Why Most Uber Drivers Fail to Make Good Money

Photo courtesy of Pixabay Images by Skitterphoto

Even though the ride-sharing economy has been hailed as a revolutionary innovation that has changed the transport industry for good, Uber drivers are in pain – a lot of pain.

They face a myriad of challenges that the rider cannot even begin to understand. If you are an Uber driver, the following will be your pressure points.

Drivers Don’t Have the Full Picture Uber

Uber limits the driver’s access to information. For example, the average driver is not clear how much commission he earns per ride.

Most drivers do not even know if Uber deducts its fees before or after commission.Vehicle registration fees

Others do not understand the importance of commercial rideshare insurance over and above the one provided by Uber.

There are numerous rules – in fine print – about bonuses fares and the constantly changing fares. You need to be clear about these rules to make money driving for Uber.

An Uber Driver is Responsible for All Expenses

Uber promises its drivers a flexible schedule and a lucrative job, but they conveniently forget to say that the driver is responsible for the expenses of running the car. So that you know, you will be responsible for the following costs;

Standing CostsRunning Costs
DepreciationFuel
Car TaxesMaintenance
InsuranceRepairs and improvements
Inspection feesParking
Car financingTolls
Cost of capitalFines
Vehicle registration feesCar wash

To cut back on your running expenses, you need to start using smart technology such as GOFAR.

GOFAR helps you to find your car engine’s sweet spot, which enables you to drive more efficiently to save fuel.

Areas where the GOFAR app and device can help you include;

  • Tracking the car mileage for tax deductions
  • Alerting you when the car has a fault
  • Explaining the car faults in plain English
  • Reminding the driver of Registration and Insurance
  • Connecting drivers to top-rated mechanics and parts suppliers
  • Saving fuel by finding the engine’s sweet spot

Uber Raises or Lowers Rates Arbitrarily

An Uber driver is the second most important stakeholder in the ridesharing economic model after the rider. Unfortunately, his take on the rate charged to customers is not sought.

Uber bases its pricing on the supply and demand market shifts.

What this means is that even though you can work throughout the day, you will only be able to make profits between 7 AM and 11 AM and 3 PM to 8 PM. During the off-peak times, the fare is too little to make any economic sense for the driver.

The off-peak hours are commonly referred to as “dead hours”, and the miles driven without a customer in the car are known as “dead miles”. Competition has increased the dead hours and dead miles to unsustainable levels.

Uber Encourages Drivers to Take High-Interest Loans

As the ridesharing industry takes root in different cities, Uber needs more drivers. Sometimes these drivers do not have cars. Uber solves this by offering the drivers high-interest loans.

Alternatively, they are directed to the Rent-a-Car model whose rates are even higher.

Just like the first-time home buyers in the US subprime mortgage were duped, so are -the Uber drivers who do not even know what they are buying.

The debt-to-work model being funnelled to the drivers reduces their take-home package by a significant margin.

Uber is Exempted from Government Regulation

World map about Uber legal problems
Photo Courtesy of Wikimedia Commons Images by taxi-deutschland.net

The traditional taxi industry was heavily regulated by the government to protect the drivers from exploitation and enhance public safety.

ities have traditionally limited the number of taxis on their roads to allow the drivers to earn a decent wage.

Uber is exempt from these government policies. No city authority can tell you how many Uber vehicles are on their street, or how many hours the average driver is spending on the road.

The net effect of this is that the public is not safe, and the drivers are taking home less money than their traditional counterparts.

Uber Employees Don’t Have Bargaining Power

Uber drivers are regarded as business partners by Uber and therefore are not entitled to sick days, pension, and workers ’ compensation among other benefits.

The drivers cannot form unions, and so, they address their issues through expensive court processes. The little money they earn is spent on hiring costly legal advice.

Customers Don’t Tip as Generously

Let’s face it! If you had to tip a driver in person, you would be embarrassed to tip them a few dollars after they have offered you a fantastic ride. This embarrassment has been removed by in-app tipping.

Competition from Other Ride Hailing Apps

Uber drivers will continue to see their wages dwindle if the competition in the ridesharing industry is anything to go by.

Uber’s CompetitorServices OfferedThreat to Uber
LyftLyft Line, Plain Lyft, and Lyft Plus- Lyft is working with General Motors GM -who is also an investor in the company-Alphabet's GOOGLE self-driving car subsidiary Waymo, and most recently, self-driving car startup nuTonomy.
Didi ChuxingIt has 99% of China’s market share of the taxi business.- Funded by global giants such as Apple, Tencent and Alibaba
- Strategic partner to Lyft
- Lost $2 billion trying to enter the Chinese market.
CurbIts motto is “all rides begin and end at the curb”. This directly eats into Uber’s base fare.- You can pay fares within the app or with cash in the car.
- You can choose the vehicle that is best suited for your needs.
GrabOperates the whole of Southeast Asia- Has joined forces with Lyft, Didi, and Ola to outcompete Uber
OlaMain operator in India- Has joined forces with Lyft, Didi, and Grab to outcompete Uber
- Allows both cash and digital payments

Self-Driving Cars Already Replacing Drivers

Black car in the city
Photo Courtesy of Wikipedia Images by Timtempleton

Every time a self-driving Waymo car drives itself in the streets, it is taking away a drivers job. Even Uber has started rolling out its self-driving cars on the roads around the world.

Since the driver is the most significant cost in an Uber car, the company would love to get rid of all its drivers and replace them with the self-driving software.

The software doesn’t get tired, ask for leave days, drive carelessly, or even ask for wages. Uber’s cost will only be fixing bugs in the software.

Toxic Culture and Poor Support

Uber’s culture is cutthroat competition for customers. It has very stringent rules for its drivers and offers very little support to its drivers. This means that drivers have to dig deeper into their pockets.

Poor Internet Connectivity in Some Areas

Uber drivers need a reliable internet connection if they are going to get the customer requests. If a driver is working in a city with small internet bandwidth, they will not make enough money to even cover their running costs.

The problem is worse in emerging and developing countries.

Only Tech-Savvy Drivers Can Make Money

In the developing countries, digital literacy among the drivers is low and therefore they are not able to take advantage of the Uber app to make more money.

Revolt from Traditional Taxi Drivers

Uber drivers have been facing numerous revolts in countries where traditional taxi companies had taken root. The traditional taxi drivers claim that Uber’s charges are so low that they get undercut through pricing.

Bad Reputation of Uber Drivers

In some countries, rape cases from Uber drivers have been reported. Female riders have become afraid of riding in car unaccompanied. This has led to depressed ride requests, which in turn reduce the driver’s earnings.

Understanding the things that will reduce your earning potential as an Uber driver is very important. It helps you avoid these situations, and therefore earn a decent wage at the end of the day.

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