Imagine getting a job in a low-wage environment such as, say, a call center, making $10-12 per hour.
Then imagine that the company you worked for required you to pay and be responsible for your own computer, software, phone, desk, office rental, and all other operating equipment required to do your job. All capital expenses including purchase, maintenance, repairs and depreciation come out of the $10 an hour they’re “paying” you.
Let’s make it even worse. Instead of performing a low-risk job in an office setting, such as a call center, let’s say that this job requires you to engage in an activity that constitutes the most serious risk to death and bodily injury that all of us face in the course of our day-to-day lives – namely, driving.
Instead of the average yearly miles driven of 13,476, you now have to drive 40, 50, 60, 70 thousand or more miles a year just to scrape by.
When you begin to drive for Uber or Lyft to make money, this is what you are doing – you’re absorbing all of the capital expenses of the business, while putting yourself at a hugely elevated risk for death and bodily injury.
In 2015 35,092 people in the United States died from traffic accidents. 2.44 million people were injured, with many of those resulting in life-changing, permanent disabilities. If you were driving the roughly 13,500 miles a year that the rest of us drive, then your risk for these consequences would be average. But since you’re now driving several times that number of miles in your new “job”, you have 3, 4, 5, or 6 times the risk. You’re now taking massive chances with your life and health for that $10-12 an hour you appear to be making.
But you’re not even making that, because you haven’t accounted for the cost of the vehicle, gas, maintenance, and depreciation that come with your new “gig”. You’re responsible for all the capital expenditure involved in maintaining and operating the vehicle.
So how much are you really making after all of the expense is taken into consideration. How about $2.53 per hour? Let’s have an actual Uber driver, relating his experiences on Glassdoor, break it all down for you:
“I have been in business for myself for over 30 years and started driving for Uber at the behest of my wife and daughter, who thought I would have fun driving for them. I told them that I thought it was ridiculous to treat your personal car as a cab hauling people around with all costs of operation including risk on your own back, then UBER taking 25% plus riders fee as their take for virtually doing nothing except us… ing their software. A truly incredible business model though…..for them to get rich, not you….ever. No one was ever able to explain to me if it actually made dollar sense to drive, so I took a one month part time challenge driving 70 hours total on some weekdays and some weekends. Don’t believe the liars who say they make $1,500 a week or more. They would have to work non-stop to even come close, and even then, the other costs that Uber takes and the cost of maintenance, insurance, gas, etc. would make that evaporate. Based on AAA costs of operating a motor vehicle for a mid-sized four door sedan driving 20,000 per year (you will double that with Uber) the cost is at $0.48 per mile which includes gas, maintenance, insurance, depreciation, financing (unless you own outright) tire wear and tear, and several other factors. I did long airport runs and short city runs (longer runs make more $) and drove 2,142 miles over 3 1/2 weeks in April 2016 making a total after Uber cuts of $1,076.82. The AAA based that $0.48 on $2.85 gas which is more like $2.00 now, so take that into account now which would put operating costs today at 30% lower for FUEL ONLY and not the other expenses, so let’s put it at $0.42 instead of $0.48. This is pretty simple math, so look at the facts. Instead of $1,030 cost to operate at driving 2,142 miles it will be $900 because of $2.00 gas. I made $1,076.82 before taxes and my operating costs were $900 giving me a net total of $176.82 for 70 hours of work. Now my car is paid off and will have lower depreciation, but that is about $2.53 per hour after expenses if your car is newer and not paid off. They tout you can make $16-$20-$30 an hour. In the REAL world you are actually making $1.60-$2.00-$3.00 per hour. I hope this helps people who have never been in business and who UBER and LYFT and any other companies out there that take advantage of others to get rich. These people will win in the end though and will be laughing all the way to the Bahamas when the scam runs to the end. Hope this helps anyone who does not just want to do this for fun, but thinks you can pay your bills with this ‘job’.
Advice to Management
No advice to management, you don’t need it. You have already developed a cash cow that uses people and their assets up until they are no use to you anymore with new ones replacing them daily. You treat them as employees under the guise of independent contractors getting your cake and eating it too. The scam will end some day but I’m sure you will be hiding in the Bahamas with your billions. Yes, you know that already”.… [Bold and Italics mine]
As you can imagine, turnover with Uber is enormous, which is why they need to keep recruiting new suckers to drive for them. They’re just biding their time until they can take over the roadways with their driverless cars. Don’t fall for this scam.