Thursday, December 11, 2014

Being a UberX Driver

Post Finalized 2/8/2015
Author: Roy Philipose

I said before that I was going to do a 'Plan D' job (starter job) several months ago. Well I started driving with UberX, here in Philly, late June 2014. Nothing happened with Tesla...at least not yet. I stated that I can help run the company. I have been following Tesla since 2008. You don't know my abilities. You can only assume I lack them. People thought I was crazy afterwards. I am not crazy (mental). That is the danger of running with assumptions. The Internet allows anonymous people to post lies about you. It also shows how so called smart people can make dumb assumptions. We all make mistakes. I don't need any potential employer/investor to look me up, make assumptions, and then pass up on me. "People with passion, talent, and knowledge for something are the ones you want to interview/invest in first." But today it is not about me, it is about Uber.

My main focus is on my startup ShareWi (Wifi on Demand - Get Wifi Anytime, Anywhere, and Get Paid to Share!™) and performing my hip hop music (seeking production help). I know this Uber gig will most likely not take me anywhere. I am not embarrassed to say I drive for Uber. Everyone else, who has given me career advice, should be. Driving for Uber is 'something to do'. That's it. To be honest, you are like a volunteer. Why? Because you will break even or not get paid much, at best. In some markets, drivers can earn something; while in other markets, drivers can earn nothing.

I drove for Uber, for about 2 months, before I realized I didn't make any money. This after I accounted for my expenses correctly. Uber doesn't tell you how to account for expenses. You have to find out on your own...pretty much using the .56c per mile IRS deduction. It is much more than cost of fuel. The actual cost per mile can be lower. After a month of non-driving, I decided to drive again. It is something to do. This time I learned how to drive more profitably. Then after 2 months of more driving, I got into a minor accident (other person's fault). I knew an accident would eventually happen. For a few weeks while my driving was idle: fault was being evaluated, liability assumed, and finally repair work authorized by their insurance company. Uber was not involved here (not necessary). Overall, driving for Uber isn't anything great. But then again all 'Plan D, C' jobs are like that. It is something to do while you work toward something better or create something better for yourself.

I originally did this to take the car out for long rides. Short rides are not good for your car. Eventually your exhaust system will rust out and can lead to an expensive repair. This happened to my previous vehicle. So the purpose for driving was to go on airport rides. But that's the thing. Uber is not a pre-arranged ride. You can not schedule rides.  It is a ride-on-demand. So, basically you are a taxi. Even though you are supposed to be a 'private driver.' If someone requests you, they may tell you to give them a ride that lasts 5 minutes. This after your drove like 15 minutes to pick them up.

There is a plus and a minus to being a driver. The plus is that you have a open schedule/territory. You can work whenever you want, wherever you want. Eventually you will work a standard schedule and territory for yourself. Uber knows this. The minus is that your compensation is less than a standard job per hours worked.

Many will assume and treat you like a taxi. I don't consider myself a taxi driver. I don't act, drive, nor talk like one. (Sorry, I am not here to put anyone down.) I consider myself a private, premium driver with a premium ride. I don't like it when riders get into the car and start to be inconsiderate. That's where the 'rider' ratings come into to play.

Here is a breakdown on how I rate riders:
5) Minus 0 - If they acted well with no problems whatsoever (Most riders get a 5, but not all)
4) Minus 1 - Made me wait long for a pickup, acted obnoxiously, minor smoke smell, smelled in general, treated the car if like taxi, brought smelly food in the car, guest of rider acted bad in some way, brought in 5 passengers when limit is 4 (don't allow - request Uber Suv), touched radio/dash without asking first, left trash behind, unsafe pickup/drop off, entitled jerk attitude, request ride for someone else, bossy, taking advantage, in a rush, foul language, looking down at driver, minor jerk/inconvenience
3) Minus 2 - Ate food in my car, really obnoxious, major smoke smell, don't like the person, not comfortable giving this person a ride again, guest of rider acted really bad in some way, moderate jerk/inconvenience
2) Minus 3 - Never ever want to see this person again, very arrogant or inconsiderate in some major way, major jerk/inconvenience
1) Minus 4 - Well, I haven't given this rating out yet. I would have to contact Uber to majorly complain about this person.
* There are times I make judgement calls on whether I deduct or not.
** The easiest way to get a 5 is to be a 'no-hassle' rider. When we pickup 5s, we know what to expect (unless that person is new).
*** Lately, some riders have become not so friendly and some taking advantage.

Uber wants their drivers to maintain a high rating. We are expected to get 5 stars every time. In the Philadelphia market, I was told 4.7 is the minimum. Ok, I made the minimum rating in 2 months and now exceed it some. I try to give 5 star rides all the time. But I can't control what people give me. Usually I welcome them to Uber and tell them if they need me to make any adjustments, to let me know. Riders don't realize how important the ratings system is. It can mean life or death for the driver. Some riders don't realize that giving 4 stars is bad. In the normal world, a 4/5 would be considered good. But in Uber world, 4 is bad and punishable with termination. It is funny. Uber's own rating on Google is 4.1/5 and on Apple it is 4/5. Can Uber employees be terminated for their so called low ratings? When it comes to driver ratings, it can be hard. I have a saying, "Get a 5 and you stay alive. Get a 4 and you are no more." It doesn't make well for a good work experience when you can be let go at any moment, even though you are doing a good job. The unbalanced rating system adds another layer of stress. A bad rider can setup another profile or take a cab. A bad driver can not and is let go...understandable, but the process needs improvement. If the driver isn't doing a good job, then they should be rated accordingly. I can understand Uber wants to give 'riders' an awesome experience. But if you are going to give the 'drivers' below average compensation, they are not going to be interested. I know, I am not.

Regarding Safety: I don't compromise my safety for anyone. I make sure everyone is safe in my car and make most riders wear their seat belt, especially on the highway. Some don't like it and I have seen my rating drop because of it. There are times when I have to sudden brake. I appreciate the riders who automatically put on their seat belts. There has been several times people have gotten in the car and stated, "I am in a hurry." My saying is this, "If you are in rush, don't hire us." I am not going to speed aggressively and risk getting into an accident, just because you are late. I am not a taxi. I will get you to your destination, safe and fast as possible. As a driver, I am concerned with my personal safety. As my client passenger, you have no safety concern from me.  Note: For you riders out there, please request pickup from a 'safe' location. We are not going to stop in the middle of a busy street to pick you up/drop you off. If we get into an accident, we take the fault and hit (a car almost hit me the other day because of this).

Regarding Surge Pricing: Personally, I don't believe in anything more than 2x rate. If riders can complain about Surge and get their fare reduced, then there is no point. Because the driver's pay will be lowered and the driver's rating will go down as well. This happened to me once so far (reduced fare). A rider complained about the high fare later and my commission was lowered. The gross rider fare was $147 (3x normal rate). Uber dropped it to $57 (they thought I made a mistake, but I didn't). Uber still owes me $90 gross. To me, that is an example of driver 'bait and switch'. I spent an hour with that customer, round trip. I could have taken other fares.

Regarding Tips: Tips are not included with Uber (they never were). Uber has this philosophy that drivers should not be tipped. They believe drivers are making a living and therefore it is not necessary. Most drivers are not making a living. Drivers are in the service industry. Many service workers earn less than or at minimum wage, and try to make up for it in tips. Drivers, on there other hand, are not allowed. Several times I had people want to tip me, but there was no tip option in the app. So some gave me a cash tip, instead. Initially I say, "Not necessary." But they say, "It's ok." The rare tip helps. We can tip the hairdresser, food delivery guy, valet driver, waitress, etc...Why can't we tip the driver? When drivers are doing economically well, then I can understand Uber's philosophy of 'No need to tip.' Tips should be optional.

Regarding Fares: Here is a simple fare example for the Philadelphia market (fares, commissions, and fees vary depending on market.) Say someone wants to go the Philly airport from Wayne, Pa. The ride is about 25 miles and takes about 30 minutes. The gross rider fare is about $50. Uber will take 20% cut. So the partner's (driver) operating fare is now $40. Now from that, the driver has to deduct all their expenses: fuel, car payments, maintenance, depreciation, wear and tear, dings and scratches, etc... The IRS allows .56c per mile maximum deduction. That variable rate is a pretty good estimate. Drivers don't realize their full expenses. So back to the example:
- Rider Gross Fare $50 (what client pays)
- Driver's Operating Fare $40 (Uber 20% cut)
- Driver's Expense $14 (.56c per mile, allowed)
- Driver's Net Gross $26 (before tax)
So the above example looks good. But drivers are not giving airport rides all the time. Many drivers can stay idle for hours and have plenty of unpaid miles. I would say that, the bulk of fares and potential income occurs during peak traveling hours (mornings, evenings, weekends).

Regarding Ratings: (My rating system is written above) I think that it is funny that I see riders with a ratings of 4, 3, even 1, who are allowed to be picked up. I usually pass them by. I let other drivers pick them up. Uber knows that many drivers are in bad shape. That is why many are driving for Uber in the first place. There is an endless supply of drivers out there. The drivers do the heavy lifting, take most of the risk, and get little reward for it. Uber corporate, on the other hand, takes the least amount of risk while getting most of the reward. As for driver feedback, there is very little. Initially when I started, I would talk to the riders and try to have conversations with them (network). Some didn't mind, but I guess some did. My ratings went down. Then I kept quiet, got better at the job, and saw my ratings rise back up. It is hard to please everyone. And at times, rides can be awkward. I recently modified my introduction to allow more talking/networking. You never know who you are going to meet in life. You might be able to help that person or that person might be able to help you. Note: If you want to talk, you have to initiate the conversation. Drivers are willing to talk, but not all. Also, if you are having trouble requesting a Uber (and one is nearby), your rating might be low. I would suggest acting nicer, next time you are in a Uber. Again, we are not taxis.

Regarding Complaints: I think the biggest complaint from 'riders' is the eta (estimated time of arrival). The client app will say 5 minutes. But in reality, it could be 10 minutes. I have had several complaints from passengers stating, "Where are you?" It is the Uber app. It is incorrect at times. Remember, Uber is a startup and technology isn't perfect. I think the biggest complaint from 'drivers' is the ratings system. Again, there is no real 'driver' feedback. So when drivers get less than a 5, we don't why and don't know what to do better for next time. The 5 star tips, that Uber provides, only helps so much.

What is it like being a Uber driver? I get asked this question from time to time. I reply, "It is ok." I can't say that it is bad, nor can I say it is good. But overall I can say, ok. Riders don't see the other side and how hard it can be.  Riders think it is easy to give someone a ride when it is 3x Surge and make easy money. Driving for Uber is not for everyone. I admit some rides are good and I have fun with it. A few times, riders have asked me to hang out with them. I think the next time they ask, I will.

As for the pay?  Well it is more what you make per week then what you make per hour. You are self-employed. There is no set salary or benefits. You are on a commission basis. The hours are normally long and the net pay is normally low. You will see once you start driving. If you want an hourly comparison, drivers can gross anywhere from $0-$25 per hour (depending on markets and times).

As for becoming a profitable driver? Fuel cost will most likely be your biggest expense...so you will want to find ways to minimize that without sacrificing quality. Eventually, through trial and error, you will find a system that works for you. I am trying to get better at it, even though Uber is not really my current focus. You will make mistakes if you have never done this before. The company will give you some time to improve your ratings when you first start out.
* Note: I have noticed more rate cuts in some markets and more drivers on the road. This can make profit more difficult to obtain.

Regarding Independent Contractor Status: Uber states that you are an IC (independent contractor). That I have to disagree with, as many others do. No, you are an employee. You have to follow pretty much everything Uber says. Uber knows this but states otherwise. It makes it easier for them to grow and expand, and bypass some laws. (In truth, you are self-employed. You are running a business. You are an owner/operator.) I am a Uber employee, but I am not getting any stock options. In fact, really that's all I want. I am not looking for a salary, the commission system is fine. I know they can come up with a better/fair model.  But they don't have to. Getting the rider's revenue and maintaining client satisfaction is a high priority for them. Drivers, on the other hand, are a low priority. It is funny that we are called 'Partners'. But we are not. We are micro-managed by the company. And it is annoying. 90% of Uber employees have never driven for Uber and never will. They know what it is like to take a Uber, not actually drive for one (being in the field).

I thought about using the Uber platform and building my own private driver business. An airport shuttle is what I had in mind. I would have drivers and cars. But you can't do that. Uber states you are a 'private driver'. But in reality, you are a taxi. You are supposed to pick people up from everywhere and take them anywhere. If I was an independent contractor, then I should be able to make up some of my own rules. But I am not. I would also have my own rates. (I know there are drivers out there who are scheduling rides. If I really wanted to, I could too.) As a client, I would rather ride with a driver that I know of rather than a newer driver that I don't.

Uber senior management doesn't really listen to anyone and their ethics need improvement. Travis Kalanick, Uber CEO, wants to take over the 'worldwide taxi cab business' and more. He takes an aggressive 'no prisoners' approach. Uber is moving so fast that their feet is barely touching the ground. The company has become the juggernaut of the ride sharing (taxi) industry. Uber will eventually file and go public on the stock market. They will raise more money and grow their business. One reason for the high valuation is the huge market in front of them, their high profit margins, and low risk they have. They have shifted the high risk and low profits (due to high operating expense) to the driver partners. I may buy shares in the company. Why? Because that might be the only way, I become a true 'partner.' I would want to see more done for the drivers first.

Uber might be liked by 90% of the riders, but disliked by 90% of the drivers. I will continue to drive for Uber, but not forever. I personally don't have much passion for driving. My passion is for other things (music, stocks, business) and I focus my energies on that. I do help create some value though, driving. So be it.

As for the future of paid transport? Well the future will be automated and technology will allow that. Anyone working in a low value creation position must understand that their positions are only temporary. The 'partners' will be the first to go. But that won't happen for at least 10 years. The driver 'partners' will have to find ways to create more value than what a robot taxi (machine) can do.

There has been lawsuits proposed by the drivers. I am all up for that. The drivers should be fighting for Uber equity, in addition to more money. That equity would help them with their future financial needs. After the IPO, the majority of Uber employees will become richer while the majority of Uber Partners (drivers) will remain poor.

I stated I was not embarrassed to drive for Uber. Well I am, somewhat. Not because technically, at the moment, I am a taxi driver. It is because the way Uber operates and I work for them. Uber states that they are hiring many drivers. One reason why is because so many drivers are leaving the system. I will eventually leave. One can only hope Uber gets better, over time, for everyone...especially for the 'partners.'

* I look at Uber now as getting paid to network. My ratings may go down. But as long as I keep above 4.7, I am good.
** I noticed that many are not interested in networking. But I still try. Overall, I have made a few good contacts.
*** I am basically done revising/editing the above post. I care not to spend any more time on it. I knew before I started Uber it was BS. Well, after many months, it is still BS. It is far better to take a Uber, than it is to drive for them.

For reference (Uber support website run by others): Uberpeople.net

Dec 14 Rates - $2.25 mile/$0.30 min
Jan 15 Rates - $1.10 mile/$0.18 min
My Stats (June 2014 - Jan 2015):
Rating - 4.83/5.00
Trips - 400s
Stress - Moderate
Risk - High
Profit - Low
Tips - None/Low
Hours - Moderate
Freedom - High
Fun - None/Low
Networking - None/Low
Shift - Day/Evening
Car - Full size
Amenities - Charger/Water
Location - Suburbs/City
PAY
NGA (Net gross average) (before tax)
-- Dec 14 $6.80 Hr / Jan 15 $4.05 Hr
Net gross average = (Monthly (4-5 weeks) Net gross / Hours online)
Net gross = (Uber earnings - Miles, phone, water expense)

© Copyright 2014 Roy Philipose. All rights reserved.