The Late Night Rants of an Uber Driver

Late one night, I was driving around downtown Berkeley, looking for one more ride before calling it a night. I got a request from a nearby bar and went to pick up the rider. When he got in my car, we exchanged pleasantries and then I swiped the app to start the ride...

My heart sank. The app revealed his destination as Palo Alto, about an hour away. I hesitated and then said, “Sorry, I can’t do it. I can’t do this ride. It’s too far.”

He was not pleased. In a thick German accent, he barked, “Vhat do you mean? You have accepted this ride, and now you must DO IT!!”
“Actually, I didn’t know you were going to Palo Alto when I accepted the ride,” I tried to explain calmly.
“You are LYING!!” he shrieked, as the smell of the beer on his breath filled my car. “I put the destination in, so I KNOW that you knew where I was going!”

At that point, I had to explain to him what every driver knows but almost no rider has heard before. Drivers do not get to see a rider’s destination before accepting a trip. Uber knows where you are going, but they hide that information from drivers when sending them a trip request. When we accept, we have no clue where you might be going. It could be 5 blocks or 50 miles.

It got worse. After explaining to my rider that I really had no idea where he was going, I then asked him to cancel the trip. Predictably, he responded, “You are the one refusing to do the trip. YOU cancel it!”

“I would if I could, but Uber disables the cancel feature for drivers once a ride has started. Only the rider can cancel it.”

“Well, I am not going to cancel it!”, he said. “Uber will charge me a cancellation fee. That is what you WANT isn’t it?”

“They won’t charge you a fee for canceling a ride that is already in progress. Only a ride that hasn’t started yet”.
He hesitated as his intoxicated mind tried to understand the perverse logic of that policy. Finally, he gave up and declared, “Well, I am just not canceling it. It’s your problem!”

“You are aren’t going to be able to get another driver until you cancel this ride,” I told him.

“Well then you won’t be able to get another rider either. I can wait. I’ll go have another drink.”

“That’s fine. Do what you want,” I said. I have been in situations like this before and I knew how it would end. When he left my car, I turned off my phone with the trip still active, and drove home. At some point, he would have had to cancel the ride.

So, let’s review… Uber hides a rider’s destination from drivers until after the trip has started. And at that point, drivers cannot cancel the trip. Why does Uber do this? Clearly, to force drivers to do rides they would otherwise choose not to do. But why is THAT necessary?

Some simple math will shed light on the real reason I was willing to endure that confrontation with an angry rider rather than drive him to Palo Alto.

It’s about 40 miles to Palo Alto from Berkeley. The rate in effect at the time would have earned me about $28 after Uber’s fees and commissions. But then I’d have to drive back with an empty car. Total trip distance for me: around 80 miles. I keep records and have calculated the variable cost of driving my car to be around $0.40/mile. This includes fuel, maintenance and depreciation, but does not include fixed costs like insurance and finance charges which arguably I would be paying anyway. So the cost of the trip to me would be around 80 miles x $0.40/mile, which is around $32. In other words, if I did the trip, I would have 2 hours of driving and put 80 miles on my car, and I would be $4 poorer for my trouble. No, thank you.

In general, I’m getting between $0.60-$0.65/mile from Uber, while I’m on the meter. And my car is costing me around $0.40/mile for all miles. That includes the miles it takes to pick someone up and to return from dropping them off until another fare is picked up. We refer to those as “dead” miles because they produce no revenue. It turns out that if my dead miles are more than 50% of the metered miles, I’m losing money.

This exposes one of Uber’s dirty little secrets: a significant and growing number of rides are absolute money losers for drivers. The proceeds from the trip do not even cover the cost of operating the vehicle, let alone provide a fair return to the driver or the investment in their cars.

Think about that the next time you benefit from a really cheap ride. It turns out that the great disruptive innovation that allows Uber to offer rides for less than half of what a taxi would charge has very little to do with any kind of technological advancement and a lot to do with Uber’s ability to get drivers to do money-losing rides.

No rational driver would freely agree to do such rides. In order to get drivers to do them, Uber has to resort to a combination of misinformation and coercion, along with some carefully targeted incentives.

Of course, everyone knows about surge pricing. The temporary price increases during periods of high demand do shift the equation and make more rides worth doing. Full time drivers can also benefit from some targeted incentives that encourage them to do more trips. So money-losing trips can at least get a driver closer to earning a weekly bonus.

And for the other trips, there is misinformation and coercion. The misinformation comes in two forms: First, as we’ve seen, drivers are not given information about a rider’s destination before being asked to commit to the ride. And second, drivers are encouraged to ignore or not properly calculate the operating costs of their vehicle so that earnings seem much higher than they actually are.

If the misinformation fails, there is always coercion. Drivers are expected to accept every request sent to them and to complete every ride accepted. That is why there is no cancellation option for drivers once they learn the destination.

Uber diligently monitors acceptance and cancellation rates. They allow some deviation from perfection, but not without warnings and consequences. The day after my non-completed ride to Palo Alto, I received a warning message from Uber informing me that I could face “deactivation” (the current euphemism for getting fired) if such behavior continued. To a driver who depends upon their Uber income, such warnings are scary… and effective. Most drivers quickly fall in line and try not to think about how much money they might be losing on a ride, hoping instead that the next ride will make up for it.

At this point, perhaps you might be thinking, “Well, this is what an Uber driver signs up for. They have to take the good with the bad. It’s part of their job.”

Well… No. And no.

It’s very clear when you sign up to drive for Uber that it is NOT a job. The company is not responsible in any way for your time or expenses, which you are free to manage as you wish. Uber refers to its drivers as “independent third party transportation providers”, who are free to drive when and where they want. Except that they aren’t.

I had a real driving job once. My employer would tell me to go somewhere, pick someone up and drive them somewhere else. Perhaps even Palo Alto. And I would do it. Because it WAS my job, and my employer was paying the expenses for the trip.

There is a simple principle here: whoever has to pay the expenses for providing a ride should get to decide whether to DO that ride.

Otherwise, there is a clear conflict of interest. Uber’s goal is to complete as many rides as possible, because they earn revenue from every ride, without having to incur any of the costs of providing it. I can remember when I first started driving for Uber. They would occasionally send me ride requests that were 10+ miles away. I would accept them, thinking, “well if Uber is asking me to go that far to pick someone up, it must be for a long trip, and it must be worthwhile.” I quickly learned that isn’t true. If someone wants a ride down the block, and the nearest driver is 30 minutes away, Uber will not hesitate to send them the request, without of course revealing the short trip destination.

Maybe you’re thinking, “Refusing trips is exactly the kind of behavior we came to hate from taxi drivers, and it’s part of why we switched to Uber in the first place. If it is going to be a reputable service, we need to know that we can get a ride to wherever we need to go.”

Fair point. But there is an important difference between being able to get a ride from Uber and being able to get one from any individual driver.

There are two ways Uber could provide car service on demand for everyone to anywhere. First, it could do what every other private car service does: buy a large fleet of commercial vehicles, hire professional drivers and dispatch them when and where needed. The company would have complete control and be able to offer whatever rides it chose.

But that is so “primitive”. It is expensive, risky, and difficult to scale. Enter “rideshare”, the new model where independent drivers are matched with those seeking a ride. Uber doesn’t need to own any cars or employ any drivers. The Uber app provides a platform for riders to request a ride and drivers to accept them. This model has low cost and scales easily.

The problem is that this “marketplace” model can be unpredictable; and ultimately, unreliable. Maybe no one wants to drive from Berkeley to Palo Alto at 1am unless the fare is much higher. Maybe there are some places that no one wants to drive to at all.

The challenge for Uber was to come up with a way to maintain the control and reap the benefits of being a branded transportation provider without actually having to incur the costs, risks and responsibilities of being one. In other words, how to have their cake and eat it too.

This brings us to another of Uber’s dirty little secrets. Well, it’s not really a secret anymore, since there have been multiple class action lawsuits filed. The issue is that Uber represents to drivers that they are independent transportation businesses. But what really happens is that Uber sells rides under its own name to its own customers, and then directs its “independent drivers” to fulfill those rides, without giving them much choice about it. In other words, drivers are being managed and controlled as employees, without getting any of the benefits or protections of actually being employees.

This explains the awkward and frustrating situations that drivers often find themselves in. Riders expect them to provide the service they are purchasing from Uber, while drivers are trying to act like the independent business owners they have been told they are.

No independent driver should be forced or tricked into doing a ride that they don’t want to do, especially if it loses them money. If this results in a less reliable service, that is the fault of the business model, not the driver.

Let’s assume that you are uncomfortable at the prospect that your Uber driver, who probably makes less money than you do, may be subsidizing your ride, and may actually lose money doing it. What can you do?

Here are some simple things you can do that your driver will very much appreciate:

If your trip is short, and your assigned driver is relatively far away, cancel immediately. It won’t cost you anything, and chances are the driver felt compelled to accept the ride and will be grateful when you cancel. In most cases, if you wait a minute and request again, you will likely get a closer driver anyway.

If your trip is long, contact your driver right after they accept the ride and ask them if they are willing to take you where you want to go. If they don’t seem eager to do the ride, offer to cancel and request someone else.

In most cases, these small actions cost you nothing except perhaps a minute or two of your time, but they can make a huge difference to drivers. But occasionally, you may find yourself in a situation that would be unappealing to any driver. Maybe you are in an area where the nearest driver is going to have to drive a long way to get to you. Or maybe you are looking for a long ride home late at night where your driver will almost certainly have to return with an empty car. Remember that your driver is not an Uber employee, and if they really don’t want to do your ride, they won’t, and if they feel pressured into doing it, they will likely retaliate by giving you a low rating. In these situations a little common courtesy and perhaps even a gratuity offer can go a long way.

A few nights after my incident, I picked up someone else at the same bar. He said, “Hey, I’m really in a bind and I hope you can help me out. I’ve had too many drinks to drive home, but live about an hour away. I know it’s late and it’s far, but if you’re willing to get me home, there’s an extra $20 in it for you.”

I said, “Sure, no problem. Happy to help. And thanks for asking!”