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Earnings Per Hour?

Updated: May 12




For those who don't know yet. This driver union was founded by Uber and Lyft drivers who have been doing this business for about 10 years. Some come from other states, the rest of us are veterans of this business in Miami. In other words, we know very well all the changes that the market has suffered and its deterioration.


Something that has been catching my attention lately is how the new generations of drivers in this city are calculating their earnings solely and exclusively in relation to time, nothing more. Another thing that has left me speechless is that many drivers compare their situation in this country with what they had in their respective countries. An example of this is receiving a 40-minute, 20-mile ride for $20 USD. Many say “In my country I never earned $20 USD working less than 1 hour.”


The companies Uber and Lyft, the causes of many problems and damage, are the ones that have manipulated information to deteriorate the way drivers value their business so they can benefit.


I have discussed this topic in another post, but in this one I want to go a little deeper into the mistakes that many are making. It is important to understand that our goal is not to do harm, but to help you understand how this business works and prevent you from continuing to be exploited.


Let's go to the first point.


  • Earnings by Time!


This is something irrational for the type of work we do, the resources we use and the risks we carry. It is critical to understand something, WE ARE NOT EMPLOYEES! Our profits cannot be valued by time alone. Where are the other resources? The accumulated expenses and losses? Many people sometimes tell me, what losses?


The first thing is to understand that this is a business. Not a regular job like working in a warehouse or office. A regular job pays you to go to work at a specific location or from your home, where the only resources you use are your time and knowledge or physical effort. In many cases, these jobs have benefits. They pay you with W2, they take away taxes, they offer you health insurance, 401K, paid vacations, etc.


When does it stop being a regular job? At the same time, the company pays you with 1099 and you are an independent contractor. Not everyone who works as independent contractors has to use resources other than their time, knowledge and/or effort. In the case of Ride-Sharing drivers like Uber, Lyft and InDrive, we have to use extra resources to do the job.


What are these resources?


Time, car, and money. To this, we add the risks. Working in an office or warehouse is not the same as driving for 8, 10, 12 or more hours a day, 7 days a week. The more days and hours we drive, the greater the risk we are exposed to.


  1. TIME. Time has value. That value is not set by Uber, Lyft or InDrive, we set it. How much do you cost per hour? How much do you want to earn for your time alone? What is the minimum you will accept for your time? In a regular job, you earn per hour worked, and a salary set by the employer. You should not deduct anything from that money, since a regular job has no expenses linked to the job.

  2. CAR. This is the part where everyone gets lost. The car accumulates losses and generates expenses. How? The miles. What is the loss? The devaluation of the car when acquiring miles. Every mile you put on your car depreciates its cost. There are also the costs of maintenance, brakes, repairs, tires, Rideshare Endorsement insurance (something that almost no one has in their aggregate insurance, and it is a HUGE PROBLEM NOT TO DO IT).

  3. MONEY. How do I spend money to make money? Well yes! Let's say you start working for the first time, driving for Uber or Lyft. You go to the gas station and fill up the gas tank and spend $40 USD. This is an investment. Did Uber or Lyft give you the $40 USD? No, it's your money. You have to recover those $40 from what you earn. Let's say you managed to make $160 USD with that $40 worth of gas. You must subtract the $40 and refill the tank. That is a permanent expense that you have and which you must recover whenever you go out to work. There is also the cost of cleaning the car. It's $15, $20, $25 USD each cleaning or $39.99 USD per month. There are other expenses that I am not going to mention.

Now the question is, do you consider this a regular job that should be paid for time only? Are we currently making money driving for Uber and Lyft?


The short answer is a huge NO.


For example, when we file our taxes, the IRS values the miles driven on our car at $0.67 USD. That $0.67 USD per mile is used to cover the cost of gasoline used, car repairs, tolls, tires, maintenance, and interest paid on the car if it is financed. What does this mean? That the $0.67 USD is related to pure expense. In addition, you must also keep in mind that each mile added to the car creates a depreciation in the value of the car.


Let's give examples.


EXAMPLE #1



In Example #1 we are going to see 2 types of drivers.


  • One is the one who says that $16.92 USD for 40 minutes is not bad. I don't earn that anywhere else

  • Another will say that they paid $1 USD per mile. Everything accumulates

Both concepts are TOTALLY WRONG.


Let's see if you really made money on this trip. The first thing is to look for a value per mile and time.


In this example, Uber is paying approximately


$0.13 per minute = 40 Minutes x $0.13 = $5.20 USD

$0.69 per mile = 17 miles x $0.69 = $11.73 USD

This comes to a total of $16.93 USD


Now. If we calculate what the IRS dictates that your car expense is $0.67 USD per mile, it means that you were left with $0.02 USD per mile profit plus $5.20 USD per 40 minutes of driving, leaving you with a TOTAL profit of $5.22 USD.


The $0.67 cents per mile is untouchable. If you do not separate $0.67 per mile from each trip you make, you are using the money for tires, repairs, taxes, car insurance, maintenance, etc. to live. Big mistake.


We are virtually generating profits because we are not taking into account the expenses that we will eventually have. That's why many people, when their car breaks down, don't have the money to repair it. They don't have any for new tires. If the car's transmission breaks, many will simply be left standing without a car. In some cases, you have the money but when you spent in all those things you run out of money automatically.


Another unusual example, but, is how every trip should be for the UberX category.



EXAMPLE #2






We are going to calculate this trip, although it is difficult to achieve because it is not a usual trip.


$0.51 per minute = 27 Minutes x $0.51 = $13.77 USD

$1.85 a mile = 12.8 miles x $1.85 = $23.68 USD

This comes to a total of $37.45 USD


For a time of 27 minutes driven, I earned $13.77 USD. Now. If we calculate what the IRS dictates that your car expense is $0.67 USD per mile, it means you were left with $1.17 USD per mile profit plus $13.77 USD per 27 minutes of driving, leaving you with a TOTAL profit of $28.87 USD. This profit represents what you earned for your time, resources, and risks. That money is what helps you pay your bills. In other words, being able to live off the profits you generate.


My answer again is, we are being exploited. We are continually being abused, and the only thing we can do is unite to fight against the abuse we are exposed to. It's our only weapon. This is a money business. Many of you don't know that UberX drivers could previously earn up to $250 to $300 in just 10 hours of work, on a regular day and on fairly busy days, over $300. This was making around 2.5 trips every hour, equivalent to 25 trips in 10 hours.

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