
How Much do Boston UberX Drivers Make in a Night? - ovechtrick
http://bostinno.streetwise.co/2014/05/27/how-much-money-do-boston-uberx-drivers-make/
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vitd
Am I misunderstanding, or did the article gloss over the cost of keeping up
your car as a driver? They talk about how renting a cab costs a certain amount
up-front, plus insurance, plus some other stuff. Then they sort of hand-wave
that an Uber driver also has those costs. I don't doubt that the rental fees
are expensive, but it seems an unfair comparison when the rental fees pay for
maintenance of the car, and they don't include maintenance that Uber drivers
have to do. And I don't know of any jurisdictions in the US where you don't
need insurance to drive.

I also found it interesting that the rental fees include a 30 cent parking-
violation fee. At my office we had a problem with Uber who were constantly
parking illegally in front of our building. So they're getting the benefit of
illegal parking without paying the (admittedly small) fee that cabbies have to
pay. Of course it costs less! Especially if you don't count keeping up your
car and the community!

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autarch
Well, you can factor in car maintenance to your costs as a driver. Given that
the drivers would probably _own_ a car regardless (because they need it for
other things) the additional wear and tear is almost certainly more than
compensated for with the extra income.

Also, if this is self-employment (which it sounds like it is) then the drivers
can deduct $0.56 per mile they drive from their taxes.

As for a violation fee, I assume that for cabbies that's to cover the cost of
tickets they get, not that it exempts them from receiving them. With Uber, you
can judge the risk yourself. Presumably, just like with a taxi, it makes sense
to accept an occasional ticket as the cost of doing business.

Overall, it seems like it's economically reasonable to be an Uber driver.

The big difference between Uber and a cab is that the existing regulatory
regimes in many cities allow the cab company owners to extract most of the
value from their drivers.

~~~
objclxt
> _Also, if this is self-employment (which it sounds like it is) then the
> drivers can deduct $0.56 per mile they drive from their taxes._

You deduct it from your reported _income_ , not your _taxes_. This is a fairly
important distinction, although it is still a useful benefit.

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joosters
The linked article -
[http://www.bostonglobe.com/metro/2013/03/30/spotlight/9eVWW7...](http://www.bostonglobe.com/metro/2013/03/30/spotlight/9eVWW7Y6RaOIqII62n2XlI/story.html)
is a real eye-opener about the costs that traditional taxi drivers have to pay
in order to work a shift. I'm no Uber fan but you can see how drivers would
prefer working for them.

The long-term question is, will Uber stay a better-behaved taxi service owner
if/when it cracks the market?

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n00j
Thats true, it seems like a huge expense to for a shift:

 _Boston Cab charges [the undercover Globe reporter] the standard shift rate
of $77, plus an $18 premium for a newer cab, as well as a city-sanctioned,
30-cent parking violation fee. Factor in the sales tax ($5.96) and optional
collision damage waiver ($5), and his cost per shift is $106.26, not including
gas._

But then you have to factor in that for UberX you have to own your own car,
your own insurance and you have maintenance costs associated with your car.
Probably still comes out cheaper / have more flexibilty with UberX, but would
like to see a more in depth comparison of the costs of both.

~~~
elements
If a driver does 15 shifts per month (which would be a pretty lazy schedule
for most full-time cabbies I've talked to), you're looking at roughly $1500
per month just to use the car. A quick google search indicates that the MSRPs
for top-of-the-line Toyota Camrys and Chevy Malibus (just a couple of cars I
thought might be well-suited to the task) are around $30,000, which, at 3%
over 5 years, would require a monthly payment of about $540. But let's round
that up to $600 to cover taxes and anything else that might be rolled into the
loan.

As for insurance, I think $200/mo is probably a conservative guess. I pay way
less than that as a 20-something male driving a "high risk" vehicle.

That brings us to $800/mo, leaving $700 to cover maintenance. I'm sure
maintenance costs would be quite a bit above average given how much the car is
driven, but I can't imagine they'd come anywhere near $700/mo, especially in
the first five years (the term of the loan). After the car is paid for, you
can either continue to drive it if it's cheaper to do that, or you can sell it
for a few thousand bucks and start over. Plus, you don't have to buy your own
car, since you've already got it, which would save you a few hundred every
month.

Not exactly an in-depth look at the issue, but it seem likely that you're
better off owning your own vehicle.

Unrelated, but my worry (for the drivers, anyway, both full-time and casual)
is that given the low barriers to entry, a lot of people who own vehicles
already will see how they can make some decent money on a casual basis with
just slightly higher maintenance costs, and before long, there will be enough
UberX drivers that the amount of time spent waiting to get a fare will bring
the hourly wages down considerably. Maybe they'll limit the number of new
drivers after a point or something, I have no idea, but I'd be concerned about
that if I were a driver.

Not exactly relevant, but I was chatting with one UberX driver a few weekends
ago, and she told me that the company sends each driver a monthly spreadsheet
of metrics for that driver, allowing them to track their own performance. I
thought that was interesting.

~~~
hnnewguy
> _As for insurance, I think $200 /mo is probably a conservative guess_

Conservative? I think you are _severely_ underestimating the cost of obtaining
insurance that covers the liability of injuring _multiple_ passengers that you
are transporting around as a "for hire" driver.

Much like AirBnB, people seem to overlook this cost and responsibility. That
will change when an Uber driver slams into another car with 5 passengers,
killing someone, or an AirBnB user, there "illegally", burns down an apartment
complex. It will be the end of these businesses.

I'm not saying that these models can't work. But right now, much of the cost
advantages come from working around regulations.

~~~
dnautics
the ridesharing companies provide insurance on top of personal insurance. Both
Uber and Lyft have $1M liability + casualty insurance while you're
transporting passengers, and Lyft has $1M policy while you're not (don't know
about Uber on that one).

The insurance premiums for these companies (I know Lyft partners with Met
Life) probably is adjusted downwards relative to taxis, because of several
factors, but the biggest one being that the drivers own their own cars and are
out of it if they wreck it, so there's a good reason not to drive dangerously.
A larger proportion of Uber and Lyft drivers have been driving american
streets for longer periods, and also have educations, for whatever statistical
benefit that confers. Finally, the taxis are, in the end, smaller companies,
so the rideshares can negotiate better deals and also provide far more
statistical data to the adjusters, which enables a narrower margin.

~~~
hnnewguy
> _Both Uber and Lyft have $1M liability + casualty insurance while you 're
> transporting passenger_

Well, I'm not going to claim to be an expert on such matters, but I believe
$1MM is the minimum that is offered for liability insurance on a driver's
policy here in Canada. I'm not sure how far that'd go if you killed multiple
passengers in a vehicle accident, especially if you were found negligent.

Again, this isn't to say that these are insurmountable problems, by any means.
You can insure _anything_ for the right price. But how many people are
actually sufficiently insured? And how many users are checking, or even care?
I can't see this _not_ being a problem in the future.

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smackfu
All these drivers talk about liking how they can work when they want. It makes
me wonder if Uber ever goes into Surge pricing on times where the demand is
low, but the supply is even lower, like Sunday mornings.

(Also, the close button on site's popup "please sign up to be spammed" window
is almost invisible with dark grey on black. So scammy.)

~~~
elements
I was hanging out with a buddy while he experimented with this. The quoted
fare dropped from over $30 at around 2am (when all bars are legally required
to close in my state) to around $20 about 30-40 minutes later.

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dnautics
I should add one anecdote, there is a guy in San Diego who is using
ridesharing to try to make $150,000 in the year and start up a company. In
order to do this, he has to make ~3k a week, and I think it's impressive that
he's been consistently doing this for about 3 months now. It will take a
serious toll on him (we're talking 50-60 hour weeks, and I am not sure he's
taking getting sick into account) and I seriously worry about some his
business judgements. Nonetheless, he is on track and about a quarter of the
way there.

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marbemac
I'm confused about these lines:

"As self-employed, independent contractors, though, UberX drivers receive a
Form 1099-MISC...Subsequently, UberX drivers are hit with a 5.6 percent tax
deduction for each mile they drive...if he or she drove 100 miles, he or she
will be taxed $56 (5.6 percent tax x 100 miles driven)."

Why is this the case? In my experience with 1099s, they have nothing to do
with miles driven. In any case, I don't understand how 5.6% of 100 = $56.
Could somebody please elaborate on this?

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gamblor956
The deduction is $0.56/mile, for a $56 deduction (not a tax) for every 100
miles driven. The deduction is in lieu of the separate deductions for gas,
wear and tear, insurance, etc., so the driver must choose either to take the
mileage deduction _or_ to separately deduct their driving-income expenses.

It's not clear why UberX drivers are being hit with a deduction by Uber on
their 1099s, since they--not Uber--are the ones that get the deduction. It
sounds like the writer is simply confused about what is actually happening.
Based on the magic math of the rest of the article, I'm guessing that the
writer doesn't know what they're talking about.

~~~
chrismcb
Considering they mentioned several times "5.6 percent per mile driven" I'd go
with confused camp... Otherwise you'll drive 100 miles and get a 560 percent
tax break!

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noname123
Damn, $300/night. So that's like 9 grand/month if you work every night. And
probably can under-report tips and meet interesting people too instead of
wasting hard earned cash buying rounds at overpriced bars and lounges on
weekends.

Beats working for a Boston IT company where you make about 100-120K a year but
get taxed like crazy.

~~~
aetherson
Well, according to the article:

    
    
      Uber's Kaitlin Durkosh confirmed UberX drivers receive up
      to 80 percent of each fare. "On average, uberX drivers in
      Boston make about $25.93 an hour, which equates to nearly
      $54,000 a year (gross income), if drivers work 40
      hours/week for 52 weeks/year... gross income can be even
      higher if partner drivers decide to work more than 40
      hours/week, Durkosh continued.
    

At $26/hour, it's only $300/night if you work 12 hour "nights." I'll guarantee
that when she says $26 per hour, she's assuming a solid hour worked without
breaks. And, actually, it's deeply unlikely that any driver makes an average
of $26 per hour over a 12 hour shift, 5 days a week -- the average is going to
be inflated by the fact that most drivers work during the high demand hours
around rush hour and Friday and Saturday night, when not only are rides more
frequent, but surge pricing goes into effect.

~~~
dnautics
I make an average of > $25/hour over 30-40 hours (on lyft, for which I have 12
weeks of data). During surge pricing the hourly on uber goes to nearly $40 -
$50/hour, but i only have one weekend of data for this, and the hours are
cherry-picked (there's a lot of strategic "do i use lyft, do i use uber, or do
I use both" going on.

~~~
aetherson
Okay, but presumably Durkosh, an Uber representative, is reporting data, not
anecdotes, when she says that the average is $26/hour, right? Are you
suggesting that she's underreporting the true average, or that she doesn't
know what the average amount they pay their drivers is?

~~~
dnautics
No, I'm suggesting that it is very reasonable that this is the true average.
May not be the true median, though, given the 80-20 principle and uneven
distribution of skill.

~~~
aetherson
Cool. Sorry if I was confrontational -- the article irritated me on the
grounds of sloppy journalism and wide-eyed ingenuousness, and I took it out on
you.

~~~
dnautics
no worries, I didn't take your comments to be confrontational at all; and the
article irritated me too, which is why I'm here offering better information!

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pbhjpbhj
Surely insurance companies exclude driving for hire or similar from the
insured uses of vehicles in the USA? They certainly do in UK. If you drove as
an unlicensed taxi-driver and took a consideration you'd be driving without
insurance.

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lukethomas
I talked with a BOS driver who had a Toyota Sienna and participated in UberX
and UberXL. For UberX, they take 20%, and for UberXL they take 28% (he also
mentioned he ended up being paid the same on both tiers.)

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ollyfg
I really like how this article answers the question in the headline in the
first few lines. Too many launch into an in-depth discussion and seem to
forget that the article may just be browsed over quickly.

