Behind the Scenes of an Uber Drivers' Income


(Harry) #1

Until now we have posted several articles outlining what Uber drivers make in reality when compared to what they are promised. In fact, we are witness to around 50% of all drivers quitting within their first year, and this was mainly due to their actual income being well below their expected income. What Uber advertises as $25 an hour income might be true for income, but what they don't mention are the expenses that cut that income by half.

We dissected the income and expenditure and came up with a gross expenditure figure per hour that cut the income down to single figure values. In this article, we will review what Uber drivers make across the US, review a number of income source articles and show a brief income vs. expenditure calculation just to refresh the memory.

Income

"How much does an Uber driver makes?"

An Uber driver makes a standard income; there is no magic in it, the numbers just add up based on key variables and constants. The constant is Uber's service fee which varies from state to state, the variables are miles and hours and surge pricing, tipping is optional, so it is not included in the calculation.

Uber driver income is a standard model to calculate, it is base fare + miles + time + surge + bonuses + tipping. So, let's take a closer look at the income model per city since prices differ in every city.

Chicago: a 2.3-mile ride takes around 15 minutes in downtown Chicago. The base fare is $1.70 and the rate per minute is $0.20, the mile rate is $0.90, and the booking fee is $1.20, so this all adds up to around $8.00. That's the real cost, but in Uber fare estimator it reaches $12 to $14, so let's say that the rider agrees to $14. Take 20% off for Uber's service fee, and you have now only got $10.24 because the booking fee is Uber's and not the drivers.

Now a quick look at expenses, these tend to be the same anywhere, so we take into account all the expenses direct and indirect, and we summarize these at around 20% of the income, which means we are left with $8.19 income for this ride.

Since the ride was only 15 minutes, and we add maybe a few minutes getting to the Pickup location it is possible for a driver to make 3 rides an hour, which would bring in $24. So that's pretty close to what Uber claims in its promos.

Let's look at City-specific data as prepared by SherpaShare, an app that calculates the driver's income is taking into account expenses as well as income per city.

SherpaShare allows drivers to analyses their income with an accurate mileage and expense tracker This little app gave us a comprehensive list of income for the same distance and time ride in different cities, here are the results:

UberX income after expenses and commissions

  • Atlanta $10.34
  • Baltimore $9.77
  • Boston $12.80
  • Chicago $10.24
  • Dallas $9.16
  • Denver $9.36
  • Los Angeles $9.22
  • Miami $11.50
  • Nashville $8.11
  • New York $20.54
  • Phoenix $11.49
  • Pittsburgh $11.87
  • San Francisco $11.72
  • Salt Lake City $10.54
  • Seattle $10.54

Bottom line, there are some fluctuations, but the net income is around $8 to $12 per city with one exception: NYC.

Glassdoor

Glassdoor is a human resource recruitment service that offers insights into the employers and their income. It is collected from viable sources; the employees and the data are presented to potential candidates to use as a reference for the application. Here is a screenshot of the Glassdoor Uber income page.

As you can see, Uber driving income is not as high as marketed online and in reality, when 50% of all drivers stop working for Uber, there has to be a base reason. This reason is mainly real income versus expected income.

When we look Glassdoor and SherpaShare income generated in some cities we see this conclusion being substantiated, for instance, the Uber income in Baltimore is only $0.34 more than minimum wage. In fact, according to us, if the income is only $0.34 more than minimum wage, it means that they are losing money when factoring in depreciation and other expenses. So, in effect, Baltimore Uber drivers are losing money by working for Uber! Or in another way, Uber drivers in Baltimore are paying for the passengers to ride with Uber.

How to make more money driving for Uber

Knowing where to drive is key to success. Hitting traffic is not the worst issue, hitting traffic with no rides is. Going into lull areas and missing surges are terrible feelings and driving around large crowd functions at the wrong time is also a problem. Timing is a key issue and learning how to arrive is as important as learning to drive.

One interesting issue with timing is what time of day to drive. If you are only working as a rideshare driver, then your hours are pretty much your own. You can decide to drive early morning or late night hours as well as drive during rush/peak hours too. Working the so-called early morning quiet hours can be productive, sure there are fewer customers, but then there are even fewer drivers. You will also get those early airport runs, which can be lucrative since they occur daily.

Driving on weekends and holidays is also a good source of income if you are willing to be out and about on Christmas Eve or Halloween.

Driving late at night is a great time to catch all the bar crawlers and frat party goers, and by watching the social media and reading up on local activities, you can find out when a major crowd event will occur.

Once you know when to drive, you will now need to learn where to drive. Sure, you know where the late-night watering holes are, you know where the major crowd events occur, and you know where the airport is located. However, sometimes knowing where an even is happening is not as good as knowing how to avoid the traffic and still get the fares. Finding alternative routes or places to park for pick-ups is as important as knowing where the pick-up might be before they ask for a pickup.

Study the maps and drive around just to learn where and how to get anywhere. Get lost driving around aimlessly noting small side roads and shortcuts through parking areas and gas stations. Sometimes you hit a hidden hot spot, a place that is so far out that no one ever thought to it, but once you arrive on the scene if you also have an Uber light too, you can attract some interesting attention.

Find out where all the distant pubs and bars are situated, it much better working in driver free zones, leaving your co-drivers to deal with highly populated watering holes.

While you might shy away from drunks, it pays if you come prepared. You will find loads of drunk passengers late at night around bars and pubs. Just be prepared for some bumpy rides and be patient. They can prove to be a lucrative focus, a rideshare driver for drunks. Just make sure you have a lot of patience, a lot of towels and cleaning appliances and are not taking on any violent or abusive passenger.

Another group to try and consolidate are frequent flyers. Academicians, physicians, and business people. Try to find central points where you can advertise your services to increase your net passenger list with these travelers. The more airport runs you get, the less you will need to supplement income. Some drivers are known for only doing airport runs.

Once you signed up and got your sign-up bonus, you will need to maintain your lead with a guarantee. These are basic competitions; the more rides you get per hour, the bigger your income. Watch out for the various time-related bonuses, such as hot-spot bonuses and surges. They pay more but have their issues.

Finding hot spots and predicting surges is a major science these days. Most experienced rideshare drivers still haven't got the hang of this. However, once you know where a hot spot or surge will occur, make sure you are there when it happens. If you have to drive there, the probability is that it will have gone by the time you arrive. Don't chase a surge, and remember, there are lots of surge chasers, they end up getting tired especially at night, don't become one of them.

It is always prudent to sign up for more than one company, this way you maximize you passenger pick up rate, you just need to make sure you change apps or have a separate mobile device for each app, so you don't get confused and end up using the wrong app.

Another service you can work for apart from ride-sharing is delivery services. If you are already driving around for income, why not expand your experience and drive for DoorDash too or go to some of the local restaurants and fast food joints that look for delivery driver's notices. Sometimes, when times are slow, you can do a few of these and make up the missing cash.


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