairs.

Is flexibility to work whenever you want worth this risk? If you attempt to survive as a ridesharing driver based on listening to ride companies, you are misinformed and believe the lies and deception. Drivers are not making more money than before these recent price reductions. There is no more business now than before. More clients are not requesting rides. To be honest, there was a huge amount of business until Uber offered the 25% rebate this past Summer.

Currently, rides are tough to get. Drivers are parking in store lots for up to 60-90 minutes to receive a ride request. It was never like that before. Clients are not taking surge trips because Uber is teaching them how to not take these trips. Drivers depended on surged rides to make money.

Poor cancellation policy allows a client to cancel without paying a fee on the first time. These clients cancel rides after drivers travel 20-35 miles to pick them up. They do it after 28 minutes. This bad cancellation policy remains in effect. Drivers are losing money being professional. They communicate with these clients to pick them up. These clients take taxis and don't cancel. Unfair? Very unprofessional and disrespectful to cancel rides after hooking drivers this long.

Uber and clients are winning. One group (clients) saves money, while another (Uber) makes money.

Sidecar and Lyft offer bonuses and incentives to drive. Even though Lyft is a heartless ridesharing company that will deactivate your mother from their platform, they still take care of drivers who manage to survive on their platform. Sidecar is a first-class ridesharing company that treats their drivers and riders fairly. There is a perfect balance between these two parties.

UberX drivers enjoyed driving on the ridesharing platform from its launch up until this past Summer. Once the $1 safe ride fee went to Uber, commission increased, prices dropped (September 15, 2014), equipment charge applied ($10 per week), and additional fees to order business cards, drivers saw less of their earnings. They struggled to get on the road, and started losing money. Cheaper direct deposits began to affect their finances. A slow New Year's Eve, unlike the previous year, doomed them.

Lets be 40% cheaper than taxis. Let it be known that we are the cheapest ride in town. Shuddle will be charging taxi prices to transport children. Their drivers will make $40 per hour. Taxi drivers will see $30+ an hour after all expenses are paid in full. No wear and tear on their personal vehicles.

UberX drivers are losing bad. No tips. No tipping in client app. High commission. Data fee charge. Fees for business cards. $1 safe ride fee. How in the world do UberX drivers last? Sustainability is impossible.

Research ridesharing before making any decisions to perform ridesharing services. Drive at busy times, don't fall into the trap of thinking that reduced prices will create more business. More business of $5 rides won't make you money. That is a common ride on Saturday night in Downtown San Francisco - $5-$7 rides. Drive smart to survive as a ridesharing driver.