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Business

The Real Story of Uber Salaries

Last month, I had a conversation with an exasperated operator who had just lost another chauffeur to a TNC. In this particular case, the company used an employee model with company-owned vehicles, but the younger chauffeur—who had been doing work on the side for UberX in his personal vehicle—was convinced that he could make a lot more money and have a better schedule by working for the rideshares. Was that decision the product of a poorly managed transportation company or a slick marketing campaign by the TNCs? Maybe you’ve faced a similar situation with a chauffeur?

In late August, Uber CEO Travis Kalanick claimed that the company was adding nearly 50,000 drivers per month to its roster, up from 20,000 per month just months before—great for them, but does that new hiring pace reflect an increased demand for service, or is he simply glutting the market and diluting wages for his current faithful drivers? Uber itself released a report that the “median UberX small business income per year is $90,766 (NYC) and $74,191 (San Francisco).” If you visit Craigslist, ads fill the pages with promises of $1,000 per week in New Jersey or $1,850 if you’re looking in San Francisco. Ads specifically list that drivers don’t need a special license, commercial insurance, or any professional driving experience. You can even use your own car, as long as it’s model year 2005 or newer and you have personal insurance. Sign me up!

But did you catch how Uber phrased it? “Small business income” is not the same as salary. It also doesn’t factor in Uber’s 20 percent cut (25 percent in some cities) for UberX drivers, gas, tolls, maintenance, car washes and vacuuming, insurance, and wear and tear on your body. It also says that the median small business income was achieved by working more than 40 hours per week, but it doesn’t quantify how many more hours. For all we know, the drivers were working 12 hours a day, every day of the week. How’s that for safety, regulators? So let’s get to the nitty-gritty: Are drivers really making that much? We did some digging and found a handful of Uber and UberX drivers all over the country who would talk to us anonymously. We had to be fair, because let’s face it: If Uber would “deactivate” a driver for a few bad passenger reviews, what would it do to someone who spoke critically of the company? We didn’t want anyone to lose their livelihood.

My Boss Is an Email Address

“The weirdest part about working for a company like this is that I don’t ever meet my boss. For some people, that’s cool with them and they want it that way, to be their own manager and such, but I sometimes want to feel like part of a company. If I have a problem or question, I want to talk to a human, not send an email. I had a problem with my pay not showing up for some trips I had, and it was resolved, but I had to send an email and wait. My response was an auto-reply. I didn’t think I’d miss something like that but I did and do,” said one driver from California. “Plus, it can get really lonely on the road. I went online to search other drivers just so I could shoot the sh*t with someone else who’s been there.” I reminded him that as an independent contractor, he was his own boss but he stopped me mid-sentence. “I’m getting a paycheck and they’re still taking a cut. I still have to follow their rules. Sounds like a boss to me.”

Don’t Even Think About That Lease

Last fall, Uber was very proud of its announcement that it was partnering with different manufacturers to get drivers into new cars. In the most extreme cases, it offers weekly leases on new vehicles to drivers with poor credit (it doesn’t offer financing to those folks) with a $1 buyout at the end of the four-year lease. The problem is, most drivers with poor credit would be better off saving up and purchasing a used vehicle rather than being stuck with a payment that could come close to $200 per week, plus a $2,000 security deposit. That’s quite a risk if you get deactivated; that’s quite a risk period for those with weak credit.

My Trainer Is an Online Course

“I’m not a professional driver so it floored me that after being accepted all I had to do was watch a 10-minute video that didn’t even talk about safety,” said a driver from Texas. Forbes reported that Uber is offering driver training for $40 to $65. The course is produced by 7×7 Executive Transportation, a chauffeur service based in San Francisco, and is available only in select cities at this point. According to the article, the course is required for Uber Black drivers and highly suggested for UberX drivers—but not to the point where it becomes mandatory, which would come dangerously close to violating Uber’s coveted independent driver status.

Dropping Rates

I talked to a New Jersey-based UberX driver who was frustrated about new lower rates instituted in his area. “They [Uber] sent out an email earlier in the year that they were lowering rates, but not to panic because lower prices would increase demand and we’d have more trips, so it would all even out. Since that email I haven’t made anywhere close to the same as before. I could go an hour or two without a single ping. That means I spent the entire hour making no money but my expenses didn’t change.”

Work When You Want

Doesn’t it sound blissful: Set your own hours and control your income based on when you want to work. This is probably the most egregious of all the selling points to Uber because working when you want doesn’t always mean that there will be demand. “You know what they don’t tell you when you sign up? You must work at least Saturday night into Sunday morning when the bars close. That’s when you’re going to make the most money,” says a California-based driver. “I’m 25; I don’t want to work Saturday nights. I want to be with my friends. I used to work as a delivery driver and got stuck with these awful shifts, and I didn’t want that with Uber. During weekdays in my area, you’re working the rush hours, too. There are trips during the off-hours, but you’re going to be making less.” Uber must assume that their pool of drivers is already working full time during the day and that this is a second job.

It’s the Driving Between Jobs That Kills Your Per-Hour Average

I asked a California driver if she made the rates that Uber was advertising and here was her biggest pet peeve: the time spent between trips. “The assumption is that I’m going to drop off one passenger and pick one up right there on the spot. It doesn’t work like that,” she says.” If I get a ping right away, I often have to drive at least a few miles to get the next trip, which could be 10 or 15 minutes with traffic. And that’s if I’m the closest driver and accept the trip. People can’t hail me like a cab. That ride had better be a pricey one because I just burned gas to get there. That’s also assuming that the passenger is ready. I’ve waited 10 minutes after arrival (for free) for them to come down. Time is money!”

What Was I Thinking?

“The biggest regret I have is underestimating the costs that I’d have with driving,” said one driver based in the Chicago area. “It used to be three months or more between oil changes and tire rotation but now it’s every month. I’m putting so many extra miles on my car that it doesn’t feel new anymore. People getting in and out of the backseat scratched up the back of the front seats and the inside liner.

I know it’s my business tool and it’s just a car but I didn’t think passengers would be so hard on it.” Online, Uber advertises that you can make $4,800 per month in the Chicago area. When I asked if this was a reality for her, she flatly said: “No, not even close. I do it because I’m making money but it’s not even close to that. Thank goodness I am able to deduct most of my expenses, otherwise it wouldn’t be worth it. I estimate that I’ll make somewhere between $28,000 and $30,000 this year before expenses.” She also commented that she worked about 10 hours per day and always on Friday and Saturday nights.