Uber, or not Uber?

November 1, 2016 3:01 AM

I am debating getting a car and becoming an Uber driver. Is this a good plan?

Here's what I'm thinking about while formulating this plan- anything I'm missing?

PROS
I like driving and have a clean driving record.
I have a very flexible schedule and I like making money.
I'm sociable and would probably enjoy most rider interactions (I'm a frequent rider so I have a pretty good sense of what to expect).
I live in a busy part of Toronto, near dense workplaces and many bars, so it would always be easy and quick to get riders, and to quickly head out to take advantage of surge pricing.

CONS
I might not enjoy it.
What if Uber becomes illegal?
I'd probably buy a $13K super reliable secondhand Japanese car if I was going to drive Uber- or a $6K diesel beater if I wasn't going to drive Uber. Which means that "trying" out Uber will cost me an extra $7K up front and higher gas prices forever after (albeit in a better car).

QUESTIONS
If you drive for Uber, do you like it?
What kind of car should I get?
I was thinking I'd buy a used car outright, but I could also lease a new car, I guess? Is that better?
Anything else I should be considering?
Thanks!

posted by pseudostrabismus to Work & Money (20 answers total)

If you think you'll get rich driving UberX in Toronto, think again

...drivers can expect to pocket about $11.50/hour -- only twenty-five cents more than Ontario’s new minimum wage (as of Oct. 1) -- and that’s without factoring in the added cost of commercial insurance.
posted by fairmettle at 3:36 AM on November 1, 2016

I don't drive for Uber and never would. I was driving for a car service here when Uber rolled in. I made more money than those poor souls and it wasn't my car.

If I broke down in the middle of nowhere, somebody would come to tow or fix the vehicle and somebody else would come to get the passengers and I could get home.
posted by Mr. Yuck at 3:38 AM on November 1, 2016

Do you like being up at 2am? Surge pricing can boost the rate. Take a few higher end uberblack rides and talk to the drivers about how busy it is in your area and how they do.
posted by sammyo at 3:40 AM on November 1, 2016

Which means that "trying" out Uber will cost me an extra $7K up front

7k to "try out" what is essentially a minimum wage job is a terrible idea. If you went to work at a Walmart warehouse and they said "oh you need to bring your own forklift, they cost 7k", would that seem like a good way to make money?
posted by EndsOfInvention at 3:42 AM on November 1, 2016

Depending on your current life circumstances, this might work.
I'd suggest getting into the Uber driver forums.
Also talk to as many drivers as possible. Whenever I am in an Uber I ask the drivers how it is going for them.

The people that I know that do it say that you must drive for both Uber and Lyft at the same time in order to make money.
The people that I know that do it say that buying a Prius is a good idea, but do your research because Uber Black might be more worthwhile.
Is Uber allowed at your local airport?
posted by k8t at 3:52 AM on November 1, 2016

Former uber driver of about a year over here (in Richmond, VA). Uber at this point is practically a pyramid scheme in which the company profits off your car and effort, and you make no profit nor receive any benefits because of your independent contractor status. In the old days, when there were fewer drivers and frequent surges, it could be lucrative at times. Now, there are almost no surges (in my area, at least) and the money you make barely cover fuel and wear and tear to your vehicle. Also, re: "you enjoy talking to people"...you might feel differently when those people are drunk. I was the target of constant rudeness (verbal harassment, puking in my car, etc etc) and sexual harassment, but I am a woman so your results may vary.
posted by sparringnarwhal at 5:19 AM on November 1, 2016

In some US cities Uber has a deal with rental car companies to rent a car and use it to drive for Uber.

I'd look into that before buying a car just to do Uber.
posted by osi at 7:07 AM on November 1, 2016

I think it depends on where you live. I work for LYFT sometimes and met a driver in DC that earns a living working 40 hours a week. She even paid off her new car. Then again, she lives in DC where there is demand. In my city, there isn't much.

You may look into LYFT as an alternative, if available. They take less of a cut than UBER and it feels more like an actual company rather than a scam. They also offer a lot of discounts to offset the toll on your car.
posted by Young Kullervo at 7:15 AM on November 1, 2016

I just received my car insurance bill and it now excludes coverage when the vehicle is used in any transportation network. I'm sure that means you need more expensive insurance.
posted by H21 at 7:17 AM on November 1, 2016

Buying a car just to be an UberX driver is a pretty risky move. For the foreseeable future, every new rideshare startup in existence will target Toronto early in its growth and will dump tens of millions of dollars in subsidies and discounts to facilitate getting drivers and fares. This means far fewer surges and Uber likely to lower rates to maintain share.

The only people I know who are happy in the rideshare biz have 10-20 cars on the road and are making modest per-vehicle returns running what's basically a mini-taxi business. Basically, they put down $75,000 on a $200,000 fleet of ten cars, make $3,000 per year per car after all expenses (including depreciation and paying drivers), equals an 15% pre-tax return on investment and a 40% pre-tax return on equity. The killer app on this is the economy of scale AND the fact that they can run their vehicles 100 hours a week with multiple drivers.
posted by MattD at 8:11 AM on November 1, 2016

(Note -- I don't know how they comply with Uber / Lyft etc.'s rules in doing this, or if they are violating those rules flagrantly.)
posted by MattD at 8:12 AM on November 1, 2016

If you already had sunk money in a car, it might be worth it, but it won't pay for itself. I know a guy with a Queens-to-Manhattan commute who does it, and it offsets his transportation cost to work (and he gets entertainment from the passengers.) However: he has a day job, he only turns it on when he feels like it, and can pay his bills without it.
posted by blnkfrnk at 9:59 AM on November 1, 2016

I've never done Uber specifically, but I was a Lyft driver for a hot second.

The work itself is fine if you're an extrovert who enjoys driving. I stopped because it just wasn't that much money considering that I don't like either driving or interacting with strangers very much.

Re your cons, honestly, just do it and be prepared to stop doing it at some point. I did it for about a month? And then I just didn't set the app to driver mode anymore. I guess theoretically I could go back to it if I ever wanted to. The whole enterprise is extremely flexible.

Most people I meet who make a lot of money at it live out in the deeper suburbs and come into the city all day to drive, and they generally have sort of the cab driver mentality of working long hours and being definitively on and off shift. If you live in an urban area with the attendant higher cost of living, and you'd want to drive flexibly on the occasional evening or weekend, you might not profit much.

I would not buy a car for the express purposes of rideshare driving unless you KNOW that this is going to be a large source of income for you. I'm not sure about Uber, but with Lyft I was able to use my ordinary everyday used Toyota Corolla, which is neither very new or very old, and in about average condition. With Lyft it's about access to rides, not about luxury, and they don't appear to care about how nice or new your car is as long as it runs safely and is clean.
posted by Sara C. at 10:55 AM on November 1, 2016

Former taxi driver here.

If you're buying a car specifically for the purpose of driving other people around for money, get one with vinyl upholstery and vinyl flooring.

You do not want to drive around in a cloth-upholstered, carpeted car after somebody has hurled in the back seat. Vinyl scrubs clean. Cloth and carpet never really do.
posted by flabdablet at 11:21 AM on November 1, 2016

Thanks for the insights!
A few further relevant points-

Toronto is a pretty high demand Uber city (we have a lot of young people, a shitty winter, and a public transit culture... coupled with unreliable public transit).

I live in the absolute best part of Toronto for finding Uber riders immediately- there is *always* someone else on my street waving their phone at passing cars.

I've spoken w numerous drivers who gross $25-30/ hour (not counting gas and insurance) - they've actually logged in and shown me their driver accounts showing $600 for about 20-25 hours of driving.

I'd probably get a 3 year old Corolla or Civic with non-fabric upholstery.

All that said- the Wal-Mart forklift analogy is very compelling though!
posted by pseudostrabismus at 11:56 AM on November 1, 2016

For real though, please don't purchase a vehicle with an eye toward doing this.

If you don't already have a car, get a different side gig that doesn't require a car.

If you do already have a car, just do rideshare with the vehicle you have.

If you have a vehicle that is specifically disallowed, like a two-door coupe, I would consider trading it in with an eye towards having the ability to rideshare, if and only if the cost is negligible and it would present other benefits to your quality of life.

Because seriously I had visions of sweet sweet Lyft driver profit that never materialized. Not because it's a scam and rideshare apps are bad, but just because I didn't like doing it that much and didn't make that much money at it. And, I, too, live in a high-demand area where some people make a ton of money driving for Lyft and Uber. It just wasn't for me. And you can't know that it will be for you if you don't even currently own a car.
posted by Sara C. at 2:25 PM on November 1, 2016

If you live in a high-demand city and are comfortable working evenings, weekends, and holidays when surge pricing works in your favor, then yes, you can make decent (not spectacular) money driving.

My roommate works for both Uber and Lyft, alternating the apps as needed to maximize his rides. He drives a LOT, though, and is one of the highest-rated drivers in the city. He also leases a car from Uber, which though expensive at around $800 a month, is off-set by the fact that it is a hybrid (as is all the leased fleet) which allows considerable savings on gas -- a non-negligible expense when you consider how much driving you need to do to be profitable. I wouldn't recommend you try this in a regular, or even a diesel, car. You'll kill all your profit buying gas.

Leasing a car from Uber is also a good way to test run if you'll enjoy it enough to continue. If you hate it, you just return the car and you won't have massive car payments to make for a job you don't want.
posted by ananci at 2:55 PM on November 1, 2016

Here's another thing: complete strangers are sitting behind you and some of them are insane and you're on the highway when you figure this out because they just changed their destination again after an angry phone call that they aggressively escalated and now nobody knows where you are or will be and all you have is the tone of your voice and the exact words you say which must be chosen quickly and carefully. I think I got my biggest tip from somebody who had planned on killing me who thought about it because I said I had a little boy.

Always get out quickly and open the door for the passenger. You can slam it on their head if things don't feel right. You can slam it again. If you think there is some chance of reasoning with them you want to be on your feet with passive body language, make them see both them self and you as human and they give you a big tip and they ask if they can call you directly and you firmly say no.

You read all this crap about passengers not feeling safe and think "Who wouldn't feel safe with me?" I could make some money, I'm nice. And the whole thing turns around on you because the passenger is not right. And they are behind you babbling things that make you wonder and you are trying to drive on.

A significant portion of your passengers can't drive for good reasons. Some of them will bombard you with personal stuff because you are captive and you can't give them the answer and then they don't tip.

This is not just driving people around. There's a reason most people can't do this for long and it's the same reason many of the veteran drivers are jerks.
posted by Mr. Yuck at 8:10 PM on November 1, 2016

You read all this crap about passengers not feeling safe and think "Who wouldn't feel safe with me?"

One of the most distressing experiences I ever had driving taxis was being asked to drop a passenger right now! at that! police station! right there! after a carelessly chosen phrase had frightened her witless.

I know I'm friendly, honest and trustworthy, but that night I was very firmly reminded that passengers have no way of knowing that upfront.
posted by flabdablet at 12:17 AM on November 2, 2016

That said, most of my rides were just fine and most of the people who rode in my cab ranged from pleasant company to great fun.
posted by flabdablet at 12:19 AM on November 2, 2016