By Guest Indiana
NEW YORK — The executives at Uber are working hard to design a future where the company earns billions of dollars by allowing riders to summon fully automated robotaxis.
Until then, they must rely on an army of human drivers — nearly 4 million across the globe — to keep the business humming. The challenge is to figure out how to make their drivers happy while also making money, and right now the company is losing on both fronts as it heads into its initial public offering on Friday — the largest technology IPO of the year.
Drivers complain about low wages and being classified as contract workers instead of employees, which cuts them off from the benefits that go with it.
Lyft, which beat Uber to the public market last month, is dealing with similar issues. On Wednesday, drivers for both companies participated in strikes across the country, pledging to turn off their apps for hours to call attention to their plight, although it’s unclear how many actually took part and the impact on customers appeared minimal.
“The drivers are the one who helped Uber to be $100 billion, nobody else, and the drivers are the ones who are suffering,” said Inder Parmar, 54, an Uber driver who lives in a suburb of New York City. “Uber and Lyft, they figured out how to exploit the drivers, and that’s what they’re doing right now.”
via .ORGWorld News
It's been abandoned since 1988, but today, we get a glimpse of its bright future:
Ford (+0.93%) bought the building in May, and it's announcing its ambitious plans in aÂ celebrationÂ this morning. The company, which also bought up nearby properties, will eventually occupyÂ 1.2 million sq ftÂ in the station's neighborhood (called Corktown). The Corktown campus will be "an innovation hub for Ford's vision for the future of transportation."Â Why we're watching the livestream:Â Detroit nativeÂ Big SeanÂ will be performing.Â Bottom line:Â Michigan Central Station is more than a buildingÂ—it's a symbol of Detroit's rise and fall...and current renaissance. For Ford to come in and open it again is aÂ reallyÂ exciting moment for the city.
Lump a bunch of MIT researchers into an Uber and they’ll come out with a thesis. In this case, aÂ new studyÂ titledÂ The Economics of Ride-Hailing: Driver Revenue, Expenses and Taxes.
Drivers for Uber and Lyft make a median hourly profit of $3.37 74% of drivers earn less than minimum wageÂ 30% of drivers lose money every mile Who (or whatÂ’s) to blame? Gig economy business models that saddle employees with fixed costs (e.g. cars), while their income shrinks due to industry competition.
But Uber said weÂ’ve got some numbers of our own:Â Two studiesÂ from 2015 and 2017 put average hourly earnings at $19.04 and $21.07, respectively. In a weekend post on Medium, it also convincingly pointed out how MITÂ’s methodology was flawed.Â
Then there was thisÂ…
MITÂ’s lead authorÂ shouldered the criticism and agreed to take another look. So for now, weÂ’re still left wondering: is it better to have a minimum wage job or Â“be your own bossÂ” in the gig economy?
© LUCY NICHOLSON/Reuters/Corbis
Tempted by the idea of using your car and your free time to bring in some extra money? Before you jump onto the ridesharing wagon, make sure you know what you're getting into.
App-based ridesharing companies promise you can "earn good money" (Uber), meet "awesome, friendly people" (Lyft) and be "in control" as your own boss (Sidecar), but drivers provide a more nuanced and realistic picture.
"Being a rideshare driver can be a good source of income, but you have to view it as running your own business," says Josh, an Uber and Lyft driver in Indianapolis. "You have to track your miles for tax deductions and understand your insurance coverage."
Don't quit your day job
Ryder Pearce, co-founder of SherpaShare, a Menlo Park, California, company that provides income analytics for rideshare drivers, says 70 percent of drivers work full time at other jobs and rideshare drive for supplemental income. Only 20 percent drive more than 40 hours per week, according to SherpaShare data.
While some drivers have complaints about their experiences, SherpaShare's year-end 2014 survey of drivers found that 80 percent planned to continue their rideshare work in 2015.
Thinking of joining them? Here are six things you need to know.
Uber has claimed that its full-time drivers in New York City make more than $90,000 per year. But SherpaShare's survey of nearly 250 rideshare drivers found that only 2 percent had earned more than $75,000 in 2014. More than half the drivers (56 percent) said they made $10,000 or less.
Uber says its drivers make an average of $19 per hour, and the websites for Lyft and Sidecar boast that you can earn up to $35 an hour. "Unfortunately," says Pearce, "a lot of drivers don't track their miles and their expenses such as fuel, insurance, taxes and depreciation, which cut into their income."
It might be best to drive part time
The fastest-growing group of drivers comprises those who choose to get behind the wheel part time.
"You can make more money driving 10 to 15 hours per week than driving full time," says Simon, a rideshare driver in Boston. "You make the most money during peak evening and weekend hours, and there just aren't very many requests for drivers during the day."
Josh switched from full-time driving to part time, particularly after Uber cut fares twice. He says the cuts reduced his pay by 45 percent.
"Two-thirds of drivers work for more than one rideshare company so they can earn more money," says Pearce. He says drivers can simultaneously monitor the different services' mobile apps that connect riders and drivers.
Both Josh and Simon drive for two or three rideshare companies at a time to maximize their profits.
Good to have a fallback
"It's best to sign up for at least two companies so that when one is slow, the other one might be busier," says Simon. "Uber's usually busier in Boston."
But not all drivers qualify to work for every company, Simon warns. For example, Uber requires its drivers to use newer-model cars than Lyft.
Insurance coverage has been something of a gray area for rideshare drivers. Some insurers have said ferrying paying passengers around is a commercial activity not covered by personal auto insurance. Simon says some drivers have told him their insurance companies dropped them because of their rideshare driving.
Informal surveys have found many drivers just don't tell their insurance company about their ridesharing work, but that puts a driver at risk of having any insurance claims denied.
New insurance products for ridesharing
Now, however, several insurance companies are offering special policies or add-ons for rideshare drivers. MetLife, for example, has a policy that's so far available only to Lyft drivers in Colorado.
"Typically, drivers first have to go to their personal insurance coverage for a claim, even when they have a passenger in a car or are driving to pick up a passenger, or if they're waiting for a call for a driving job," says James Dufault, property and casualty project strategist for MetLife Auto and Home. "The MetLife endorsement for Lyft drivers provides coverage in all three periods up to the driver's policy limit and then (Lyft's own liability) coverage kicks in for higher amounts."
USAA, Farmers, Geico and Erie Insurance also have launched rideshare products, in limited states.
Before you start driving for a rideshare company, you'd better know whether the service is even allowed where you live.
Cities and states have struggled with how to regulate companies such as Uber, Lyft and Sidecar to make sure consumers are protected. Some places have banned the services outright.
Virginia had one such ban, but the state recently agreed to allow the companies to operate if they do background checks on drivers and provide them with $1 million in liability insurance.
You'll need to check local regulations
"Drivers are vulnerable to losing income if they start driving for a company that might be shut down, but most cities are trying to work out ways to allow ridesharing companies to operate," says Pearce.
At the same time, nearly every community has regulations that impact your ability to make money by driving, says Josh.
"Some cities require you to have a newer-model car in order to be a rideshare driver," says Simon, adding that in other places the drivers aren't allowed to pick up passengers at the airport. "But in Boston, dropping someone at the airport can be lucrative even if you have to drive back with an empty car."
"New drivers often don't realize they need to file and pay taxes on their rideshare income," says Pearce. "In order to estimate their taxes and take the appropriate deduction, they need to track their miles."
While specific, deductible expenses can be tracked along with miles, most drivers opt to take the 56-cents-per-mile standard write-off for business use of a car, Pearce says.
The drivers are independent contractors who receive an IRS Form 1099 reporting their compensation from each rideshare company. They must pay self-employment taxes of 15.3 percent on their first $117,000 of income in 2014, says Barbara Taibi, a partner at accounting firm EisnerAmper in Iselin, New Jersey.
You may need to pay estimated taxes
"It's your responsibility to pay both the employer and the employee portion of your Social Security and Medicare taxes, as well as federal and state income taxes on this extra income," she explains, adding: "If you're generating income throughout the year, remember that estimated taxes are due."
That means you need to make payments throughout the year totaling at least 100 percent of what you paid in the previous year or at least 90 percent of your likely tax bill for the current year, says Taibi.
When you drive for a ridesharing service, you're not the only one working. Your car is putting in the hours, too.
"A lot of drivers who are less mechanically savvy don't think about the added wear and tear on their cars, especially if they spend time idling their car while they wait for passengers," notes Josh.
Most likely, the extra miles driven by rideshare drivers are city miles, says Dan Edmunds, director of vehicle testing for the automotive website Edmunds.com in Santa Monica, California. That means the brakes get exercised more because of stop-and-go traffic.
You may go through brakes quickly
"The more miles you drive and the more fuel you burn, the more your whole car is affected, but unless you have a Prius, you're likely to need to replace your brake pads sooner," Edmunds says. "A Prius uses a magnetic belt to brake so you have less pronounced friction."
He adds that the faster drivers accumulate miles, the sooner they will need to change their oil and replace their tires.
"Being a rideshare driver can also change your resale value because you have more people getting in and out of your back seat and more likelihood that something will get spilled," says Edmunds.
Ridesharing services like Uber and Lyft can be a great way for drivers to earn extra cash, and for passengers to get a ride whenever they want. However, the increasing popularity of ridesharing means that both drivers and passengers may sometimes forget that they should still take some basic safety precautions. Here’s what you need to know to help you have a pleasant ridesharing experience.
Tips for Ridesharing Drivers
Park your vehicle carefully. To help avoid getting hit or being hit by another car when you stop to pick up a passenger, always take time to park in a safe spot, suggests SherpaShare. Your passenger may have to walk a few extra steps, but it might be worth it. Also, be careful that you don’t park over a crosswalk or in any spot that could endanger pedestrians, says SherpaShare.
Assess passengers before they get in your car. Drivers have the option of declining rides to passengers if they feel their safety might be compromised. This may sometimes be a smart choice, even if doing so results in a slight ding to your “star” (customer satisfaction) ratings, says U.S. News & World Report. It’s always important to weigh your own personal safety against your money-making aspirations, says the news organization.
Carefully choose your hours and neighborhoods. One of the prime benefits of ridesharing work is that drivers typically get to choose their work hours and locations. If you prefer, you can opt to avoid driving during the late-night hours when crime may be more likely, suggests Ride Share Academy. Drivers can also use crime-mapping apps and websites that track safety statistics for various neighborhoods. If you’re not comfortable with the app’s reports on certain neighborhoods, you can wait for ride requests in other areas.
Install a dash cam. Just seeing that you have a dashboard camera may discourage some passengers from acting unruly. And in case you do end up with a ridesharing experience that turns into a safety incident or lawsuit, your dash cam will have footage of the incident, according to The Ride Share Guy.
Tips for Ridesharing Passengers
Be sure you’re getting in the correct car. That may sound obvious, but if you’re in a large group of people leaving a concert, for instance, you may see multiple ridesharing cars lined up one after another, notes Angie’s List. It’s easier than you think to get into the wrong car — or even into a car fraudulently posing as a rideshare vehicle — and not realize your mistake until you’re out in traffic. Be sure to confirm the car model, color, license plate number and driver’s picture on your ridesharing app before entering the vehicle.
Leave the ride early. If you feel uncomfortable about the driver or the ride, tell the driver to let you out early, before you reach your destination, suggests NerdWallet. Pick a safe spot, then call a friend, cab, or another rideshare driver. It may also a good idea to have a fully-charged cell phone and a small amount of cash or your credit card with you during a ride, too, suggests NerdWallet.
Don’t give drivers cash. Uber and Lyft both charge your credit card for your ride. Part of the appeal of these services is the convenience, which typically means there’s no reason for a driver to ask you for cash, says Moneycrashers.com. If they do, say no and strongly consider declining the ride or getting out of the car early, suggests Angie’s List. Also, be sure to report the driver to the ridesharing company.
Ride in the back. Usually, drivers for ridesharing companies undergo a criminal background check. The two largest companies (Lyft and Uber) explain on their websites that all drivers must pass a background check. However, there’s always a chance that you could ride with a driver who displays inappropriate behavior. Angie’s List suggests that passengers always ride in the back of the car as a precaution — unless, of course, you have too many passengers to fit in the back. Another good practice: Exit on the curb side, not the traffic side, of the car.
If you use some common sense, and keep these safety tips in mind, the ridesharing arrangement can be a good option for both drivers and passengers.
One of the best feelings you can have as a rideshare driver is opening up your driver summary and seeing those big tips. A lot of people have their own methods to scoring the big tips but I wanted to share what I do.
1. Don’t Ask for It
Every passenger that gets into your car knows how tipping works. For drivers, no matter what you do or how nice you are, there are always going to be people that won’t tip. Forget about those guys, you want to focus on the people who do tip. The one thing that turns me off most as a passenger is when drivers ask for five star ratings or remind me to give them a tip if they liked the service. Dude I know I’m supposed to tip, you don’t have to tell me!
2. Make it Easy to Accept Tips
One of the big problems with the Lyft app is the tipping feature, nobody can figure it out! I’ve had people ask me how to tip and I’ve even had one guy show me that he tipped me but then I never got the tip. I think he forgot to confirm the tip or something like that. As drivers, we can’t do much about the functionality of the app but we can do everything in our power to help riders figure out how to tip.
Once in a while you’ll get a rider who wants to tip in cash and personally, I have no problem with that. Until Lyft figures out a better way to give tips, I’ll take cash and say thanks. I’ll pretty much accept anything, I’ve even had a passenger buy me a beer once we got to our destination.
3. Be Yourself
If you’re out driving for tips, you’re probably going to be sorely disappointed at the end of the night. Don’t try to be someone you’re not in order to impress a passenger or make them like you more. Just be yourself and when you make a connection, you’re a lot more likely to be rewarded.
4. Go Out of Your Way
The big reason why I started taking Lyft and Uber was because the drivers were a lot nicer than most taxi drivers. I rarely took a taxi before because the drivers were rude, didn’t accept credit cards and just went out of their way to make things miserable for you. That’s not a good business model for an industry that is all about customer service. It’s also probably why they are floundering at the way side while Uber, Lyft and Sidecar are taking off.
So with that in mind, treat your passengers like they are one of your own children. If they need a few minutes to get ready, tell them to take their time. If you hear them talking about making a pit stop to pick up a six pack, offer to drive them to the store and wait for them. Little things like that may cost you a few bucks in the short term but over the long term that passenger will remember an experience like that. If in doubt, just give them the pickle!
5. Don’t Be in a Hurry
Passengers aren’t stupid. They can tell when drivers are irritated, flustered or hurried. Unless the passenger tells you they’re in a hurry, drive the speed limit, obey all traffic laws and focus on your passenger. Don’t worry about your next passenger, worry about your current one.
6. Provide Extras
If you want to get better tips than the average driver, you need to go above and beyond what the average driver does. I carry water, gum and mints in my car at all times but sometimes I’ll throw in little unique extras like mini bottles of Purell or holiday themed candy. Not only does this make for a more enjoyable ride but it also makes you stand out compared to your peers.
7. Be Unique
Along the lines of tip #6, I think being unique is one of the best ways to get bigger tips. A lot of drivers out there are nice and courteous but they don’t stand out. Some of the most fun rides I’ve had as a passenger were with unique drivers. I still remember a ride I took a year or two ago with a guy named Mohammed who called himself the party cab. He had lots of lights and music and it was one of the most fun rides I’ve ever taken. And I’m pretty sure I gave him a massive tip! I was kind of wasted though, so I don’t quite remember ?
You don’t have to go to that extreme but think about what other drivers are doing and do something different.
8. Show Interest in Your Passenger
I love having conversations with my passenger but it’s important to remember that the ride isn’t all about you. Instead of clamoring on about why you love driving for Lyft or Uber, ask the passenger what they do and get to know them a little bit.
9. Get Married
Ok this is something I’m still testing out but another Lyft driver told me that he always mentions to his passengers that he’s getting married so he needs the extra money haha! I think that’s pretty funny and since I’m getting married this summer I might have to try it out. You non-married folk might be thinking this sounds a little cheesy but weddings are damn expensive!
10. Just Show Them How to Tip
If you are really looking for bigger tips, then why beat around the bush? Ask them if they need any help with payment or tipping once the ride is over. I don’t use this strategy myself but I know there are many out there who do it. A less intrusive method could be a small index card taped to the back of the seat that has detailed instructions on how to add a tip.
So readers, what do you think about my top ten ways to get a bigger tip? Is there anything I missed on or that you would or wouldn’t do?
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