SoylentNews is people
SoylentNews
A study conducted by the MIT Center for Energy and Environmental Policy Research analysed revenue and costs for over 1100 Lyft and Uber drivers, with the conclusion that most earn below minimum wage for their state and about 30% actually lose money when all the costs of owning and operating their vehicles are taken into account.
"A Median driver generates $0.59 per mile of driving, and incurs costs of $0.30 per mile", "On an hourly basis, the median profit was $3.37 per hour".
Because actual vehicle operating costs are significantly lower than the IRS allowance of $0.54/mile, many drivers report incomes that are substantially lower that their actual incomes, leading to a large pool of untaxed income (although it is small for each driver).
This discussion has been archived.
No new comments can be posted.
MIT Study Shows How Much Driving for Uber or Lyft Sucks
|
Log In/Create an Account
| Top
| 67 comments
| Search Discussion
The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
There's no such thing as an original sin.
-- Elvis Costello
(Score: 2) by Runaway1956 on Saturday March 03 2018, @04:22PM (5 children)
It costs $.30 per mile to operate a typical Uber vehicle? Really? That includes purchase cost, fuel, all maintenance (including wash/wax/detail) insurance, TTL, EVERYTHING? Tolls on tollroads? Self employment taxes? Seriously, dig deep, and add it all up. What is the median insurance rate? Does Uber cover any of that? Are all of these drivers really for sure insured, or do their insurance companies believe that the cars are "privately owned, private use"? The laws are quite different for vehicles for hire, and the insurance is very different.
I strongly suspect that $.30/mile is a very low figure. Sure, if you're driving a fifteen year old vehicle that is in excellent condition, and you owe nothing on it, you don't have things like depreciation eating you up. If you're driving a new car, you need to depreciate with every mile driven. Those in-between cars? Mehh - it will get complicated pretty quickly. Bottom line - if your car dies, what does it cost to replace it, and how long will it take to pay for it at Uber rates?
And, of course, it needs to be noted that you're not going to drive very long if your car is such a POS that nobody wants to ride in it. Even well maintained ten year old cars may be objectionable to a lot of potential customers.
(Score: 2) by Grishnakh on Saturday March 03 2018, @04:53PM (2 children)
10 years old for a car isn't that old these days: lots of cars are at least that old, and still look great. Styling hasn't changed that much in the last 10-15 years; it's not like the 50s-70s where styling was changing fast and cars were falling apart in 50k miles. Now it's not unusual to see a nice Japanese car with 150k miles still driving like new. You can go buy a pretty nice 10yo car now for a few thousand dollars cash that still works great, and if you can do your own maintenance and repairs, it's really dirt cheap to operate a vehicle like that, as the parts are cheap (just don't buy a German car).
I do wonder, however, how many of these Uber/Lyft drivers are properly insured, and how many simply don't tell their insurance. Your probability of having a crash aren't all *that* high, so it's quite possible many are just skating by without their insurance companies agreeing to or knowing of their commercial usage.
As for being "objectionable", those customers should be using one of the higher-tier services like Uber Black. You're not guaranteed to get a really new car with the regular services.
(Score: 1, Informative) by Anonymous Coward on Saturday March 03 2018, @05:46PM (1 child)
There is a CPM calculator here: https://docs.google.com/spreadsheets/d/1RjLsjD9JHDFyLw2J0HHE6_7dEyLuqn8K0E8U5vR-dRc [google.com] where you can crunch the numbers yourself.
But to your insurance question, Uber and Lyft have insurance for the drivers while on the clock. They are notorious for sticking drivers in three ways: First is that their coverage is contingent, which means that any accident results in cross-insurer arbitration and that can take forever. Second is that they only cover you when you are on the clock and it is your job to prove you were on the clock, which gives them the opportunity to weasel out of it. Third is the duty to mitigate, they argue that you should have avoided the route or done something different, such as not driven at all when waiting for a ride, etc.
(Score: 2) by All Your Lawn Are Belong To Us on Monday March 05 2018, @03:55PM
And Fourth, when/if your personal driving insurance catches a whiff that you're Uber/Lyft driving without having told them (which must occur in an accident), your coverage there - the one that having your vehicle licensed depends on - can be retroactively dropped from that point for failure to tell them you're operating your vehicle commercially which puts you in a different risk class.
This sig for rent.
(Score: 1) by khallow on Saturday March 03 2018, @05:44PM
What's surprising about that? Get a vehicle that does well over 30 MPG, has good reliability (in particular, low maintenance costs), is already heavily depreciated because it is several years old, and a reasonable commercial insurance policy. The rest is just minor costs for a high mileage driver - or paid for by the passenger (toll roads). And if you're not a high mileage driver, only come out when fares are higher.
(Score: 2) by JoeMerchant on Saturday March 03 2018, @08:06PM
Well, according to the summary the net income after the standard $0.54/mile deduction is quite low, so self-employment taxes are equally low.
I do believe that a smartly purchased, efficient, used vehicle can be overall operated for $0.30 per mile, and the smarter Uber/Lyft drivers are doing that.
I also believe that there are Uber/Lyft drivers out there in new-purchased Lexus and similarly high depreciation, low efficiency vehicles who are actually spending net more than $0.54 per mile on their "premium" service, but it makes them feel good to be delivering a "premium" service for an extra buck or two and that feels like they are getting compensated for their higher expenses, even though they aren't even coming close.
Do these drivers all do their own maintenance, or are they paying a dealer 5x as much, or an independent mechanic 3x as much, to do it for them?
Uber/Lyft are exploiting weaknesses in the mass psychology of immediate reward vs. deferred expenses. Some Libtard can follow-up their "minimum wage jobs are just for training, or pocket money for kids who live with their parents" with something about Uber/Lyft being an "opportunity for people to extract some of the value tied up in their vehicle while they are between jobs." If we all had a UBI sufficient to pay for basic food, shelter and healthcare, I might tend to agree, I might even tend to agree to abolishing minimum wage - but only after everyone's basic needs are met.
🌻🌻 [google.com]