Sunday, May 22, 2016

The Essential Uber Driver

In January of this year, my friend Jon talked me into driving for the ride sharing service, Uber. Jon had made nearly 600 bucks in three days, half of which he made on New Year's Eve. That sounded like a pretty good deal to me. So I set about the task of trying to investigate Uber online. All I could find were a couple of cheer leading pieces telling me how lucrative Uber driving was. I suspected if people were making 50, 75, and 100k a year as some posts claimed- everyone would be driving for Uber. So I knew that was bullshit. I also found some disgruntled comments here and there. What I wasn't able to find was a comprehensive "pros and cons" type of piece written by an actual driver and not some company stooge or displaced taxi cab driver.

For the record, I am a retired police officer from small town America. Driving people around in cars comes pretty natural to me, although in the case of Uber- it's the rider's choice to take a ride rather than my decision to give them one. I like people, tolerate drunks well, and I can talk to anyone-so I thought Uber would be a strong fit for me. I decided to give it a try.

GETTING STARTED

Uber requires that at a minimum, prospective drivers have at least a 2006 model, four door vehicle. You must provide registration and proof of insurance. You must also have a driver's license with a fairly clean record and prospective drivers must submit to a background check. Your car also has to be inspected by a local shop which you will pay for- usually about 20 bucks. All communication with Uber is done using your camera phone and email. You will never talk to a human being in the Uber hierarchy- they see no utility in that. Drivers take pictures of themselves- pictures which are furnished to riders. You must have a fairly current smart phone to receive calls and map directions. I am currently using a Samsung Galaxy 4. It is easy to burn through a stock battery in just a few trips so I bought a huge battery pack which tripled my storage capacity. I still use a car charger as well. I have a three pronged set-up for passengers to use. You'd be surprised how many passengers have dead phones.

It takes 3-7 days to get through Uber's application process. There are a couple of online tutorials that will help you and give you some tips. Tips like buying passengers water- which I found to be a complete waste of time and money. If you really want to provide something passengers use- try gum instead. More on that later.

Once you are approved- you can go online.  My first call was a young gal at the airport. Drivers have 15 seconds to accept a ride. You simply touch your phone screen and then google maps locates you and gives you directions to your passenger. Once you accept a ride you can actually call or text your passenger. I use this feature quite a bit at the airport or when a passenger keeps me waiting curbside.

Google's mapping feature is far from precise. I have had five different addresses offered for the Boise Airport. Sometimes you can be an entire block off- meaning the customer is actually a block in front of or behind the given destination. Sometimes riders screw up the address when requesting a ride. Finding people in crowds is also very hard or in wide open spaces like giant apartment complexes and malls. In those types of environments, you must rely on the pin on the map which is the customer's GPS. Sometimes I use two navigation devices.

Uber does not let drivers see the trip length in advance. After arrival at a pick up point, you must swipe the "start trip" screen before you can see the destination- provided the rider has bothered to put it in. That way, drivers cannot decline a trip based on trip length.

Nothing irks me more than riders who cancel the ride after you are halfway there or riders who leave you waiting by the curb. I wait 6 minutes for riders and then I promptly leave. That happened today. I suspect she did it because the price was surging and paying the nominal 5 dollar no show fee (after a driver waits 5 mins) was cheaper than taking the ride to where ever it was that she was going. Which brings me to a few passenger tips and the two way rating system.

Anytime you have trouble with a passenger before the trip starts- especially if you are new to Uber- you are far better off canceling the trip than trying to salvage it. You can cancel as often as you like. Uber likes to call us "sub contractors" rather than employees. A huge benefit to having that designation is that you are the Captain of your ship. Anytime a passenger makes you wait too long, over stuffs your car with 5 or more passengers, tries to smoke, vape, or smuggle in drinks, asks you to haul muddy pets, or anything else you don't like- you are better off canceling the trip. Those types of trips tend to degrade and you can't stop the impending bad rating anyway- if your passenger doesn't like you at the beginning they will not like you at the end. Cancel those types of passengers. Save yourself the grief and a bad rating.

I've had people spit chew down the door, spill drinks on the seat and floor, been an unwitting party to a drug deal, and even witnessed a gal give a guy a hand job in the backseat. Check your backseats frequently. Lost cell phones and other items are common. Had I checked my back seat one night, I might have been able to mop up a rum and coke stain on my backseat before it became permanent.

RATING SYSTEM- ONE TO FIVE STARS

Let's talk about Uber's rating system. I personally believe that rating passengers after a trip is a waste of time because the data is simply not relevant. Bad passengers get us the same money as the good ones. I see no utility in giving a rider a bad rating. That's part of the job. Uber lets passengers get away with a lot. I have hauled passengers with low ratings and some deserved worse. In my 600 plus trips- I have never given any rider anything other than 5 stars. Uber doesn't care about rider ratings and even if they do- they sure don't communicate that to drivers. If you do see a ride pop up and the user has a low rating, you can choose to not take the trip. That has been the only saving grace to rider ratings.

Riders can see previous trips and the driver's photo on their application which is a nice feature. Drivers must remember names- I have a few "stand outs" which I remember- one who likes to vape in my car (vaping leaves a sticky film on your windows) and the other which used the service (and my car) to complete a drug deal including two trips to the same house and an atm. After tying up the car and being a general creep- I dropped him back off where we started from- a strip club. He immediately gave me the only bad rating I had that week. He was just a scumbag- there really is no other way of describing him, his appearance, or his demeanor. I immediately committed his name to my "no fly" list.

Riders issuing bad ratings to drivers works differently. Uber can and will shut your app down if a driver rating falls below 4.6. Drivers then have to pay for an online course and complete it before they can continue to drive. I get the whole accountability piece but the part that irritates me about the rating system is that any angry, drunk, surly, depressed, or entitled prince or princess can give you a bad rating for no other reason than they are just miserable people. Short of a functioning crystal ball, drivers can't avoid these people. A few days ago, I picked up a snotty gal who barked orders at me the entire trip. I tried to be nice to her but she ignored me while staring at her phone. I tend to remember people like "Charla."  Those types of trips can never get over fast enough- I wanted to hit the NOS. I thanked her despite her crappy attitude and waited for the inevitable bad rating which oddly, showed up a day or two later. Charla, I can guarantee you, will never ride in my car again.

When riders rate you poorly- they tend to do it right away. It will show up quickly. My personal experience is that about 1 person out of 20 will rate you poorly no matter what you do. Decent people are far more forgiving. Boise's best drivers sport a 4.88 rating. Mine is a little higher. One of the best things about driving for Uber, and one of the few reasons that I continued to drive for Uber as long as I have is that the vast majority of people are decent, interesting, and some are really fun to cart around. You are working in close quarters with strangers. I like people and Uber is a fantastic way of meeting them. Unfortunately, Uber is becoming the Walmart of transportation- enriching itself at the expense of their drivers.

THE UBER PAY STRUCTURE

I started driving for Uber in January. They had minimum hourly guarantees, rates of 9 and 14 dollars per hour depending on the time of day. We also had higher base fares and we received an additional dollar a ride.

By March, Uber had slashed the base fares some 35%. They did away with hourly guarantees. They also phased out the additional dollar a trip. Now we receive a base rate of 2 dollars, 1 dollar per mile, and .15 cents a minute for the time that the car is tied up. There is no additional fee for 2-4 riders- this is a fact not lost on partying college kids.

A very typical 3 mile trip in Boise will gross 6 bucks. Uber swipes 25% off the top, leaving you with about 4.50.

The average trip for a driver goes something like this. The pick up is 2.5 miles away. You take the customer 3 miles and your return trip home is 3.5 miles. You have driven 9 miles for a trip that will net you 4 bucks and change. If that sounds like a formula for financial success, Uber is looking for you.

Uber employs a strategy called "surge" pricing wherein they charge riders more at peak travel times. Surge pricing, a novelty really, has added about 400 dollars or less than 10% to my gross earnings. Most potential riders just wait 10 or 15 minutes until the rates return to normal before requesting a ride. In fact, I used to use surge times for breaks to go to the store and get gas because people just wait out surge pricing or take a cab instead.

People tip infrequently but I usually make something in tips. Maybe 5 bucks a day averaged over time. I use tips to buy gum. Many of my riders are hung over, trying to get back to their cars and homes on Saturday and Sunday mornings. Hardly anyone turns down gum and it cures cottonmouth. It doesn't hurt your rating either.

Uber it seems, can change your pay rate any time they choose with little notice. Under normal working conditions, employees in virtually any other job in this country are given a pre- determined and agreed upon wage which generally cannot go down. Apparently Uber thinks it does not have to adhere to that custom and so far- at least in Boise- they have proven that.

I have talked to other drivers from other locales. Where there is competition, Uber cannot afford to lose drivers. In places like Salt Lake City and San Francisco, drivers are still making decent money because Uber can't find a way to scalp employees and keep competitive in those markets. Here in Boise, many of us are simply quitting. About the time the competing Lyft service gets here, Uber will start paying drivers again. Given a choice, I hope Boise drivers remember what Uber did here.

COSTS 

You will need a cellphone, a data plan, a car, insurance, gas, brakes, tires, and oil. Uber does not re-imburse any of that. Writing it off on your taxes is tricky business and all costs are certainly not recoverable. Uber with holds nothing so you'll be on the hook for the additional tax bite.

The wear and tear on my car has been significant. I smoked a clutch hauling 4 of the biggest human beings ever stuffed into an Elantra. I was the small guy at 260. The clutch repair cost me 700 and two weeks of downtime. I had a tire blow up in front of me on the interstate and as I was dodging airborne parts of truck/trailer tire, I rolled over a piece which slapped up and damaged my rear bumper cover. I've also had two near collisions which brings me to a point that all drivers really need to consider.

If your insurance company finds out you are driving commercially- they will cancel you. They will not pay claims. That leaves you high and dry. Oddly, I cannot find policy terms for James River Insurance which is on the waybill as Uber's insurance carrier. My gut tells me that Uber probably insures themselves against losses incurred by drivers or passengers (liability) but I doubt that loss coverage is extended to drivers. If you were to get in a significant injury accident you would be in serious trouble- particularly if you were at fault. Brokering a commercial policy is expensive and probably the best way to go- this is something Uber should be doing. How they've managed to avoid this boggles my mind. If cities in America required Uber to adequately and commercially insure their drivers- they could probably run them out of business.

THE BIG FINISH

Uber is a great idea and probably the best thing that ever happened in the passenger hauling space. Riders love Uber. It is a car on demand anytime you need one. You know who is coming to get you, what they will be driving, how long it will take, and you can even watch them on the screen. The car is dedicated to the requesting party and cannot be hailed by anyone else. The entire trip from request to finish is logged even when a driver forgets to start the trip. The cars are generally nicer and the drivers speak fluid English. Uber costs one half of what a taxi might cost in our market although I cannot speak for other markets. No cash changes hands.

I like Uber a lot. It works. The problem is that Uber, like so many other greedy corporations, has found a way of exploiting drivers and cars. The result of this will be a thinning of the driver gene pool, so to speak. Cars and drivers will only meet the minimum standards. Intelligent drivers will quit because the math doesn't work. The workforce will become transitory, new drivers will come and go. It's a shame really because Uber is such a good idea. Eventually, the market will push back and the novelty of ride sharing will wear off. I don't think the barriers to market entry are all that great and one day I envision- an efficient and improved peer to peer application- (not unlike Tinder) may just take the place of a corporate entity skimming proceeds off the top of the ride sharing biz..

Today is my last day of Uber driving. The risk-reward ratio is just too far out of balance for me to continue. I have made 600 trips and I have only managed to gross 4200 bucks this year- about 7 bucks a trip. That total includes money from the old, attractive pricing structures, long trips, and surge pricing. Boise has two larger problems- a lack of long rides and excessive downtime between ride requests. I can't even make it pencil by only working peak times.

So it boils down to this. Find a value for your time, your car (cost), insurance, gas and oil, wear and tear, which I have priced at .90 cents a mile. (.60 for car, .30 a min. for labor or 18.00 an hr) Find your average trip length, let's say 9 miles round trip. If you didn't make 8.10 on that trip, you lost money. Uber would have paid you 4.50, before taxes. They do not count your time and mileage to the trip nor your time and mileage to return.

That as they say is the bottom line. In the end, market forces will determine how much drivers make. With a current glut of math challenged drivers and no ride sharing competition- Uber is sweeping every last crumb off the table while they can in Boise. The truth is- Uber would do away with human drivers if they could. Read this piece on "driverless" cars. http://arstechnica.com/cars/2016/05/uber-to-begin-testing-self-driving-cars-in-pittsburgh/ That makes me laugh. Some riders would still find something to whine about.

Years ago when I was a kid, I got ripped off by an unscrupulous radio station that promised to pay me mileage and a dollar per delivery for coupon books they were selling. They never paid me a dime. I never forgot that lesson. They beat Uber to this punch bowl by some 40 years.

Hopefully I've been able to write the sort of comprehensive, "here's the pros and cons, this was my experience" sort of piece that I was searching for back in January. I know it leans a little harsh against driving for Uber but I think the information is generally accurate and universal. It might help people make informed decisions and perform a little due diligence on their own. Markets are different and Uber prices markets differently. Any potential driver can sort out his or her city's pricing structure. Uber up a ride and ask the driver a few questions. That's the best and most accurate information that you are likely to get.

P.S. (Dec 12, 2016) This is the longest Uber ride ever given, the author thinks. The big sucker in this story ain't the passenger. http://nypost.com/2016/12/10/the-longest-ride-in-uber-history/

Uber screwing Houston drivers. http://money.cnn.com/2017/03/08/technology/houston-austin-uber-drivers/index.html?iid=ob_article_footer_adblo