Uber’s Billion Dollar Secret Plan

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Uber and Lyft have become a household name, synonymous with getting a cheap ride. If you ask someone how they are getting somewhere and they say “I’m taking a Lyft” you know exactly what they are talking about. Beyond that, however, you probably don’t give a rat’s ass about either of the companies or how they operate.

As a driver, it amazes me the incorrect beliefs that people have about Lyft/Uber, drivers, fares, and how the system works (or doesn’t work). I hope this article finds its way to the mainstream media, so some of the truths about what drivers have to deal with will come to light. Unfortunately, there are a lot of lies surrounding these two companies.

I began driving about 2 years ago, and during that time I have given well over 10,000 rides. Full time driver, 50-70 hours per week for the past 2 years. As time has gone by, I have discovered many ways to become more efficient and earn more while spending less. However, the companies have continued to take more and more from the drivers. To give you an idea of how bad it has gotten, I will tell you that my gross earnings 1.5 years ago were about $1,500 per week. Today that number is just under $1,000. These are gross revenue numbers, and do not take into account ANY expenses, including gasoline (which has gone up 25% the past 6 months), insurance, tires, brakes, oil changes, etc etc. And during this time, I have figured out how to make MORE money, so the numbers should be increasing, right?

Meanwhile, Uber and Lyft continue to promote this “business opportunity” as a high paying gig. Numerous studies have been done by independent groups to determine how much the average driver really makes. The results vary, but one thing that is widely agreed upon by all is that full time Uber and Lyft drivers are in the bottom 10% of earners in the USA. That doesn’t stop the companies from continuing to lie about how much drivers make! I saw a Lyft ad on the internet from a couple months ago that claimed that their drivers get paid $35/hour. Two years in and I can count on two hands the number of times I have made that kind of money, BEFORE expenses.

What about surge pricing?

Surge pricing is the economic solution to an imbalance in supply and demand. It is very common in many industries. Have you ever noticed that flowers are more expensive around Valentine’s Day, or that parking costs more when there is an event going on? Flights and hotels get more expensive surrounding a major holiday? Surge pricing is nothing new.

The idea behind surge pricing is that the drivers are more incentivized to drive into horrible traffic conditions to pick someone up when they are paid more. As a semi-normal human being, I will avoid rush hour traffic. But if you pay me double or triple, I will put aside my frustrations and race headstrong into the gridlock!

In April 2017 both Uber and Lyft disconnected driver pay from what riders are charged. Drivers currently (September 2018) get paid a flat dollar amount per mile and per minute, plus a base charge. The amount varies from market to market. These amounts are completely independent of what the passenger pays. So, a passenger might be paying triple, or might have a free ride, and the driver has no idea because they make the same amount either way. In other words, the surge price is not always passed on to the driver! In many of the markets, the companies have completely eliminated the surge payments to drivers altogether. There are many examples (with proof) on the driver internet forums of passengers who have been charged $100+ and the driver is only paid $20 or so.

So why drive?

Many drive because they have to. The economy is not that great, regardless of what the news reports say. There are plenty of jobs out there, if you don’t mind minimum wage or straight commission. Unless you are highly skilled or know someone up top, it is hard to find a good paying job. I suggest you take a personal poll: ask your next 20 Uber or Lyft drivers if they have a college degree. If so, then why are they driving?

But enough about drivers. Maybe I can help answer a few pax (passenger) questions! I have heard just about every complaint that there is about drivers, and might be able to help explain some common scenarios. Go ahead, ask your questions.

Okay, I ordered a ride, and the driver drove around randomly, then drove away. I called and the driver ignored my call. Why?

Simple – money. Most drivers drive for both companies. If a request comes in they will accept it, but keep their other app on in case a better request comes in. If they get a better request (perhaps a closer ride, perhaps a ride with a surge payment) then they will take that one instead.

Now you are wondering why they didn’t just cancel your ride if that was the case, right? Because Uber and Lyft will punish drivers (by terminating them) if their cancellation rates get too high. So the driver will wait for YOU to cancel. They know that you will get charged a fee, and with a few clicks in the app (on your end) the fee will get refunded to you. No punishment to you, no punishment to them.

When I get in the car, why does my driver always ask where we are going? I already put the address in the system!

Uber and Lyft do not show the address to the driver until AFTER the driver accepts the customer in their car. They do this to avoid drivers cherry picking their rides. If a driver knew that you just wanted to go to the drive thru and back, they would cancel the ride (and so would the next driver, and the next). When the driver pulls up they have no idea if you are going to the airport, or McDonald’s, or the movies, or 10 blocks away.

By the way, when the driver asks “Where are we going”, they aren’t trying to be nosey. They are not looking for you to say Home or Work, they want an answer “10th street, near the hospital” or “downtown Springfield”. They are trying to confirm that you are going to the address that was put in the system, because sometimes it gets put in wrong and they want to take you to the correct place.

Is it just me, or is the quality of drivers going down?

No, it’s not just you. Once again, it boils down to money and the overwhelming greed these companies are displaying. By continually reducing the amount that they pay drivers, they force out people with marketable skills into better paying jobs. The people who take their place are often immigrants who don’t know the area and may have challenges with English (making it harder for them to get jobs elsewhere), retired people, unemployed, or stay-at-home parents. When a driver is less than full time they may not know the city as well. Often times retired folks have challenges driving while looking at their GPS. Unless someone is a full time driver, they may not give you the smooth experience you have come to expect.

Not to say that new drivers or part timers are bad! Every individual should be judged on their own merits. It’s just that I have heard a LOT of horrible driver stories, and they almost always involve drivers that are new to the system (under 3 months) or can’t speak English.

There is no real screening to become a driver. No interview process. Nothing. If you have a good enough vehicle, clean driving record, and almost clean background, you can be a driver. The result? Too many drivers! The companies hire as many as they can, and figure the bad ones will be kicked out eventually with bad ratings. Which brings up another point…

When a driver’s rating drops below 4.60, that’s when the driver is faced with possible termination. So think twice before you give your driver a rating below 5 stars. Were they so bad that you want to get them fired? Because that is what you are telling Uber or Lyft.

Why is my passenger rating low? I don’t understand, I am always friendly to drivers!

This is an easy one. Golden rule – treat others how you would want to be treated. It is more than just a smile and “Hello, how is your day?”

Keep in mind that when you are getting into someone’s car, there is an element of personal space going on. The driver may not appreciate the smell of smoke, body odor, or strong food odors, any more than you do.

Drivers also don’t make very much for waiting, the money is made when the wheels are turning. So making them wait 3-5 minutes for you to get in the car can be frustrating for many people. If it takes the driver 6 minutes to arrive, why in the world do you need another 3-4 minutes to come get in the car? The same goes for drive-thrus. Drivers make so little on the time portion of the ride that many drivers will refuse to take people through a drive-thru or stop at stores. It’s not because they are jerks, it’s because the companies pay the equivalent of less than minimum wage for that idle time.

Many drivers are annoyed by someone who yacks away on their phone or watches videos with the sound turned up during the ride. Compare this to going to a restaurant and having to listen to the guy at the next table talk on his phone the entire meal. Annoying, right?

Each of us have different tolerances for various laws, please don’t ask your driver to break any! You may be fine with driving with an open container of alcohol, or letting your 2 year old ride with no car seat, but your driver may feel quite different about it. Telling the driver that “it’s okay, all my other Uber drivers let me do it” will only make it worse, because that shows that you make it a habit to disrespect your drivers.

Cash is king. Have you ever tried to pay your electric bill with stars and badges? It doesn’t work. The driver is working to earn money, cash tips help with ratings. Tips in the app are great, however the driver is FORCED to rate you before they know that you gave them a tip, which sucks. The rating they give you is based on the assumption that you will not be tipping in the app, even if you say something like “I always tip all my drivers”. Can’t tell you how many times I have heard that, and then no tip shows up later.

When you order a ride for a friend, the conduct of your friend will translate into a rating on your account. If your friend is a jerk, you may get an email warning you to be nicer to drivers. If your friend throws up or spills anything, you will be the one getting charged a cleaning fee.

What about animals?

Some people love animals, some do not. Don’t expect every driver to feel the same way about Fluffy as you do. Animals tend to walk on the ground, and when they get in a vehicle their (dirty) feet should not be walking on the seats. Especially if it is raining or snowing out! The next pax may be wearing a bridesmaids dress, and that dirt that you take for granted will not be appreciated.

Many animals have claws, and whether they mean to or not those claws can damage the interior of a vehicle. The driver doesn’t know if your pet is declawed, or has fleas, or who knows what.

When you order a ride, I suggest you text the driver immediately and let them know of your animal. If they have a problem with it, they will cancel and you can get a different driver. Better to be matched with someone more tolerant right away, don’t you think?

If you have a service animal, the driver is required to take you. Federal laws (ADA) have zero tolerance for drivers who refuse service animals. Emotional support animals, on the other hand, are NOT legally classified as service animals, and are NOT protected under the ADA. In many states, claiming that an ESA is a service animal is illegal and can land you with a hefty fine, if push comes to shove. Remember that you get more flies with honey than vinegar. A little courtesy and asking for permission will get you much farther than a chip on the shoulder.

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