People ask me a couple of times per week about Uber, and if I think they will someday significantly impact my business, and my answer is always a confident “no”. I have heard several high-profile people, including Mary Katharine Ham at HotAir.com and even Senator Marco Rubio praise Uber as a “new tech company that is changing an antiquated industry”, and the only reason that taxi companies object to Uber is because Uber will cut into their business.
In reality, Uber is not a tech company at all, they are a franchise taxi company with a decent phone app that shifts the bulk of their costs and liabilities to the individual drivers. But they SAY that they are a “tech” company, and therefore should not be subject to the any of the laws regulating taxi companies. This is nonsensical at best; the most generous evaluation of their business model is that their phone app replaces the traditional dispatch system, but they are still sending you a car for hire.
When people bring this up in my car, I say, “What if I opened a new, unique concept in dining out, where you use a phone app to place your order, and when you arrive at the restaurant, your food is waiting for you at the table, eliminating the traditional waitress? Since I have eliminated the waitress with my app and there is no tipping, your dinner costs 40% less. But then I tell the local Health Department that I am a “tech” business, not a “restaurant” business, and I should not be subject to their inspections, regulation, or oversight that other restaurants have to undergo… is that OK with you?”
People invariably respond with something like, “Well, no, that isn’t right… an unregulated restaurant could be infested with vermin, or give people food poisoning. You could be cookin’ up cats, or some shit like that… you could kill someone. That is a business that MUST be regulated.”
And I reply, “You are correct. I agree, 100 percent. Now, answer me this… how many people died in car crashes in this town last month, and how many people died of food poisoning? Which industry do you think requires more scrupulous regulation?”
If you have read my blog, you know that I am pretty conservative and not enamored with gigantic, bloated Federal government. I believe that state government, and ultimately local government should be the entity from which nearly all laws and regulations that govern my business and my conduct should flow. One of the founders of my company is a Canadian and an unabashed socialist, and he seems to think this attitude is somehow indicative that I am some sort of batshit-crazy anarchist, but the truth is, I’m really a law-and-order kinda guy. I don’t rob, rape, or murder people, and I think people that DO should be dealt with harshly, up to and including the use of bullets, if necessary. I want my streets to be safe, I want my roads to be free of drunks, and I want my local officials to make sure that at bare minimum, my local restaurants and taxis can be trusted.
Where I work, the process of getting a license to drive a taxi is about as strenuous as getting a Concealed Weapons Permit… you must be photographed, fingerprinted, subjected to a FBI background check, no felonies, no DUI’s for a loooong time, and your driving record has to be really clean. Your car should be in excellent working order at all times (I carry a spare headlamp bulb), and a yearly inspection sticker must be affixed to the rear of your car. This is all about public safety, which is an issue I happen to care about.
And let me also add that I am someone that you can trust to be alone with your five month old infant, your five year old daughter, your fifteen year old sister, your girlfriend of five years, or your wife of fifty years. I can’t speak to the character or behavior of other taxi drivers in this town, but I am someone you can trust to get your loved ones safely home, and I will light the way up to the door and see them get safely inside, even if that means getting out of my car and walking them up to the door myself. And I feel pretty confident saying the same holds true for the other drivers in my company, and most of the taxi drivers I know by name. At least part of that can be attributed to the background checks we undergo, and good hiring practices by the companies I have worked for. But Uber has no background checks, in spite of what they say on their website. They seem more concerned about the age of your car, and so we get stories in the news about girls driven around for hours and getting their tits groped.
Before I became a hack, I might have taken three or four taxi rides in my entire life, so I never really thought about it, but think about this… A girl gets dressed up all sexy on a Saturday evening, gets shithammered at the bar, and at the end of the night, she tumbles into a car driven by a total stranger… what could go wrong?
I have a small stable of twelve or fifteen girls that call me directly all the time, simply because they don’t want to get in a random taxi that might be disgusting, or worse yet, might be driven by some creepy driver that hits on them or otherwise makes them uncomfortable. My girls know that I am married, I am safe, I am not going to make a pass at them, my car won’t smell like vomit, cigarettes, and dirty socks, and I will make sure they get in their door safely before I leave.
The other big problem is insurance. Uber requires the minimum legal insurance for passenger cars in whatever locality they operate, but should the driver have an at-fault accident, the second his insurance company gets wind that he is an Uber driver, they will deny any claims because the driver was operating the car as a commercial vehicle, and that means that you, as a passenger, are totally fucked. Sorry about your amputated leg and your glass eye, but if your 22 year old stoner Uber driver doesn’t have some serious assets you can sue for civilly, you are just outta gas. On the other hand, if I cause a crash and you get hurt, you are covered for at least a million or two, if I am correct about the coverage of the COMMERCIAL insurance my company pays for at a very handsome rate, given that we are all professional drivers that collectively haven’t had an at-fault accident in years.
Here’s a video about Uber that explains these issues in detail… ten minutes long, but worth watching if you care about things like public safety, or more correctly, your own personal safety.
Now that I have explained why Uber sucks for passengers, let me explain why Uber sucks for the drivers. Put simply, there’s no money in this. Yes, I have seen the stories about Uber drivers making 80 grand a year, and it sounds like horseshit to me. Maybe this works in San Francisco or New York, but it isn’t going to work here. I talked to an Uber driver a while back, and he showed me a summary report of his last weeks’ work on his phone, and after doing some quick math, I determined that he is lucky to earn 25 or 30 cents per mile. This is an important metric for a taxi driver, ESPECIALLY if you own the car. It’s one thing if you are leasing a car and the taxi company is paying for repairs and maintenance, but if YOU own the car, you will never last at this rate of pay. Let me explain with some more inside baseball of the taxi business.
There are two types of taxi drivers: those who view this as a job, and those who view this as a business. Metrics and statistics matter, especially if you own your car. Some drivers think in terms of getting 100,000 miles out of their car; I think in terms of getting 100,000 DOLLARS out of my car. That difference between your cheaper Uber fare and my fare is still being paid, my friend, but it is YOU that is paying that difference, with wear and tear on your car.
There is a discussion forum called UberPeople.net for Uber and Lyft drivers, and I saw a post there by a new driver in Tampa that was attempting to do the math… I don’t work in Tampa, but this post by Uber driver FLToddy illustrates the numbers really well.
You’re right Tony, once you consider all your costs it’s not a great deal without the bonuses. If they ever start charging the $10 per week for the phone, it’s a no-brainer m0ney-drainer for me. Here’s my earnings from this past weekend:
Hours: 9:30 p.m. Saturday night until 3:00 a.m. Sunday (5.5 hours not counting travel to and from service area)
Area: Stayed in the red/hot zone the entire time
# of trips: 8
$5 trip bonus: $40
-Uber commission: $23.60
Fuel expense: $26.34 (at 18.1 MPG and $3.50 per gallon)
Miles driven: 136.2
Wear and tear rate: $0.3394 per mile
(calculated at http://www.ehow.com/how_8259697_calculate-wear-tear.html)
Net earnings: $61.80 (Net minus fuel minus $46.23 wear and tear)
Hourly wage: $11.23
Net earnings without $5 bonus: $21.80
Hourly wage: $3.96
Obviously, if gas prices plummet or I get a super hybrid the numbers would change, but even assuming gas drops by 50% to $1.75 per gallon and I pick up a 38MPG gas sipper, my net without the bonus would be $41.87 with an hourly wage of $7.61, below the minimum wage.
It was a fairly busy night, I average a trip about every 45 minutes and each trip took about 15 minutes before I was back online again. The one exception was my last trip, which was a 40 minute ride that I had to deadhead back as it was all interstate over water.
Hate to be Debbie downer, I’m a numbers guy and I use data like this to help me make decisions. Hopefully there is a huge glaring error in my calculations and I’m actually making $100 per hour. If so, please let me know so I can update my numbers.
No, FLToddy, those numbers are correct, and you aren’t making any mistakes, this is how Uber works. But you did not calculate one very important metric, that being dollars per mile, and in your case, that is $61.80/136= $.45 per mile. That’s actually pretty good, for an Uber driver… well done.
I got into my files and pulled my paperwork from the very same night FLToddy is describing, in a different area of Florida… not a particularly great night for me, but let me post my stats from that very same night, following his formula…
Hours: 4:30 p.m. Saturday night until 3:15 a.m. Sunday (10.75 hours)
# of trips: 16
$5 trip bonus Tips: $88.50 plus a $24 spiff from a tittie bar that pays taxi drivers to bring them patrons = $112.50
Uber commission Vig to my company: $35.00
Fuel expense: $44.00 (at 15.2 MPG and $3.27 per gallon)
Miles driven: 204
Wear and tear rate: $0.3394 per mile
(calculated at http://www.ehow.com/how_8259697_calculate-wear-tear.html)
Net earnings: $244.77 (Net minus fuel minus $69.23 wear and tear)
Hourly wage: $22.76
Dollars per mile: $1.19
And like I said, this was not a great Saturday night for me… I am used to my dollars/hour and dollars/mile numbers being much better, but July in Florida is really slow. Last Sunday, my dollars/mile was $1.80. What FLToddy and most Uber drivers don’t understand is that being a taxi is a very hard life for a car. I can easily drive a thousand miles in a week. In fact, I don’t get an oil change every four thousand miles, I just get one at the beginning of every month… easier to keep track of. The first time an Uber driver has to drop $1,000 for a transmission rebuild, he is going to realize how bad this payscale sucks. I have an envelope stashed in my house with $2,000 in cash inside, at the ready for the next time I have to replace an engine or I need a new transmission or four new tires. I just dropped $360 to get my power door fixed after a drunk broke it. You Uber drivers aren’t calculating the cost of 250 pairs of dirty shoes on your carpets every week, and those four fat mutherfuggers that are destroying your shocks. Your new Kia Soul is sustaining hundreds of dollars of damage per week, even if you can’t see it, and you aren’t making enough money to fix it. All those leftist morons and Occutards that decry capitalism and the “slave wages” of Wal-Mart should be up in arms for you Uber drivers… you are being fucked, by a giant faceless multi-billion dollar global mega-corporation that you can’t even call on the phone.
Here’s the other reason that I am not worried about Uber… this will never work after dark. Read my blog. This might work in the sunlight, but still, I doubt it. The Law Of Averages being what it is, you will eventually encounter a wasted, obnoxious, belligerent douchebag, and if you tell him what you really think of him, he can give you a one-star rating on his Uber app… and if you get more than three or four one-star ratings, you will get suspended for a week or two by Uber. Get a few more, and you won’t get any calls at all. So unless you are willing to eat a couple of double-decker shit sandwiches every damned night and smile while you do it, you aren’t going to last very long.
I am a firm believer in free enterprise, free markets, and competition. If Uber drivers want to pay for a hack license, undergo the background check, get commercial insurance, and pay for their vehicle inspections, I welcome them to try to compete with me, but they are severely handicapped by their low fares and rating system. Once they understand the math and understand what kind of jackasses they have to drive around for that meager pay, they will quit, typically in a month or less.
So, bottom line… if I quit this job tonight in a stuttering rage, something that is a distinct possibility on any given night, I wouldn’t call Uber for a ride, and I wouldn’t allow my wife or child to ride with them, and I certainly wouldn’t sign up as a driver for them… I understand the math, and I can’t take the pay cut.
*Updated 10 November, 2014
I neglected to mention that Uber’s surge pricing is also something that really sucks for the passenger, but this might be the only way the drivers can make adequate money. When they start getting busy, like when the bars are closing, their rates get jacked through the roof. I’m conflicted on this… part of me thinks that this is evil piracy, and another part of me thinks this is the very flower of free-market capitalism… supply and demand. If you want the ride, you have to pay, and here is the price… do you wish to engage my services or not? Honestly, I do surge pricing as well, but not very often. When I do, it goes something like this…
St Patrick’s Day fell on a Saturday this year, and it has been 50 minutes since the bars closed. There are people literally laying in the gutter, and there are cops, ambulances, and sirens and flashing lights everywhere. The sidewalks are slick with beer, blood, and vomit, and there are hundreds of zombies wearing beads and stupid hats, lurching around in the streets and waving at taxis that are already loaded and leaving this disaster area. One taxi swerves around dozens of zombies and pulls up next to a gentleman in a suit and his very well-dressed female companion. They look like they went to a very nice private party tonight somewhere, but made the mistake of going out into the street and getting sucked into this shit show. The taxi driver yells out the passenger window, “Where are you going?”
The man says they need to go to the Regency Waterside Hotel in a neighboring town. This is a $60 ride to a nice hotel, so a tip of $10 would be expected, and a $20 tip would not be surprising in the least. The taxi driver says, “One hundred bucks.”
The man hesitates a moment, and the taxi driver says, “Look at all these people… do you want this taxi or not?” The man pushes his girl into the car, throws the driver a Benjamin, and they are thankfully whisked away from this McZombie Apocalypse, and after realizing that their driver turns out to be a friendly and interesting gentleman with an amusing anecdote or two to tell, he gives him another twenty when they arrive at their hotel.
On the other hand, Uber’s surge pricing seems extremely predatory to me… gouging drunks strikes me like charging triple for food or gas right before a hurricane hits. That’s right, Uber is requiring those same wasted douchebags I warned you about to do complex math right at bar close while they are shithammered, and to push the “Accept” button to buttfuck their debit card for double or triple or quadruple my fare. Remember what I said about this not working after dark? Who wouldn’t delete this shit off their phone the second they realized that they got utterly fucked on a $25 taxi fare they paid $362 bucks for? How many hungover people have to look at their online banking the next morning and say, “You gotta be shitting me!” before this crap collapses? I would say “Caveat Emptor“, but in my experience, very few drunks speak Latin.
Hat-tip to HotAir.com commenter Newtie And The Beauty for bringing that story to my attention… I know getting a shout-out at this dump isn’t as prestigious as one from say, “Special Report with Bret Baier”, but hey… you’re my favorite bartender, and we do share that ONE PARTICULAR BAR we have in common, but the less said about that, the better, amirite? Anyway, nice find, babe… well done.