Make your Uber driver feel good. He may not be making much money. And you’re really not “sharing” anything with him.
The ALS 5-Star Uber Service
Recently, I decided to do a little experiment.
Several people in my circles talk regularly about the sharing economy. I have read dozens and dozens of blogs on the model — and actually work with accelerators and incubators that are also very much focused on the topic.
Here’s the issue I’ve always seen, though: many of us experience the sharing economy as users, not as providers. If we’re not exposed to both sides of it, it’s hard to really understand what’s going on and how it’s going to impact business and growth (and yes, politics and society too) in the next decade and beyond. Most of my friends have stayed in an AirBNB, for example — but only 1 or 2 have rented their place out. Almost all my friends and colleagues have used an Uber, but none have driven one.
So, I decided to sign up. I wanted to see what it was like to be an Uber driver.
The first step — signing up — is surprisingly easy. The process involves a background check which is done by a third party and the collection of several documents that verify that you are legally licensed to drive that vehicle. The process for me took approximately one week including the time to go to a local Jiffy Lube for relatively simple car inspection. Because of the vehicle I drive, I was also able to request the ability to drive as an Uber Select driver, which merits higher rates per mile and a different clientele. (You’ve probably ordered a Select once or twice.)
This was getting real now — I was signed up — and once stuff gets real for me project-wise, I go whole hog. The next step was preparing the car. I bought some mints and candies for the armrest, and I put magazines in the back that passengers could read. I set up in-vehicle Wi-Fi and provided chargers for Android and iPhone devices. I made a brochure about everything I was doing and stuck it in the back. I was aiming for five-star service every time out.
I got my mounting device for the dashboard, installed Waze, and started taking rides. I was now on the other side of the sharing economy. I had crossed the chasm.
So, what did I learn?
About half my rides were Uber Select; the other half were UberX (the most common). A large percentage of my UberX fares were surge, i.e. 1.1-2x the traditional fare via demand, but most Select were base fares.
It’s hard to make money. In one trip, I drove a passenger through traffic for 21 minutes and my take home was about $4 adjusted for income taxes. I cannot for the life of me figure out why someone would be a part-time UberX driver. I get the flexibility element — also heard of an Uber driver who has six kids once, and I get maybe using Uber as peace and quiet — but it’s not a true revenue generator in any real sense. My question is whether or not the average driver tracks mileage to and from pickups, uses the tax code to his full advantage to deduct expenses, and has a car where the cost of depreciation is lower than the benefits of Uber fares.
Uber has recently decided to allow drivers to accept tips in certain markets. As a reaction to lawsuits, the stipulation allows tips as long as they use as a separate transaction or via cash.
People are condescending
A lot of times, they don’t even realize it. You might be in this boat without realizing it. I constantly got questions about why I do Uber and/or how else I really make money. There were also dozens of comments implying “Oh, you’re smarter or better at conversation than I would have assumed.” It was really amazing to see this in real-time, ride after ride.
Drunk people are awful
Some people really never do grow up after high school or college. When drunk people spilled into my car, it’s all crass and racism and ridiculous, no-context comments. No one puked in my car (I’ve seen stories about that from Uber drivers), but verbally, almost all the drunk people puked everywhere. Obnoxious at 20. Ridiculous at 40.
Uber has begun piloting means of protecting drivers from drunk passengers, or at least minimizing impact of the distraction. Drivers get a $200 cleaning fee when someone throws up in your car and several expert drivers have posted blogs with tips on avoiding the worst offenders and managing the other drunk passengers. The dilemma for Uber is that it touts its services as a drunk-driving solution to generate political juice. This is Uber’s pitch to Upstate New York. If too many of Uber’s part-time drivers begin refusing to service drunken passengers, this claim will lose effectiveness.(see article)
Spilling the Beans
Absolutely shocking how many secrets were revealed in conversations between passengers, including — not even kidding here — people working as consultants or investment bankers on confidential matters. I started thinking: if someone drives an Uber at a major U.S. airport and it takes about 30 minutes to get downtown in whatever city, how easy would it be for Uber drivers to basically do real insider trading off what they hear? Or simply to ruin a deal by tweeting or posting it on Facebook.
The ratings game
I nailed my five-star rating. During my 19 trips, 15 passengers gave me ratings and all of them scored me a 5. I believe Uber now requires ratings on every fare. When I did my experiment, this was not the case. After every fare, I would find myself anxiously awaiting my rating. I wonder whether my perfect score would be different had Uber required ratings when I drove. Perhaps the people who did not rate me were not as impressed with the quality of my service and would have rated me lower.
After about 20 fares, it does become increasingly easier to maintain that high rating. In the first 20 fares, it’s a little bit more a situation where every fare (and subsequent rating) makes a huge difference. As a passenger, I had just ok rides with 4.9 rated drivers that had taken hundreds of fares. But I also had amazing rides with newer drivers with 4.5 that had only 10-20 fares. One or two passengers in a bad mood can ruin a starting driver. New drivers are given some slack on their rating, but a rating below 4.6 puts you at risk of being deactivated.
I don’t know Chicago as well as I thought. Certain neighborhoods were a total mystery to me — even sometimes 6-7 minutes from places I do business all the time. If I had turned off Waze, I’d be totally lost. That was surprising to me. This is a major differentiator for taxis. If you want to get good ratings, you need to really get to learn the streets of the city in which you live.
No Dates or Mates
It’s not really a networking tool. I heard people classify Uber as a networking tool often, but that’s not really true. I ultimately did 19 rides. No one hit on me — although maybe that’s my issue. No one encouraged me to hit on them. And I didn’t start any business partnerships or friendships, no. I thought about the term “sharing” within sharing economy a lot when I was doing this. Most of the passengers are basically paying less — and getting it faster — than they would with a traditional taxi. They’re not sharing anything. It’s an economic exchange at the micro level. (more on that here)
To Uber or not to Uber
I wouldn’t recommend Uber to people looking to make extra cash. I don’t actually feel the economics are there. There are a couple of situations where it could be advantageous, though. For example:
● If you have a nice leased car and you don’t drive more than the allowable mileage on a regular basis, it makes some sense.
● If you’re interested in human psychology or think it could benefit you professionally to understand people a little bit better — and you have the time — then it’s valuable.
● If you’re a person who would otherwise be sitting home downing Doritos and not interacting with other human beings, do it.
● Short-term need for cash for a trip? Definitely consider it.
● You’re just a curious person.
If you are going to drive, here are a few blogs with independant tips on optimizing your experience:
- Uber Driver Tips (Philly based)
- 10 Things that might get you deactivated
- Handling Angry Passengers
- Make more money driving for Uber
Now look: I did 19 rides. It’s not a huge sample size and I don’t portend to be any expert on being an Uber driver as a result. One Uber driver claims he is raking in $252,000 a year, largely by selling jewelry to his passengers as he drives. But to understand the sharing economy, you need to check out both sides of it. There are people legitimately making money and connections from being a driver, but there are pros and cons like ANY means of generating income. Also, it seems Uber’s long-term plan could be to phase out drivers — you’ve got their purchase of self-driving Otto trucks, and you’ve got their billionaire CEO alluding to it left and right. It’ll be interesting to see what happens when the sharing economy starts to get automated out as well.
For now, though, I would love to hear your perspective on the sharing economy. And if you get a chance, hit on your next Uber or Lyft driver. Might make ‘em feel better… Just saying.
Be well. Lead On.
Here is the full log of trips:
Adam L. Stanley Connections Blog