Friday, January 9, 2015

It's not worth it to drive Lyft and Uber in Sacramento - updated

It's now to a point that part-timers will probably LOSE money driving in Sacramento. The only ones who make money are the full-timers. 

1/15/16  Rates lowered AGAIN! Don't get sucked in by the quick fix of the weekly pay because when you do the math, overall your expenses outweigh that quick fix. 

1/9/15 Today they lowered rates again.  That means from Sept to Nov to now, the rate for midtown to the airport has gone from $33 to $22 to $17.  Totally not worth it anymore. Don't fool yourself. Don't sign up for either company. And if you subtract the rider fee, your actually take will only be 74%, not 80% of the fare. 5/15/15  As of today, they are now taking even MORE from new drivers. They are taking 25% instead of 20%. Don't drive! 7/1/15 As of today, CA State law required rideshare drivers to carry additional insurance that covers them while driving rideshare.  Another expense that Lyft and Uber are not going to raise rates to help you cover.  7/31/15  Another decrease in fares in the Bay area. Drivers from Modesto to Fresno to Sac have flocked to drive in SF because the rates were better. Now with the further decrease in the surrounding Bay area, EVERYONE will go into SF proper to drive instead, flooding the market. 8/24/15  Sure enough, there's hardly surging anymore in SF on the weekends because every driver in 100 mile radius is going to drive in SF.

Another example. Ride from the airport to Chico is 83 miles. A driver took it and the fare was $97. But then he had to drive it back empty. Total is 166 miles.  Government mileage rate is 56 cents per mile. That mean's his expense was $104.16.  He actually LOST money on that ride.

Another.  A driver has a regular, weekly ride from Roseville to Emeryville (lucky him!). It used to be $250 and the rider did not complain. In just six months that fare has been lowered all the way to $110 and with Uber there is no tipping feature. That sucks!  And if he doesn't get another fare for the return trip home....

Remember that you also need to calculate/subtract out your car costs (mileage, maintenance) as well as car washes, insurance, and, of course, taxes.

And read this: Hidden Cost of Being an Uber Driver

Original post 11/24/14
As if I don't have enough to do, I decided in August to start driving for Lyft. Not because I need the money, but because I need a social outlet on the weekends. I'm plenty busy during the week, but often get bored on the weekends. And if you haven't figured out by now, I like to stay busy.

I started Labor Day weekend and fell in love with the driving and the socializing. And the money was nice too! Then I went to Seattle for the weekend and when I had returned, Lyft had lowered their rates in Sacramento by 35%.  What once might have been a $150 week went down to $97.50.  So I got pissed and joined Uber.  All was good for a while again until a month ago they dropped their rate by 25%.

Yes, the low rates are great for the consumer and if I was wanting a ride, I'd be loving it. But for the drivers, it's a horrible situation.

During these few months I've met a lot of fellow drivers for both companies and learned that many of them actually drive as their means of support. Some have been unemployed forever due to the economy. Some feel unskilled for anything but driving. There are many other reasons as well, but the meat of the matter is that they depend on driving as a living and the rate cuts have severely impacted that income.

Lyft and Uber both look at drivers as totally disposable.  Grind em up and spit them out and then take on a bunch of newbies.  They don't look at drivers the way they should - as assets that are the faces of their companies. Drivers are who the customers see, not the corporate suits. Happy, good drivers are better than grumpy, crappy drivers. 

And it's not a price war that will find a victor in this war.  It's customer service and marketing. Guess what?  The first person for customer service is the driver!

Both Lyft and Uber keep recruiting drivers.  I often meet people who say, "Oh, I was thinking of signing up too!"  So here are a bunch of thoughts for consideration before driving in Sacramento. 

- With the constant recruiting of drivers, the market is over-saturated. That means there are too many drivers for the number of calls in Sacramento.  We just don't have a huge demand here since many people have cars.  Other cities where people don't own cars - much better.

- This means there can be long waits between calls.  Often over an hour.  Again, too many drivers for the demand here.

- The majority of drives are short.  Keep in mind, downtown/midtown bordered by I-5, the river, Cap City, and then the lower W/X freeway is only about 4-6 square miles. So with the new rates, if I drive someone from the Broadway Target to 16th & L, I make a whopping $3.20 via Lyft and $5 via Uber. Now see above where I said you can wait an hour between calls?  Only to get another short $5? Honestly, I'm almost unwilling to take a friend for $3.20, forget about a perfect stranger.

- Ok, so you get a long haul. Maybe downtown to Folsom for about $20.  The likelihood of you getting another call soon or one that will return you to downtown is close to nil. So really, driving to Folsom and back is actually $10 each way.

- Don't forget about the wear and tear on your vehicle. Luckily I have a hybrid, but if you have a guzzler or you are not interested in wearing down your brakes and adding miles, reconsider.

- If you drive for Uber and happen to qualify for the higher tiers (UberSUV and Uber Black), then realize that the percentage they take out for their cut goes up.  20% for the lowest UberX, but up to 28% for the higher ones.  When they haven't done anything different and yet you have a more expensive car (gas, wear)!

I actually could rant on for another page, but I think this is plenty to get an idea.

Currently I keep driving because I still love the social aspect of it. I have fun meeting people and I get to make money while having fun. But I know that my time is limited. The wear and tear on the car is a significant factor along with the rates being way to low to make it worth it.  I might only last through the holidays. We'll see. But would I recommend it to others?  Not in Sacramento.

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