Subject: DriveUberForMinimumWage ?

Date: Wed Mar 1 21:38:08 2017
User: RogerB
Message:
Just noticed that player's name, and got curious. Most Uber drivers make much LESS than minimum wage, and many are loosing money without realizing it. When they get to the end of the year and figure up their taxes, they find out that their expenses are more than they took in. The good news is that they won't have to pay any taxes out of the money that they didn't make, but they wasted a lot of time and put thousands of miles on their car, and now don't have any money to replace that car. If someone can DriveUberForMinimumWage, they are doing pretty good!

Date: Sat Mar 11 12:45:10 2017
User: sprucegoose
Message:
What! A big corporation is taking advantage of their "employees?" in this case the deferred maintenance of their vehicles? Like college kids who do this delivering pizza....

Date: Sat Mar 11 15:08:17 2017
User: outskirts
Message:
Or delivering newspapers, like I did.

Date: Tue Mar 14 11:00:21 2017
User: hotnurse
Message:
My son jumped through all of the hoops to get his Uber "license". He worked literally one night and said that he would never do it again. He had numerous riders but, for the amount he made, he had to put so many miles on his one-year old Mini Coop that he figured it was not worth the hassle. The only good thing about Uber is that to be a driver it takes a lot of investigation and paperwork (on-line) and a thorough background check.

Date: Tue Mar 14 20:53:12 2017
User: Frederf
Message:
I know some Uber Drivers that are making good money. I have used Uber and talked to the driver about compensation they have all said it was good. i even talked to a taxi driver while in his cab about Uber he said when he is not driving cab he does Uber and makes more sometimes at Uber than the taxi.

Date: Tue Mar 21 20:14:55 2017
User: RogerB
Message:
It just all depends. SOME drivers still make good money, but many are actually loosing money without realizing it! Uber advertises that drivers can "make" $20 - $30 per hour or more. ACTUALLY, they can GROSS that much or more, if they are good and depending on where they are driving. However, they will be driving at least 25 - 50 miles/hour to gross that much. When you deduct $0.54 per mile - for all the miles driven - to pick up a rider and then back, after dropping the rider off - not just the miles you are getting paid for, that $20/hour becomes $5 / hour OR LESS! It is also very easy to LOOSE money. If you drive more miles to pick up the rider than the distance the rider pays for after he is picked up, the driver is LOOSING money big time!. The ride the driver gets paid for needs to be AT LEAST five time the miles that are driven to pick up the rider, to avoid LOOSING money. This is based on a fare of $0.75/mile (UberX fare) for Indianapolis, IN - where I drive. This is similar to most large cities, and and economically priced car getting good gas mileage. This is what the IRS bases the allowable $0.54/mile deduction for business mileage. This covers gas, maintenance, and DEPRECIATION that the miles driven puts on the value of the driver's vehicle. The new Mini Cooper mentioned above probably costs more than twice that much to drive! That driver was smart, and figured out the facts very quick. I started driving for Uber 2 years ago. At that time, I was driving for a fare of $1.25 / mile. At that fare, it was possible to constantly make $15 - $30 / hour (PROFIT - not GROSS). Since that time, Uber has lowered the fare to the point that the driver's share of the fare (75% - 80%) is now BARELY more than the cost of driving an economical vehicle. In order to make any money now, a driver must drive ONLY when there are surge fares in effect ( an increased fare multiplier based on high demand), or guarantees or "Boost" fares that increase the amount paid / mile. It is also necessary to keep pick-up or unpaid miles to less than 25% of the paid miles, unless the surge multiplier is really high ( 2 x the base fare, or greater). I used to drive 30 - 60 hours / week and made good money. I now drive only 15 - 20 hours / week on Friday and Saturday nights, when it is still possible to make fair (not good) money if you are very careful to avoid rides that will loose you money. Ironically, while writing this, I just received an email: "Invite a friend." "Take home $150." "Invite friends to drive with Uber and earn an extra $150 when they complete 30 trips. " That's another way for Uber drivers to make money, but what will happen to that friendship when the friend tries it out, and finds out how easy it is to loose money!

Date: Wed Mar 22 13:42:52 2017
User: joeygray
Message:
Hey Roger... I know this might make me a pedantic boor, but the word is "lose", not "loose". As for the content, well, I thought at first nah, 54¢ a mile cost to drive your car is really the problem here, that estimate has got to be wrong. But no. AAA calculates, based on a bunch of factors, that the real cost is around 74¢ a mile, and so if anything, the situation for Uber drivers is even more dire than you say. It's just that drivers have already invested most of that money upfront, in buying the car and signing up for and prepaying the insurance, so they don't realize it.

Date: Wed Mar 22 15:03:08 2017
User: jimmyp
Message:
"Real cost" is an average cost, which includes fixed costs that would exist regardless of whether you drive Uber (insurance, excise taxes, depreciation that is due to aging and not mileage). The linked article (which is 10 years old, but uses a gas price of $5/gallon) says the marginal cost (which is what we should care about here) is only $0.23/mile.

Link: Marginal cost of driving

Date: Thu Mar 23 00:18:04 2017
User: joeygray
Message:
Thanks jimmy for that point. I'm not convinced about the 23¢ which seems to be based on some dubious assumptions like maintenance costs being the same per mile whether you drive high mileage or low mileage, or whether insurance rates are the same whether you drive for business or just for your personal transportation needs, or whether a Prius is a good example for this kind of calculation, or indeed whether an uber-for-a-living car can be chosen on the same basis as a personal car. But I certainly do agree with you that some sort of marginal cost less than that 74¢ I quoted should be used.

Date: Thu Mar 23 11:55:41 2017
User: outskirts
Message:
Would you want a two year old car with 200,000 miles on it?

Date: Thu Mar 23 23:07:19 2017
User: joeygray
Message:
Yeah, that too. Depreciation is definitely higher on high mileage per time period cars. Always a red flag for me when I'm considering purchasing.

Date: Fri Mar 24 14:11:11 2017
User: jimmyp
Message:
I did some more searching and actually found a meta-study that suggested that people completely discount mileage-based depreciation when evaluating whether to make a trip or not. There were about 30 or 40 other studies that estimated a cost of between $0.08 and $0.75/mile, with a median (eyeballing it) of about $0.25/mile. I just went to kbb.com and priced a 2 year old Camry with an average number of miles on it ($19755), then added 1000 miles to it and the price dropped by $40 ($0.04/mile). (I added 20 000 miles to it and then the price dropped by $0.07/mile, so perhaps if the mileage is significant, there is a higher rate.) But I also priced a 2014 Camry (same model) with that same number of miles on it, and the price dropped by almost $4000.

Link: Depreciation study

Date: Mon Mar 27 12:37:50 2017
User: RogerB
Message:
I used $0.54/mile ($0.535/mile this year), because that is what IRS allows us to deduct for business mileage. That is an average - granted - but if IRS allows that, you better believe it is fairly accurate, and for many, with higher priced vehicles and those not getting the lowest gas mileage, it could be much higher. Maintenance costs (Tires, brakes, oil changes, etc.) are a lot higher on cars that are being driven a lot of miles each week. The biggest cost, however, comes when a major repair or replacement becomes necessary. When this happens, if the previous vehicle isn't paid off yet, that becomes a major problem. Many new drivers don't realize that most of that money that is going in their bank in each week is actually coming from cashing out the equity of their car.

Link: https://www.youtube.com/watch?v=2GKfHWSmlSg

Date: Mon Mar 27 13:02:39 2017
User: joeygray
Message:
Yes, but understand that Jimmy's argument (marginal cost) is that you really only lose that whole 'real cost' amount if the alternative is that you wouldn't own the car at all if you didn't drive uber with it. For the vast majority, dare I say ALL uber drivers, this isn't so. (I bet nobody without a car considers driving uber for one second.) You are going to be suffering some of those costs, of course agree not all of them, whether or not you drive uber.

Date: Mon Mar 27 19:30:20 2017
User: hotnurse
Message:
FYI from my son is that *many* of the riders are too drunk to drive their own cars. Either they know that themselves and call uber or the bartender calls for them. So...who wants a friggin' drunk in their car, whether a nice car or not, and take a chance of them puking or worse?

Date: Mon Mar 27 20:24:56 2017
User: joeygray
Message:
Yeah. There's a bunch of reasons why I'm not as rose colored about it as Jimmy is, that's one of them. Another is driver fatigue, which is even more apt to happen under this 'surge mode' paradigm.

Date: Tue Mar 28 18:43:17 2017
User: jimmyp
Message:
Ok, let's add in those costs. Let's assume an accident will cost you $500 for the deductible plus another $1000 in increased premiums. How often do you get into accidents? Every 50 000 miles? That's an extra $1500/50000 = $0.03/mile. Even when I drank a lot more than I do now, I can't imagine that I puked more than once a year, and never in anyone's car. While I agree that a disproportionate share of Uber (or cab) users are drunk, there is "too drunk to drive" and then there's "so drunk you're going to puke in the car". Still, let's assume that there is one puke per 10 000 miles, and that it costs $100 to remove the puke and to compensate you for the lingering smell. That's still only $0.01/mile. It's possible that a warranty will prematurely expire due to the additional miles. Maybe you drive 12K/year otherwise and 10K/year with Uber. For a 5 year/60K warranty, the entire five years would be covered without Uber, while the last 2.5 years would not be covered with Uber. I'm not sure how to accurately price this (NOTE: extended warranties are a ripoff!), but I'll be willing to say there's an expectation of $1000 in repairs that would have been covered under warranty but are not due to the mileage expiration. That's $1000/50000 miles = $0.02/mile. And that's being generous, I'd say. It assumes that the non-Uber driving would use up the miles at the exact point the time is up, and that one of those warranties will actually cover something breaking instead of it being chalked up to normal wear and tear, and that it wouldn't have broken anyway at mile # 80 000 after the warranty is up. Many or most of the costs of owning a car are the same regardless of mileage driven. Most of the depreciation is based on age, not miles. Unless the extra mileage puts you into a higher category, the insurance is the same. Oil changes and regularly scheduled maintenance are going to be at the same number of miles and might even be less frequent because some maintenance is also time-based (if you change your oil every 3 months or 3000 miles and you drive less than 1000 miles a month, your per mile oil change costs will be higher).