Uber, the ride share app that has put 100s of thousands of drivers to work across the globe, has had it's share of black eyes recently. With over a million trips a week being taken in an industry that traditionally has been very difficult to control (think two people alone in a car and the potential for disputes/irritations/misunderstandings and conflict about any number of things), the actual number of incidents is quite likely the same or even less for a comparable number of taxi cab trips taken. Yet the media continues to shine a light on every misdeed done by a driver.
How about the positive side of things? Well, the media doesn't report the rosy stories too often, simply because when something positive happens,, it's usually not news, unless we look at this story about Uber's big hiring binge - there are now about 20,000 current drivers working for Uber in the Bay Area alone. This puts Uber on par with some of the biggest employers in the San Francisco Area. But don't call them employees - drivers are strictly 1099, according to Uber. More on that below.
How about those 20,000? What's their experience with the ride share company? Most of the fare cuts are now about a year old, many that had been working in 2013 did see lower fares per hour in 2014 and '15. On any given day on a myriad of driver Facebook groups, there will be a vocal group of drivers complaining about $4 fares, while other drivers post screen shots of $363 fares that took them half way to Kingdom Come. Granted, some of the screen shots are photo-shopped, but many are bona fide, and like the spin of the roulette wheel, each and every time the Uber driver app beeps, alerting the driver to a new customer, a shot of dopamine courses through the bloodstream as he or she thinks with excitement, " Hmm, maybe this one will be the big score of the day! "
Those perennieal Facebook posters will continue to make noise about the lower fares. But this as a major issue seems to be subsiding somewhat as newer drivers, who have only ever known the current pricing structure, begin to make up the bulk of the ranks. Many of the drivers that were full time in 2013 have cut back to part time in 2014 and 2015, working only the busiest hours when there's a price hike, (surge) or more clients, or both, in order to maximize their fares per hour and income. Many of these riders do gross $30 - $35 per hour, or about $24 - $28 after Uber's commission. Many have joined other platforms, such as food or grocery delivery, that pay hourly wages for committed shifts, (one can sign up weekly or daily for shifts) and can include tips. Instacart through SideCar pays between $22 and $30 per hour (no commissions). Some drivers are opting for the alcohol or medical cannabis delivery business (Saucy and Meadow are two such companies). Or laundry pickup and delivery (Rinse and Washio). The number of food delivery outfits is growing exponentially. There is now Eat 24, Munchery, Caviar, Spoon Rocket, Postmates, to name just a few, jostling for position in a market that has exploded with well paid, overworked techies too busy working to go out and eat in a sit-down establishment.
Because of the constantly shifting dynamics of the ride share and delivery industry, drivers have a multitude of options, and have become savvier about when, where and for whom to work for, and their Uber work has become more concentrated on morning and evening commutes, weekends and special events.
But because of the over saturation of drivers in ride sharing, even what was once an obviously good time to work now has to be approached with a well thought out strategy, so drivers don't become outmaneuvered by the competition. The ride share game, always a competitor to the legacy cab industry, now competes with itself even more fiercely - Uber against Lyft. Lyft against Sidecar, Sidecar against Caviar. Driver against driver. And the eco-system of tech startups in the ride share and delivery spaces that use drivers must compete fiercely to hire and retain them - using special promotions, guarantees, hiring bonuses, gas cards and other perks. Drivers are a hot commodity, but they are still not getting rich. (This is driving, after all) The best and the brightest ones make a decent living though, and part timers as well as full timers still name the ability to create their own schedule as one of the top draws to the app based ride share and delivery business as it now stands.
A smart driver is on multiple platforms, maxing out his earnings when and where he can, doing grocery delivery for Instacart when the offer goes up to $30/ hour, doing Uber on surge, or picking up Lyft bonuses by referring friends. It's the wild west out there, a V-C funded free-for-all where the stakes are high, the competition fierce, and the downsides can be ugly - witness an incident earlier this week where an Uber driver was charged with using his vehicle as a deadly weapon in a bout of road rage against a bicyclist that pounded on his car during his own burst of anger. Emerson Decarvalho, 38, was charged with felony assault with a deadly weapon in San Francisco. Decarvalho bailed out of jail and will face charges related to ramming the cyclist with his car, who is in stable condition after breaking ribs, his collar bone, and puncturing his lung. This driver, probably fairly untrained for the sometimes tense and grueling environment of high density, big city, urban ride share, spun the roulette wheel and came up a big time loser. Unfortunately, so did the cyclist.
A few months ago, Uber reported some interesting stats about it's work force. Seems close to 50% are college educated, a much higher chunk than the taxi driver population. A majority are men, which is no big surprise, but what is surprising is that only about 20% do it full time. That means that a full 80% of Uber drivers drive part time, customizing their own schedules as they go along. Many also do it simply to get out of the house or office and to meet new people.
Many drivers use their ride share gig to network, or hustle for existing businesses or services that they already provide. We've heard about massage therapists and task runners picking up new clients. About startup entrepreneurs pitching their ideas to tech industry execs. About stay at home moms whose primary duty is childcare going out in the evening for a few hours after their husbands get back from work, earning $20 to $30 an hour and enjoying the relative freedom of driving.
We've also heard recently about Uber Pool, the service in which multiple parties of riders share the same car going in the same direction, for a big markdown in price, in exchange for a bit longer overall trip time. Which is definitely an example of car pooling or ride sharing (think of the concept of sharing a taxi, with a tech twist.) Pool is a grand social expirement, in the words of an Uber exec, and has been rolled out in New York, Los Angeles, San Francisco and Paris so far. It's caught on with riders, they love the low promotional pricing, although drivers, as is often the case, can be slow to embrace the changes.
Theoretically, drivers can make more, since they are paid on time and distance, and taking two parties, typically will increase total trip length. Some have not enjoyed the added responsibility and headaches that can occur with two parties... but some have found that the added income makes the morning rush pay off even more handsomely.
All of these examples are of regular, every day drivers - and riders - using the platform to better their businesses, better their lives, earn money and save money on something they were already doing anyway. So Uber definitely has it's supporters - as well as detractors.
Does Uber have it's share of problems? Definitely. Inadequate training and background checks immediately come to mind. Uber has recently introduced a mentor program, that slightly resembles Lyft's, in an effort to pair new drivers with a more experienced veteran to learn from. Data privacy emerged as a concern late last year, after Ubergate hit the news stands. A senior Uber exec was quoted outlining a theoretical plan to gather unseemly data on a journalist that had been critical of the service, in what was widely seen as a major public relations disaster. And in some jurisdictions, Uber is being forced by local ordinance to provide more detailed background checks, so as not to hire potential trouble makers. There have been sexual assaults, and Uber has come to recognize that the livery and taxi space has it's share of unsavory characters who will take advantage of drunken women late at night. How to totally weed them out is still a work in progress - but Uber consistently states that rider safety is job one. Yet overall, Uber is a game changer and has made millions and millions of riders' lives easier and more predictable. And many drivers now have a source of income that can be had on their own schedule - which is a huge, huge plus.
Another looming problem is a class action lawsuit that is in process. Uber, ever the controversial company and Lyft, as well as Instacart, Postmates and others are now in the process of being sued by some of their drivers for misclassification. The drivers charge they should be counted as employees - not independent contractors, and should be compensated for fuel and other auto expenses and provided with workers comp, health and disability insurance benefits and other standard perks of employment.
Uber has unsuccessfully tried to get the case dismissed, but it appears that it will proceed to a jury trial this summer. A similar lawsuit brought against Fed Ex by the same lead attorney, Shannon Liss-Riordan in 2005 is still winding it's way through the appeals process 10 years later - so don't look for a quick resolution to this law suit. If this suit is eventually won by the plaintiffs, a big change in the overall business model will ensue. Uber's model has been to shift as many costs away from itself and to it's drivers as it can, and because of that, it has been quite profitable to date and has attracted the attention of billions in venture capital. If the suit is successful, Uber's profit margins will shrink and the nature of the service could eventually change, as well the price points.
But with the trend continuing on the upswing for on-demand everything, look for even more drivers, companies and consumers to jump on the people and food delivery bandwagons as the summer of 2015 approaches. And Uber drivers will keep on keeping on, chasing down the proverbial big score.
Written by Isaac Alfandary
This article first appeared in theblackcarguy.com
Of course, Uber drivers come from many walks of life. They are not simply downtrodden immigrants, as many taxicab drivers have traditionally been