I’ve posted before about what it’s like driving for Uber and Lyft but today I wanted to update you on the situation for drivers. I think there is still a ton of opportunity in the 1099/on-demand economy but it’s definitely getting tougher.
For all the same reasons (pay, flexibility, etc) that people like me started driving, a lot of other drivers are signing up too. And it doesn’t help when Uber is constantly lowering prices in what seems like a race to the bottom.
This article was originally published on Fusion and then Business Insider.
I like to refer to a new driver’s first month with Uber as the “honeymoon phase.” It’s exciting when you first get on the road, and it’s hard to believe that you’re actually getting paid to drive people around and chat them up. There’s always the chance of a puker, but that’s usually outweighed by flirtatious twenty-somethings and the entertaining and often ridiculous things you’ll witness if you drive long enough.
Trust me when I say, the weirdest and most outrageous rides always make for the best stories. I might have to write a book some day with all of the crazy stuff that’s happened in my back seat. But for now, the reality is that after a month or two, the fun starts to fade and it does become more like a real job.
It’s still a pretty fun job, though, and it seems to scratch that entrepreneurial itch that I’ve always had. It’s a challenge operating as a micro-entrepreneur in the sharing economy, but I enjoy being able to set my own hours and seeing a direct correlation between how hard I work and the money I bring in. Unfortunately for drivers, Uber is making things tougher and tougher for us business owners to thrive.
The biggest issue drivers face today is that there is really only one game in town. What Uber says goes, and there’s not much you as a driver can do about it. Uber has prioritized growth above all else and it’s definitely left drivers in a tough spot. Imagine going into work one day and your boss tells you that you’re going to have to do the exact same job you did last week but for 30% less money. After a recent round of fare cuts, that is the exact situation drivers faced, and for many, this isn’t the first time it’s happened either.
You can try to supplement your income with services like Lyft and Sidecar, but when Uber is raising billions of dollars, it’s tough to stay away. Since the beginning, I have made it abundantly clear that I prefer driving for Lyft. The community aspect and the friendly nature of the passengers is what enticed me to become a driver in the first place. The only problem though is that I just get way more requests with Uber. I guess I’d rather make a little money with Uber than no money at all with Lyft.
I don’t know any drivers who love driving for Uber, but I do know a growing few who are pretty vocal about how much they hate it. A lot of the most outspoken drivers though have been with the company for a while. (Anyone with more than a few months of experience is old in rideshare years.)
But based off numbers Uber released in December, driver growth is at an all time high. 40,000 of Uber’s 160,000 drivers have joined the company within the past month, and they are definitely still in the honeymoon phase.
A lot of these newbies have likely heard stories about easy money to be made and lucrative sign-up bonuses. And while that was true just a few months ago, things can change quickly in this industry, and it’s often to the detriment of drivers. Some drivers may quit, but a majority will likely Uber on, because they may not have a better option.
I’ve seen outsiders argue that being a driver is at-will employment. If you don’t like it, just quit, right? Unfortunately, it’s not that simple. Driving for Uber has been a huge boon for a lot of drivers who struggled for months to find work. Some drivers may not have an alternative that allows them the flexibility and earning potential that Uber still boasts. Others like me actually enjoy driving, but we just want to be paid a fair wage.
Uber is now more focused than ever on passenger and driver growth, and preys on those drivers who don’t have an alternative. Most drivers can’t afford to quit so they just roll with the punches and try to make the best of their situation. Others have made life-altering decisions to drive for Uber, including financing new cars and quitting jobs to become drivers, and now they’re stuck.
It’s probably true that, at one point, drivers were overpaid, and maybe it wasn’t the smartest idea to finance a car with Uber. But it seems like Uber’s valuation and driver pay are going in two different directions. The more money Uber makes, the worse things get for drivers.
Drivers aren’t dumb. They know what’s going on. But at this point, there’s just not a whole lot they can do about it.
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Harry Campbell is a blogger and freelance writer. He runs a blog and podcast for rideshare drivers at TheRideshareGuy.com and currently resides in Newport Beach, CA.
Aldo @ Million Dollar Ninja says
That’s tough. You would think that with Uber’s success they would treat it’s workforce better. If they keep going this way it might bite them in the rear bumper some day.
Thomas @ i need money ASAP! says
Might be tough for the Uber drivers but the cabbies in my town are really feeling it. My last cabbie said it’s caused a huge shift in the business model. Most people didn’t see it coming. Personally I think its a great model and I can’t wait for more services like Uber to come out. I love the idea of giving more people a chance to earn money outside of regular employment.
Jon @ Money Smart Guides says
I’ve also read that the rates drivers make isn’t like what Uber posts publicly. Most drivers who operate at non-peak hours make a lot less and really are losing money driving people around. To make money you have to be available at peak hours. Curious as to your input about this.
Harry @ PF Pro says
No not even close, there is definitely still a lot of opportunity but by no means is it easy money. You def make more driving during the peak hours and that’s what I recommend. I think there are better options for full time drivers in other lines of work.