Undercover report: Uber a bum deal for drivers

Uber and Lyft are great services for riders. But for drivers? Not so much.

That’s what Emily Guendelsberger found when she moonlighted as an Uber driver recently. Guendelsberger, a reporter at Philadelphia City Paper, found that Uber drivers are making relatively little money after accounting for expenses and Uber’s cut, face the prospect of having their insurance cancelled in an accident and — thanks to recent price cuts — are having to take more rides and work longer hours to keep their incomes up.

“Driving for UberX isn’t the worst-paying job I’ve ever had,” Guendelsberger said. “I made less scooping ice cream as a 15-year-old, if you don’t adjust for inflation.”

She added, “If I worked 10 hours a day, six days a week with one week off, I’d net almost $30,000 a year before taxes. But if I wanted to net that $90,000 a year figure that so many passengers asked about, I would only have to work … 27 hours a day, 365 days a year.”

Over the course of her investigation, Guendelsberger drove 100 fares. Her gross earnings for those rides amounted to about $17 an hour.

But that was before she factored in her costs. Uber charges a $1 “safe rides” surcharge on each fare takes a 20 percent cut on the rest of the gross charge. And then you have to factor in the drivers’ own expenses — gas, car payments, regular maintenance. Guendelsberger calculated those costs to be about 51 cents a mile. All told, she figured that her net Uber earnings were only about $9.34 an hour.

And that may be understating things. If drivers have higher interest costs on their car loans or less fuel efficient cars than Guendelsberger’s, their costs will be higher. And they face the prospect of having their insurance cancelled should they get in an accident while driving for Uber, if they’ve not taken out a special policy.

Guendelsberger talked with other, more experienced drivers and found they were making more money — but only barely. Two in particular were netting about $10.53 an hour.

The reporter noted that her experience with Uber came after its price cuts in Philadelphia took effect in January. But as she writes, there’s no indication that those cuts are going away. And Uber has an incentive to keep the rates low to encourage more ridership, she said.

Uber attempted to pre-empt Guendelsberger’s report by posting some information about driver earnings on its Philadelphia blog page. While the average Uber fare dropped from $14.71 in December, before the price cut, to $11.43 in March, the gross amount drivers were earning jumped from $16.06 an hour to $20.97 an hour.

But thanks to Uber’s fees and their own expenses, drivers’ pay is nowhere near that high. As Guendelsberger points out in her report, if you factor in those costs, the average Philadelphia Uber driver is making around $11.12 an hour — which works out to be about $22,240 a year if you work 40 hours a week, 50 weeks a year.

Suffice it to say that if anyone’s getting rich on Uber, it’s not the drivers.

File photo: Karl Mondon/Bay Area News Group

 

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  • Numbers_Wonk

    I suggested to a Bay Area Uber driver that he should receive warrants or options in proportion to pay. In these early days it’s still cheap for Uber and a better incentive for drivers, right?

    Travis Kalanick could create an entire nation of highly motivated drivers instead of increasingly grouchy drivers.

    • Jose Mendivil

      What you suggest doesnt bother a nanopeanut yo Travist

  • juneyer saydow

    Uber is just a phone app that links ride requests with ‘independent drivers’. The impending $50B valuation is driven by motivated investors who want to cash in on this trend. This is much like the Internet websites of the dot.com era. Media hype is driving Uber valuation

    Apparently, the driver earnings continue to decline because of Uber’s price manipulations. Anyone who believes that Uber disrupts technology doesn’t understand the worker exploitation that is at the core of their business model. There is nothing good about this.

    Add to this, complaints by cities and countries about shoddy, unsafe service and you have evil technology.

    • Robert Stone

      Uber & Lyft masquerade as “benevolent” companies doing a service for the “community”- what about the drivers, aren’t they part of the community and where is the benevolence to them?

  • Joseph Beers

    If you factor in overtime pay, time and a half after 40 hours, and double time after 60, the hourly rate drops dramaticly. She also forgot to factor in self employment taxs. With a cab the stand fee is fixed so the mor d hours you work, the more you earn per hour. Uber charges more to full time drivers then taxi companies .
    Just ask yourself one question before you take the plunge. Why does every advertisement for Uber for recruiting drivers? If it was such a good gig they would not have to advertise. Also they reward drivers that stay with them lower rates when the saturate a market, lower fares and few trips is not a winning equation for the workers.

  • Joseph Beers

    U
    Break
    Ever
    Rule

  • Joseph Beers

    U
    Buy
    Every
    Regulator

  • Robert Stone

    I drove for Uber prior to the price cut and was making, what I considered, a fair cut of the pie-but after the 35%price reduction, I was angry at the money I was making-especially, for instance, when 4 people got in my car, I took them a few blocks and made $3.00. Last night I was walking by a bar and a woman, who was obviously drunk, was sitting on the ground, in her own vomit, waiting, she said for her ride- I just hope it wasn’t a ride sharing service! These are the perils one faces, while driving for a living, especially if it’s your car. Do you want an individual like this getting in your car and ruining your interior or making it unpleasant for the next customer?

  • Robert Stone

    The cab fees are regulated so that passengers are not overcharged and a driver can make a decent income. Cabs are traditionally relatively expensive because they are a luxury & a convenience. Most working class people get around walking, getting a bus or taking the subway, in cities that have them. If Uber & Lyft would comply with these regulations, it would make them fair competitors and allow the drivers to make a decent wage. Otherwise, they’ll just be portrayed as another dot.com, get rich scheme, that only rewards the owners & investors.

  • Jose Mendivil

    The important thing is that we are helping travis cartel to increase his fortune every nanosecond
    And we are helping travis cartel to depressiate the taxi industry by 80%”with last travis cartel fares”
    And we are helping travis cartel to turn the pseudoriders more and more cheap, frugal, arrogant, rough, cinics, disgusted, classless, shameless, demanding a lot more for a lot less
    So, Travis should be proud of the nice job we are performing with our little and irrelevants sacrifices

 
 
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