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20% and 80% is how it should be

Updated: Apr 29


Many issues related to companies like Uber, Lyft, and InDrive are pretty hard to explain, but I'll do my best.


Before we get into the subject, let's first go to the beginnings of Rideshare in the USA back in 2014. Very few people know that Uber and Lyft, the leaders of the Rideshare market in the US, initially offered the great bait of 80% for drivers and 20% for the company. Back then, the company's business model determined that earning 20% was enough. By 2015-2016, the company began to realize that 20% was not enough to cover its needs, so it began charging new drivers 30% of its profits. Some drivers were comfortable with the offer, others thought they took too much. In some states they experienced things like 30% of the first 30 trips the driver made, 25% of the other 20 trips, and then only 20% of the rest of the trips. Several U.S. states are like lab mice for them to experiment with new strategies and if one is effective, they take it to every state.


What did 80% mean for drivers and 20% for Uber or Lyft without the miserable Starting Price?

This is a very important question and one that uncovers certain conflicts. When the driver earned 80% of what he worked, it meant that the company was 100% dependent on the revenue the driver generated. Uber and Lyft charged customers whatever the ride cost in real time, with a base service cost per mile and time. As a result, for Uber and Lyft to be able to make money, they had to boost the drivers' earnings. If I'm not mistaken, in 2014 Uber started paying UberX drivers about $1.76 per mile and about $0.40 per minute. This increased exponentially at peak times with the high-demand multipliers. By the time Lyft entered the market, they entered into a price war where both companies began to cut their costs to corner the market. There came a time when it could no longer go down, as it was affecting the economy of both companies. What helped the drivers back then? The famous Surge price, multipliers at peak times of the day. A $3 trip could easily be converted to a $12 trip, or a $10 trip into $60.




 

One of the things that Uber and Lyft seek to fully control is the Surge. They want to eventually disappear the Surge. Why? To control the cost of the service in its entirety and pay the drivers what they consider, whether there is demand or not. The high costs of the surge times will benefit Uber and Lyft only. They currently do. When there are high demands, they charge more and minimize what they pay the drivers. My question is this. What resources do they offer to have the immense gall to profit from high demands? We, on the other hand, must go through more work to reach customers through traffic on the streets, we must spend more gas, we risk having an accident, we spend more time, stress, but what does Uber offer? Why is the cost of the surge or busy time for them?


All this would change as of 2017. After Dara's takeover as CEO, big changes began at Uber that would eventually affect every driver on the platform. It's important to know that Lyft strategically moves alongside Uber. Whatever Uber does, Lyft replicates. What did Dara discover? Drivers have had their pay cut considerably, and yet they continue to work and earn a lot of money. Their economic problems could be solved by reversing the game, in the end they knew that people were going to continue working for the garbage they paid for. They know that a large percentage of people had become dependent on working for Uber. They continued to sell the idea that Uber was profitable. That's why they began to recruit new drivers in large numbers in order to create new generations of drivers, and in each new generation to be able to further reduce what they paid. This strategy was the only one that was going to allow them to continue reducing payments without affecting the workforce. New drivers didn't know that driving for UberX could earn up to $80 an hour after expenses. That is, if we want to calculate hourly earnings. And that's how we drivers end up under the yoke of these companies. We now depend on the value they sell our services and resources, and how much they want to pay us for them.


The 2014, 2015 and 2016 generations of drivers never, ever calculated their hourly earnings, but rather by total hours driven and number of trips at the end of the week. It was more along the lines of, "I worked from Wednesday to Sunday. I drove for 40 hours. I made 130 trips and I made $2100 gross" were the calculations that were made. I remember that sometimes among drivers we would play how much the profit per hour was, and we would say well, I took out like $50, I got like $75, but it wasn't the goal, the goal was to make money. The harder you worked, the more you earned. It was at the option of the driver and his interests.


How does this change? Simple. Uber and Lyft were desperate to grow their revenues. None of them had the ways to do it, because they were not developing new mechanisms to generate income. They looked to the side and said "What's the matter, the drivers are making a lot of money" They began to put their hands in the pockets of the drivers, the cuts began, we saw that 25% of the profits went down, time passed, another 25% until we got to where we are. Uber and Lyft created strategies that got us to where we are now.


When Dara went out to make food deliveries in 2021 for a weekend in NY, he came to the conclusion that this job could be valued in hourly earnings. So because he came up with it, it's what it should be. Thus began the company's move to create a culture of hourly earnings. It's important for Rideshare drivers to understand something. Just as the work of a truck driver, just as the work of a taxi driver, just as a slime driver, an electrician who owns his business, a bricklayer who owns his business, is not valued by the hour. The work of Rideshare is not valued either by the hour. If Uber or Lyft give you the car, the gas, and you just put your time and body into doing the work, ok, they give you the resources, you're more of an employee than an independent contractor, but that's not what's happening right now. We are providing 99% of the resources to do the work, let's calculate them, do you want to?


  • Auto (up to $100,000 USD)

  • Petrol

  • Rubbers

  • Car maintenance (filters, oil, other fluids)

  • Repairs (parts and pieces)

  • Car depreciation (something that no one calculates and is only felt when they have put 70,000 miles on the car in 2 years, and you still owe 4 years of financing and the car lost 50% of its value)

  • Time of your life

  • Bless you

  • Life (Every day we go out driving is at risk of losing our lives, either in an accident or at the hands of someone else)

  • Car insurance

When you calculate all of the above in money, if you are a trained and intelligent person, you will realize that we are being exploited and abused. We don't work to earn by the hour. We should earn money to cover all the expenses and losses mentioned above and be able to generate profits as well. Uber only provides the app. They don't even guarantee security, economic stability and manipulate everything to their whim or benefit.


What I want you to understand with this explanation is that the intentions of the Rideshare companies are to manipulate all the information for their benefit. Make drivers believe that their earnings are commensurate with the work they do. Isn't this just because of the work we do, where our resources are? In the end, you work 3 years, you end up with a worthless car, with debt, you end up without $1 and Uber and Lyft are richer than ever.

 

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