So, you’re thinking about becoming an Uber driver huh? Wondering how much you can really make huh? Nothing reminds me of what ride-sharing pay is like quite like the infamous song ‘Magic Carpet Ride’ by Steppenwolf.
Let’s jump on the carpet and help you find your way.
Uber and Lyft Drivers Are ‘Divided’ On the Subject of Compensation
Depending on whom you ask, Uber drivers either make little money or are rubbing the genie bottle. In one popular Washington, DC Uber facebook group, there are constant posts from drivers about being, “ripped off,” and “robbed,” by the evil sultan Uber. Then, sure enough, in the same group, other drivers are making posts like this below:
So what gives? Why does one side seem to think there’s JFK grade conspiracies going on and no money to be made, and another side thinking the sky’s the limit? Is there really a magic lamp only given out to some drivers? Why is it that one side believes they are being ripped off, but you see very little talk from them of finding an income replacement? Why do they rush down to Uber hubs with any deactivation and write long rants about how they need to “get back to work asap.” Not exactly actions of people who want out of Uber driving.
So why and how is there a gap? Let’s look at the minimum wage possibility first:
Drivers Making Minimum Wage
So why would, as Aladdin would put it, people really do “All this for a loaf of bread?”
Despite reports that drivers made up to $40 an hour, NYC had a class action lawsuit and now must pay drivers’ a minimum wage, so indeed some are making little money. Some sources such as a Princeton report state drivers make almost no money. Recently, there was even a nationwide Strike against Uber the day before they launched their public offerings, with drivers all over citing they were making minimum wage.
Other reports say elsewise. According to Indeed.com, drivers make $21.73 on average in Maryland. Alivia.com has it higher with $40,144.00 a year at 30 hours a week. Other areas are even higher like Austin, Texas at $43,742.00.
In some markets, it is easy to see how one could feel like they are making minimum wage and indeed many are. Many drivers in small towns consistently write how Uber is not profitable at all, and many wrote this even before there were rate cuts. There’s just not a lot of people taking Ubers in small towns. In other areas, drivers complain they did once make really good money, but now the areas are saturated with drivers so they don’t make as much.
Drivers Making More Than Minimum Wage
As Jafar said in Aladdin, “Things aren’t always what they seem.”
A number of other local DC drivers we talked with said they can easily make $1300 a week driving no more than 45 hours a week. Many stated they make over $1000 just on weekends alone. They cite it’s all about being savvy of when and where you drive. Uber offers a lot of consecutive pay incentives for completing 3 rides in a row during rush hours for example, and you can cap on these if you keep destination mode on in the app. They also give bonuses to drivers who complete a certain amount of rides each week. As well as surge prices that can be tacked on if there’s a large local event or lack of drivers in an area, which is almost every day in DC during rush hour. There’s also premium way to pick someone up at a slightly longer distance by a certain time. It’s about capping on these rides several cited. It’s like hocus-pocus at rush hour, one even said.
Another local driver said, “I honestly feel the sky is the limit of what you can make. Professionalism, time spent driving and also finding the right areas to drive in. Any job where tips are accepted means you have potential to increase your income all on your own.”
“If you look at who was striking for more money, it’s the same people talking crap about their riders for wanting something simple like the window rolled down or a different radio station and the driver refuses.”
One argument is if you just look at Uber overall income, then yeah, maybe drivers are making low pay with just that. However, as one driver said, no driver just does Uber. There’s endless ways to make money all day long, many drivers cited. A number of drivers cited they simultaneously drive for Lyft or Via, run food deliveries, and many also package deliveries. The secret, many said, is having something going on all the time. Don’t sit around waiting for rides, be pro-active, one driver said several times, Keep all the apps on.
Drivers Maximize Income Opportunities With Other On-Demand Jobs Like Uber
- Driving for Lyft
- Driving for Via
- Uber Eats
- Amazon Flex
- Post Mates
All these eco-gigs often have good referral bonuses, recruit like crazy, and some drivers are like Aladdin yelling, “Let me share this whole new world with you.” They heavily recruit family and friends for extra income through referrals.
Tips also can increase a driver’s income 10% or more.
Driver Earnings, Fees and Uber’s Cut
The way Uber pays is almost like piece-meal work. You get a ping on the app, and accept it. You drive to pick the person up, pick them up and drive to their destination and drop them off. Within minutes you get notified of what your earnings are through the app. Drivers are paid time + mileage so depending on where the market is they get an exact figure based on that, plus a very small base rate. There is also ability to make more money based on car types:
- If you have a nicer car, you’ll get slightly more mileage through UberBlack.
- If you have a larger vehicle, you can make more money with UberXL.
- And now Uber has released Uber Comfort given drivers a slightly higher fee if they have a lot of leg room.
” I looked Around,
A lousy candle’s all I found”
Steppenwolf, Magic Carpet ride
If you go into any Uber discussion group within an hour you are most likely to see a post from a member venting about how Uber is ripping them off by taking a good chunk of the fare.
These are often accompanied by pictures showing the entire fare the driver paid. Backlash comments almost immediately ensue with, “This is what you signed up for,” or “Didn’t you read your contract? You get paid time and mileage that’s it.” Then a backhand swing from the other side with “You don’t understand what it was like,” and “When I signed up it wasn’t like this.” Almost every time, these are observed being between full-time drivers and part-time drivers.
Once Upon a Time, Rideshare Drivers Made a lot of Money Driving for Uber
At one point, apparently, Uber was very lucrative for drivers. OG (short for original gangsters) drivers talk about days of driving 30 hours and making 1200.00. Rates were up to $1.80 a mile for at one point, and in DC area and many other places it’s now .60 cents a mile. A lot of the outrage is about this reduction, which occurred over 2 or 3 rate cuts in the last 3 years, and now drivers are saying they have to work longer hours to make the same amount of money. Not one driver we interviewed said the money isn’t there, they all said just you have to work more hours. So the ability to make money hasn’t dried up, just the time it takes to make it has increased. However, at the same time, reducing rates almost doubled Uber’s business so it opened up a lot more position for drivers.
Some cite that the drivers aren’t making a lot of money because of a saturated market. This is probably true, there’s a ton more drivers out there now because of the demand. However, no study could be found that this is why there’s decreasing driver pay.
Driving for Uber Part time Versus Full Time
There is a general consensus among the full-time drivers that if others would just get on board, they could all do one great big strike and force Uber to increase the rates again. There’s argument after argument about this topic in Uber forums, with name-calling such as “UberSpy” or “Uber Snitch” if you don’t side with more striking. It has even escalated into threats like this:
There is a general consensus among the part-time drivers that Uber is not meant to be a career. They state there isn’t guaranteed pay, no benefits, and no guarantee you’ll be working tomorrow. They continually told me they don’t have problems making money out there, and many pointed to arguments of why some full-time drivers make low wages. What are some of them?script async src=”https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js”>
Reasons Full Time Uber Drivers Are Not Earning As Much As They’d Like
Rental car programs
At 200-300 a week, one definitely has to drive a lot more to make up money past the tool of the trade.
Many believe your energy gives off in the car. If you’re negative, you won’t be tipped well. If you’re positive, upbeat, and pleasant to customers, you’ll earn more with tips. There also seems to be a number of people who don’t accommodate riders, they cite it’s their car and they aren’t going to wait for drivers to run in a store and back, aren’t going to lower the radio volume, aren’t going to take directions from a rider, aren’t going to turn on the A/C, and some of them have been known to put riders out of their cars over requests of these things.
Lack of Strategy
A common argument is that some drivers don’t know how to make money. They don’t know where to go, what times to go, and drive around aimlessly. Some drivers state that going to airport is a big mistake cause you’re often sitting around for 1 or more hour waiting for a ride, only to get a short payout. Others swear by the airports saying that’s where they make their money.
Gas Guzzlers, Older cars, not keeping up with maintenance was another reason some drivers said others don’t make money.
Dirty cars, vehicle noises, bad hygiene.
They cherry pick rides, calling ahead to see where people are going and cancelling if they don’t like it. Cancelling cause someone has 5 grocery bags at a grocery store pickup. Cancelling because the ride is an hour away or two blocks away.
Poor Driving Skills
Slow drivers or fast drivers very often are reported to Uber and giving low ratings.
We actually wrote an article that received quite the polarizing treatment. We covered the subject of how Uber classifies their drivers, explaining “The Secret to Why You’re Not Earning As Much As You’d Like and How to Change How Uber Tiers Your Earning Potential“. If you’re curious about how Uber grades and rewards you, be sure to give this a read.
Uber Likely Will Not Increase Driver Pay Under the Current Circumstances
One thing for sure, there really isn’t any money to pay drivers more unless they were to raise the rates up. It’s also very unlikely they would do this for two reasons.
(1) Uber doubled their business dropping rates in the last two years so raising rates would cause a drop in clientele.
(2) This would take away driving positions from many drivers out there. The lower the rates are, the more passengers will take Uber, providing more driver opportunities.
Some drivers feel that Uber should make them an employee then. Is this even realistic with these figures? There’s 5,000,000 Uber drivers in the world, how would they even begin to pay for this?
Uber Service and Booking Fees
One of the most mind-boggling aspect of Uber’s business practices is that they show the entire fare to the driver. No information could be found online as to why they do this, but it contributes to a lot of conspiracy theories among drivers.
Drivers are paid for time and mileage and a base rate, but Uber gets the service fee and the booking fee. Uber is a business. It needs money to operate. It needs money to provide the opportunity and platform for drivers to be able to make money. Quite often, drivers look at the entire fare and think the Service Fee and Booking Fee apply to them. They compare it to what they received and think they are being ripped off.
The way Uber determines a fare for a rider is:
– A small base rate
– Rates estimate on time and distance
– Current demand for riders in the area
Drivers are paid as below, but often think they are entitled to all the money share. Confusion sets in when they see the rider payment much higher. Example below shows the driver’s trip earnings on the left. On the right you will see the amount paid by the rider is slightly higher.
Each ride also incurs a booking fee, and service fees. But what does the service fee and booking fee go toward?
• Background Checks
• Airport Taxes
• Business Taxes
• 12,000 Uber Employees
• Driver Referrals
• Consecutive Trip Pay
• Weekly Quests
• Business Operation Costs
• Driver insurance
So What Are the Real Figures? How Much do drivers make?
The variables are so different it’s hard to tell. Some drivers, for example, have vehicles that are paid off. Others are leasing. Some are making payments. Leasing cancels out the need to have insurance and maintenance, but at a higher cost. Some drivers are mechanics, some sell insurance. Each situation is unique.
We conducted a poll of a number of drivers in the Washington, DC area and found this:
A lot of the deductions are not payable to the IRS because they can be deducted as expenses so the reality is income is more “gross,” than “net.” Most we talked to owed no taxes at all last year. Not quite minimum wage in the DC Area. But one can definitely see a major drop in income if they were to rent a vehicle at $250.00 a week.
Can You Make the Uber Rideshare Game Work for You, Driver?
In conclusion, it’s what you make of it. Gone are the days of the past, but one can still make a good chunk of money. If you jump on the carpet ride, just don’t have any real expectation of becoming the next millionaire though. It’s definitely not something to recommend for full-time work, unless you’re committed to the hours the work requires. Also consider you’re losing a lot more money renting a vehicle. But it’s still a fun, fantastic adventure either way.
As the Genie says, “Thank you for choosing the Magic Carpet for all your travel needs. Don’t stand until the rug has come to a complete stop. Thank You. Goodbye now.”