I became an Uber driver in July 2015. I had driven for Lyft since January, but everybody said you could earn more money with Uber and it seemed to be true — Uber was and still is a far more popular service.
So, I bought a new car. Having passed the car inspection and the background check, the first day I drove for Uber was July 15. It was a good day, I made over $173. It could only get better. For the next two weeks, it did.
Then, on July 30, an email popped into all San Francisco area Uber drivers’ inboxes. “Updating East Bay + South Bay Fares,” the subject line said.
It can’t be good news, I’m sure we all thought.
It wasn’t. “Fares in San Francisco are staying the same, but starting July 31 uberX fares in the South Bay and East Bay will be 15% lower.”
The reason behind Uber’s sudden rate change was also stated in the email. “We’ve seen lower summer prices attract more riders in previous years, and we’re expecting more Bay Area riders this summer than ever before.”
I am writing these lines on October 26. The summer is long gone, but we’re still operating the “lower summer prices” that, in the past two months and then some, have definitely not attracted more riders; what they’ve actually done is taken away 15% of every East and South Bay Uber driver’s earnings. I, for example, more often than not drive more miles than the dollars I earn. The fare from Danville to SFO was cut from $78 to $65. From Danville to Oakland Airport was cut from $44 to $33.
When you’re a full-time rideshare driver, the 15-percent fare cut is actually a very painful pay reduction. And if you live in the San Francisco Bay Area, there’s no way in hell you could make a living driving for Uber. The rising prices and the declining earnings just make it impossible.
Here’s an interesting factoid. When Uber’s main competitor, Lyft, has campaigns to onboard more customers by offering them lower rates, the company subsidizes these campaigns to help its drivers still earn the amount they signed up to earn. For example, in the spring, Lyft offered $2.50 carpool rides (called Lyft Line) in certain areas of San Francisco. But when the ride was, for example, five miles long and took 30 minutes (and that is quite normal in San Francisco), the driver still earned the full amount of a five-mile 30-minute ride, even though the passenger paid $2.50.
That is the basic difference in philosophies between Uber and its competitors. Even SideCar, a third rideshare company that no one has heard of, subsidizes its campaigns to make sure its drivers feel appreciated and don’t lose out just because the company wants to onboard more clients. Because, in the long run, if the customers stay with the company, they are going to earn it a lot more money, making up for the tiny loss at the onboarding phase.
But by cutting rates in the East and South Bays and letting its drivers to take the hit, Uber is showing clearly that they either don’t understand this basic marketing technique, or — and far more likely — they don’t give two shits about their drivers. I mean, they have a line out the door of new drivers, so why should they?
Every single full-time Uber driver understands that what they do isn’t a get rich quick scheme. But what every single Uber driver kind of expects is to be able to make a decent living out of it. Right now, however, that is an impossibility, something that does not happen, especially if you work in the East or South Bays.
As I’ve pointed out before, more often than I would like, I make actually less dollars than the miles I drive. Let’s explore that a bit further — because, based on the actual East and South Bay rate (base fare $1.95, mile $1.10, minute $0.20 — for a comparison, the rates in SF are, respectively, $2.20/$1.30/$0.26), this shouldn’t be possible, right? But imagine if you first drive six miles to the pick-up address and then take the passenger four miles — you end up earning $9.26 for that four-mile ride, but you’ve actually done ten miles altogether. Or, even a worse scenario when you drive eight miles to pick someone up just to learn that this someone wants to go around the corner — half a mile. You drive 8.5 miles, you earn $3.20 (minimum fare is $5, but the driver takes home a lot less than that after the Uber fees).
Of course, if we also take into account gas and car maintenance, the picture will change for even worse. The Internal Revenue Service expects, on average and probably quite arbitrarily, you to spend 57.5 cents per business mile on the car you drive. This sum should include the gas and the wear and tear on the car — because, as every driver knows, if you drive through a pothole (and, there are millions of those in the Bay Area, especially in San Francisco), something potentially breaks — something you might not even realize before something else breaks and you’re hit with a bill for thousands of dollars.
This, on the other hand, means that of the abovementioned $3.20 fare, the driver’s actual earning is $-1.96. Yes, the driver ends up paying almost two bucks out of his pocket to have given a ride to a client. And when you have a good day and you make $200 by driving 200 miles, the money you actually earn is $85. And let me tell you — 85 bucks for 12 hours of work is pure mockery.
Last November, the Uber CEO, Travis Kalanick, praised Obamacare, saying the impact of the health-care reform had been “huge” on his company. “The democratization of those types of benefits allow people to have more flexible ways to make a living. They don’t have to be working for The Man.” But what Kalanick didn’t say was that 90% of Uber drivers couldn’t even dream of affording Obamacare. The only way a rideshare driver could have health-care coverage is if their spouse worked at a company that offered its employees and their families corporate health plans. And the only way a full-time rideshare driver could live off their wages is when their spouse is the family’s main bread earner, and the driver’s income is a supplement to help them get by better.
To be continued…