Uber and Lyft pay

[civvver]

I stumbled across this article on one of my feeds and thought, wow $19 an hour to drive for uber is a pretty good deal. Until I read the details.

https://www.businessinsider.com/uber-lyft-driver-how-much-money-2019-10

The headline is total click bait. First the guy got a flat while driving that cost him $400 to fix for some reason, so really he was negative for the week.

Second he grossed $257 for 13-14 hours of work. But it's 1099 pay so he has to pay a higher tax rate for fica which is about 9% higher. So right off the bat you can reduce that gross pay to $233 to offset the higher tax rate.

Then he listed his gas expenses, drove 291 miles, 5.75 gallons of gas (it's a prius) and spent about $13. Which he didn't deduct. But going beyond that, a prius is a very efficient car and he's not depreciating or calculating car maintenance rates for for the almost 300 miles. Every car is different, but to me the best way to get an all in one number is use the car milege reimbursement rate. This is the rate set my the government that employers must pay employers when they use their personal vehicles for work. It includes fuel costs, car depreciation and maintenance all rolled into once nice average number. It's current 58 cents per mile. So applying that rate the 291 miles costs the average driver $168 in car costs.

Overall if you subtract the higher taxes and car reimbursement rate you end up at $65 for 13.75 hours of driving, or about $4.75 an hour. Way lower than minimum wage and way lower than contractor minimum wage. Add back in the tax money and the wage is $6.42 still far under contractor minimum wage.

There's no way I would ever drive for them considering you have to bring your own vehicle. It's a total racket and I'll bet most drivers don't calc in the car cost. In fact looking at these numbers they might even have a potential lawsuit to file for getting paid less than minimum wage on average.

 

[Lexicus]

There's no way I would ever drive for them

Do you use Uber or Lyft?

 

[Zelig]

Yes, you're essentially getting paid a pittance for your time to trade equity in a vehicle for cash.

 

[hobbsyoyo]

California is passing a law which will require rideshare companies and potentially other gig-based companies to classify their employees as actual employees and pay them minimum wages and benefits.

 

[Narz]

In Panama you can get a 10min Uber for about $3, I have no idea how they make money.

As a former driver it's only really worth it during surge hours. I did make about $300 in 5-hours on New Years (from midnight til 5am)

 

[Zardnaar]

Dated a lot lady once and her parents were taxi drivers.

They could make good money but most of it was over 4 days.

Here they drive Toyotas and Nissan's for the most part.

Refuse to use Uber. Only way I would if I was traveling in a foreign country.

 

[MaryKB]

I would imagine leasing a car might be good if you're driving for Lyft or Uber ... you have relatively low monthly payments, you often get all your maintenance included, and you turn your car in after a few years. So you basically just have your lease, insurance, and fuel for expenses.

I always tip 25% (or minimum of $5) when I use an Uber.

 

[Zelig]

You've got a km limit when leasing, so it doesn't really help to get your per-km costs down.

 

[hobbsyoyo]

You've got a km limit when leasing, so it doesn't really help to get your per-km costs down.

Yes and it's quite a steep penalty to go over.

I had one Uber driver who told me that the company is trialing a new program where you rent a vehicle from them for use while driving. He was quite fond of it and said it helped him out of a jam when he was out of work and without a car.

 

[Birdjaguar]

I stumbled across this article on one of my feeds and thought, wow $19 an hour to drive for uber is a pretty good deal. Until I read the details.

https://www.businessinsider.com/uber-lyft-driver-how-much-money-2019-10

The headline is total click bait. First the guy got a flat while driving that cost him $400 to fix for some reason, so really he was negative for the week.

Second he grossed $257 for 13-14 hours of work. But it's 1099 pay so he has to pay a higher tax rate for fica which is about 9% higher. So right off the bat you can reduce that gross pay to $233 to offset the higher tax rate.

Then he listed his gas expenses, drove 291 miles, 5.75 gallons of gas (it's a prius) and spent about $13. Which he didn't deduct. But going beyond that, a prius is a very efficient car and he's not depreciating or calculating car maintenance rates for for the almost 300 miles. Every car is different, but to me the best way to get an all in one number is use the car milege reimbursement rate. This is the rate set my the government that employers must pay employers when they use their personal vehicles for work. It includes fuel costs, car depreciation and maintenance all rolled into once nice average number. It's current 58 cents per mile. So applying that rate the 291 miles costs the average driver $168 in car costs.

Overall if you subtract the higher taxes and car reimbursement rate you end up at $65 for 13.75 hours of driving, or about $4.75 an hour. Way lower than minimum wage and way lower than contractor minimum wage. Add back in the tax money and the wage is $6.42 still far under contractor minimum wage.

There's no way I would ever drive for them considering you have to bring your own vehicle. It's a total racket and I'll bet most drivers don't calc in the car cost. In fact looking at these numbers they might even have a potential lawsuit to file for getting paid less than minimum wage on average.

The $.58 per mile government reimbursement rate is not a true cost. It includes lots of things no car owner pays any attention to or actually spends. On a cash basis his cost was $13 for gas. For tax purposes, if he itemized or files a schedule C (small business), he could expense the $.58 per mile rate and reduce his taxable income. In the real world he made over $200 in revenue. he would just need to set aside 25% or so to cover his later tax bill.

 

[Zelig]

The $.58 per mile government reimbursement rate is not a true cost. It includes lots of things no car owner pays any attention to or actually spends. On a cash basis his cost was $13 for gas. For tax purposes, if he itemized or files a schedule C (small business), he could expense the $.58 per mile rate and reduce his taxable income. In the real world he made over $200 in revenue. he would just need to set aside 25% or so to cover his later tax bill.

I do analytics for a fleet leasing company with many thousands of vehicles, and $0.50/km is pretty realistic for the true cost of a vehicle.

I personally drive an econobox and do much of my own maintenance, and I've still only managed to grind my costs down to around $0.20/km.

 

[Birdjaguar]

I do analytics for a fleet leasing company with many thousands of vehicles, and $0.50/km is pretty realistic for the true cost of a vehicle.

I personally drive an econobox and do much of my own maintenance, and I've still only managed to grind my costs down to around $0.20/km.

You may be right from a formal accounting standpoint, but true cost is not really a part of small business expense calculation. Cash flow is more important to survival. For tax purposes you want high expenses, especially ones that don't involve spending actual cash. Depreciation is a wonderful expense because it doesn't cost you any cash. Fuel you gotta pay. Persoanl cars doubling as a business car with Lyft is not the same as a fleet car that uses accounting to drive its corporate tax strategy.

 

[Commodore]

You've got a km limit when leasing, so it doesn't really help to get your per-km costs down.

I don't know the details, but some car dealers around where I live advertise special lease deals for Uber drivers.

 

[Zelig]

You may be right from a formal accounting standpoint, but true cost is not really a part of small business expense calculation. Cash flow is more important to survival. For tax purposes you want high expenses, especially ones that don't involve spending actual cash. Depreciation is a wonderful expense because it doesn't cost you any cash. Fuel you gotta pay. Persoanl cars doubling as a business car with Lyft is not the same as a fleet car that uses accounting to drive its corporate tax strategy.

Well sure, that works for a few years until you've converted the value of your personal car into cash, at which point you have a big cash-equivalent outlay for a new car.

You might be better off just selling your car for immediate cash, buying a beater, and then flipping burgers instead of driving for Uber.

 

[innonimatu]

In Panama you can get a 10min Uber for about $3, I have no idea how they make money.

They don't. The drivers are either managing to game the company's system and surviving, or desperately in denial of how lousy a job they have. And the companies lose money every year. The wonders of debt-supported capitalism...you make a loss on every unit but can keep pretending that you'll make up in volume!

 

[Lexicus]

They don't. The drivers are either managing to game the company's system and surviving, or desperately in denial of how lousy a job they have. And the companies lose money every year. The wonders of debt-supported capitalism...you make a loss on every unit but can keep pretending that you'll make up in volume!

It shows that the idea of deregulated markets imposing productive discipline on investment is complete nonsense if nothing else.

 

[Zardnaar]

If I was Uber driver I would use a tidy 5 to 10 year old car.

Let someone else pay for most of the devaluation.

Probably a Toyota or Nissan nothing American.

 

[innonimatu]

It shows that the idea of deregulated markets imposing productive discipline on investment is complete nonsense if nothing else.

Yes. It was a fig leaf for the real goal of creating monopolies for rent-seekers. That is the advertised gamble of these debt-fueled "unicorns" or whatever fluffy name they're called today: control one market even if they have to take losses, and then squeeze it!

The intellectual pretense of competitive capitalism is dropped in the investment pitches, but maintained in the political speech served to maintain the plebs' consent. A good example of doublethink in action! No wonder that these plebs, who are not actually idiots, are revolting against those politics! The system is rotten, it only endures due to an apparent lack of alternatives.
Apparent lack because it was successful at one thing: engendering universal cynicism. Currently that is the adversary to defeat, cynicism.

 

[FriendlyFire]

Its only profitable with very efficient and reliable types of cars
Something like a two year old 1.4L Toyota yaris otherwise when you factor in the cost of the car, repairs and running costs the pay for full time driving is low. Plus it depends on where and when you drive I guess

 

[Zardnaar]

Its only profitable with very efficient and reliable types of cars
Something like a two year old 1.4L Toyota yaris otherwise when you factor in the cost of the car, repairs and running costs the pay for full time driving is low. Plus it depends on where and when you drive I guess

We run a vitz which I think is similar to a Yaris or rebadged.

It was 4 years old when we got it, now 11 years old no real problems with it.

Runs on the smell if an oily rag.

We paid cash to avoid repayments. Afaik cars are a lot cheaper in the USA.

Kia or Hyundai might be another way to do it.