Ubering is a Bad Idea

[Anti Federalist]

Ubering is a Bad Idea

https://www.ericpetersautos.com/2018...ring-bad-idea/

By eric - March 11, 2018

How does anyone make money using their car as a taxi?

Well, we’re not supposed to use that word, for openers. It’s ride-sharing. That’s just a dodge, of course. And there’s nothing wrong with dodging laws outlawing the free exchange of goods of services between consenting adults. If I have a car and am willing to use it to drive you where you want to go in return for a fee mutually agreeable to the both of us, where is the crime?

The taxi cartel objects to ride-sharing, of course – because they have legal monopoly on such services. They do not want you cutting in on their overpriced action. Which is why Uber and the others deny they are taxi services.

And in a way, it’s true. But this is precisely why being an Uber (or Lyft) ride-share driver is probably not good for you.

Here’s why – and it has nothing to do with the free exchange aspect. It has everything to do with the wear and tear aspect.

And the depreciation and insurance and warranty aspects.

When you drive for a taxi company, as a rule you use their car. This means that wear and tear – and depreciation – are not your problem.

The taxi company owns the car, so its reduced value over time – depreciation – isn’t money out of your pocket. If it’s you car, it is. And the bite is harder if you owe on the car because you could very easily end up owing on a car worth less than what you still owe – because depreciation is greatly affected by the miles you rack up. If you use your car as a taxi – er, ride share – you will rack up miles faster, sooner. And your car will be worth less and sooner, accordingly. To not factor this into your decision to Uber or not is like not considering the cost of interest on a loan. Money out of your pocket affects how much money you have left in your pocket.

Tires – and brakes and fluids and filters – cost money, too.

If it’s not your car, you won’t be paying for all that – the taxi company will. They usually have their own in-house maintenance facilities – in order to lower these costs. And if something big breaks – the transmission, for instance – they deal with it.

But if it’s your car, you’ll be footing the bill for all of these things – and not just in terms of the parts and labor at full mark-up but also the downtime. When the vehicle is in the garage – whether yours or someone else’s – you can’t use it to make money.

Which is costing you money.

Keep in mind as well that maintenance cost go up the more you drive. Instead of a $60 oil change once a year, you may be doing it three times a year – depending on the mileage you rack up. Same goes for brakes and tires – and belts and hoses and wiper blades all the rest of it.

And you must keep up with all this maintenance – and not just to be conscientious. Your warranty coverage depends on maintaining the car as specified. If you use it as a taxi – umm, ride share – it will almost certainly have to be maintained according to the “heavy duty” or “severe” service schedule for the coverage to remain in effect and even then, it may not. Read the terms and conditions. It may well be that warranty coverage is automatically void if the car is used for “commercial” purposes – no matter how conscientiously maintained.

This is not unreasonable.

Most cars – especially most modern cars – are not designed for taxi (whoops! ride-sharing) duty. The majority are front-wheel-drive, which is not as sturdy as rear-wheel-drive. Most don’t come with heavy-duty cooling/brake packages. Your typical Camry/Accord/Malibu are cars designed for ordinary passenger car duty, not the Clydesdale duty of being a taxi, idling for hours on end, enduring pothole strikes and curb scrubs and all the rest.

And if the car you’re using this way isn’t paid for – if it’s a loaner or a leaser – you might also be violating the terms and conditions of that contract, too.

Which brings up another contract – your insurance contract.

Most policies issued to private owners assume – specifically state – that the car must not be used for commercial purposes.

You therefore have two options. The first is to be straight with the insurance company and tell them what you’re doing with the car – and accept the rate hike that will almost certainly come next; this will eat into your profit margin – if there’s any left after you factor in depreciation, wear and tear and double/triple maintenance.

The second option is to not tell the insurance company – and “ride dirty.” This will avoid the premium hike, but if you ever have to file a claim – or have one filed against you – and the insurance company finds out you were ride-sharing, there is a good chance they won’t pay out.

Which means, you will.

Bottom line on this business: It’s not that people haven’t got every right to use their own car as a taxi – whether it’s called that or not. The question is whether it makes economic sense to do so.

For most people, the answer to that question is almost certainly . . . nope.

[timosman]

Uber and Lyft Drivers' Average Hourly Wage Is Just $3.37 http://www.ronpaulforums.com/showthr...e-Is-Just-3-37

[heavenlyboy34]

People who do ridesharing srsly nowadays tend to rent instead of wear out their own cars, as I'm told. https://www.usatoday.com/story/money...lyft/96214312/

[NorthCarolinaLiberty]

I'm guessing these taxi companies are crying a river. It's a tough business, but what business is easy?

I drove a taxi, but only went out 7 times in the several months I worked there. The dispatcher was a real prick, telling me "you should be able to clear enough to buy a sandwich." I'm not kidding. He said that.

I was new, so I always got the piece-of-$#@! cars. One time, I floored this car on the highway, and it would not go over 42 MPH. I'm not exaggerating.

You had to pay to rent the car. You had to pay for each mile you drove. Of course, you paid your own gas. I always cleared minimum wage or less. One night I actually broken even. Not even enough to buy that mother $#@!ing sandwich! It was a suck city to drive a taxi. Mostly picking up poor people who would not even tip. It was hardly like New York, where a compact geography and moneyed people can make it worth your while.

But yeah, obviously one should be able to do with their car as they see fit. It would be tough for an individual today. I remember when that $#@! Giuliani mandated what type of clothes the taxi drivers should wear. He was a real micromanaging prick. I also remember so many of the limo services in NJ-NY had Lincolns. They claimed lot of miles, but hard to tell how many repairs they did. I'm sure they exaggerated their durability.

The prick dispatcher where I worked once threatened to call johnny law on me just because we had a dispute about money. As if this was some type of criminal matter. Duh. The office was a real dump, so I knew they did not make much. I always wanted to get back at that guy by making a duplicate key, going back two years later after I quit, and run his car off a cliff where I fished. Well, I never got do that, but it was a funny thought.

[dannno]

Ya the article is mostly bull$#@!.

I know people who have made bank driving for Uber.. we are talking $20-$40/hour on the weekends, netting them $300-$600 each weekend, or an additional $1200-$1600/mo, that's about $14,0000-$20,000/year on top of their regular salary in their full time job, for driving an extra 10-15 hours a week. That means on some nights they would have a higher hourly wage driving for Uber than their regular full time salary job.

That is all after expenses...

It's actually a pretty fun job if you like driving, too. Especially if you are working in an area that has a lot of entertainment and you like being around people who are having a good time. If watching other people have a good time bums you out, it might not be for you.

Insurance costs are virtually zero because the ride sharing company covers you during your trips. You need to get rideshare insurance, but typically it costs about the same. In fact, you can get metromile insurance pay by the mile, and they will subtract your Uber miles so you don't have to pay anything.

Fuel costs are a small percentage of what you will make in fares. If you are getting a lot of rides then fuel costs won't be an issue. The issue is if you are sitting in your car, not getting rides.. that is what drives down hourly wages.. But then you shouldn't be burning through fuel unless you are on your way to a busier area.

I'm not saying going to work full time for Uber is a good idea. It depends on where you live. In some places it is not a bad option.

It is an EXCELLENT side gig to make extra money in many areas because the weekends are usually the busiest so if you have a normal job you can just go out whenever it gets busy and there is money to be made.

[dannno]

People who do ridesharing srsly nowadays tend to rent instead of wear out their own cars, as I'm told. https://www.usatoday.com/story/money...lyft/96214312/

Leasing has always been something that rideshare drivers do, and it's not a bad option - but leases tend to limit the number of miles you drive. If you use your car to go to work every day, then uber on the weekends, and take some long road trips during the year you can go over your allotted miles. That can cost a lot. Even ridesharing full time could put you in that category, and I don't know if that is the best option or not, I think it's really expensive to get into the next mileage bracket on leases.

IMO a good option is to buy a fairly nice reliable used car, 1-4 years old and low miles. Use the mileage you drive for Uber as your tax deduction at the standard $.56 a mile. The $.56 works out quite nicely on a used car in the $10-$12 range, not so great on a new $30k car.. Driving Uber with a brand new car, especially one that you bought and will want to sell later, that can rack up some serious depreciation.

[dannno]

Uber and Lyft Drivers' Average Hourly Wage Is Just $3.37 http://www.ronpaulforums.com/showthr...e-Is-Just-3-37

Ya that really is bull$#@! taxi cab owner propaganda.. it's been out since the beginning of rideshare.

Rideshare drivers used to make $50-$60k/year driving full time in many areas. Part time drivers on the weekend made even higher hourly wages than their full time counterparts because they were able to go out only during peak hours.

Wages have dropped, but not to $4/hour (average). Sorry. Any drivers who make that little an hour need to find an area with higher demand if they want to drive, or pick another gig.

[heavenlyboy34]

Ya that really is bull$#@! taxi cab owner propaganda.. it's been out since the beginning of rideshare.

Rideshare drivers used to make $50-$60k/year driving full time in many areas. Part time drivers on the weekend made even higher hourly wages than their full time counterparts because they were able to go out only during peak hours.

Wages have dropped, but not to $4/hour. Sorry.

This^^ a deacon at my church is an uber driver during the week. He makes a full time living doing it.

[Matt Collins]

Danno is making sense again...

Yes, these articles are anti-capitalism and pro-socialism. They are also false.

[Anti Federalist]

Danno is making sense again...

Yes, these articles are anti-capitalism and pro-socialism. They are also false.

Yeah, right Eric Peters is a socialist.

Do you guys even read? Or just take a contrarian view, simply because you're involved.

He's talking about it from a maintenance/upkeep/cost per mile analysis.

I have no doubt, that rural/suburban environments are a losing proposition for "Uber-ing" and "Lyft-ing"

[Matt Collins]

He's talking about it from a maintenance/upkeep/cost per mile analysis.

I have no doubt, that rural/suburban environments are a losing proposition for "Uber-ing" and "Lyft-ing"

Neither of which are true. Yes if you depreciate your vehicle and expect to sell it to someone for a return, then yes Uber doesn't make sense. But if you have a super inexpensive car to operate and plan to run it in to the ground and never sell it, then depreciation doesn't matter.

[acptulsa]

Neither of which are true. Yes if you depreciate your vehicle and expect to sell it to someone for a return, then yes Uber doesn't make sense. But if you have a super inexpensive car to operate and plan to run it in to the ground and never sell it, then depreciation doesn't matter.

You say it isn't true, then say it is true. Well, half of it. You call the other half untrue, but you've never tried to operate in, say, Weewoka, Oklahoma. Do you genuinely think you can make a living running Uber in Weewoka, Oklahoma? Really?

In fact, everything Peters said is true, and if you had ever read his other writing, you'd realize he's the farthest thing from a socialist you can find on this earth this side of Calvin Coolidge's Sainted Grave.

He is saying things that people need to know before they jump into this thing. Lyft and Uber make it all sound so simple. You knew before you jumped in it wasn't quite that easy. Some people don't stop to consider such things first, and get themselves bit. Maybe he's overstating his case, and maybe he's just writing from the point of view of a spread out, not overly populated city in flyover country and he is overstating nothing. In any case, there may be a spin involved, but you can't put your stubby finger on one single little piece of genuine misinformation in the whole essay.

Unless you're going to get one of their bonuses for everyone reading this forum who isn't discouraged and signs up anyway, you have no reason to make yourself sound like a commercial. The man has a point, and someone who hasn't thought the thing through needs to hear that point. Indeed, anyone who can't think of those facts on their own, and has to be told, would almost certainly be making a mistake driving for Uber and/or Lyft (just as he says) because they obviously have no head for mechanicals or business. So do your credibility a service and lay off the baseless, knee-jerk socialist accusations for once. The man is pointing out some facts some people need to hear. And he's clearly telling no lies--while you, in calling the man anti-capitalist, clearly are telling lies.

Matt, dannno, I know you both think the world revolves around you. But in this case, whether you believe it or not, the man isn't talking to you.

Or better still, maybe you should take a deep breath, step back, and read it again. If you aren't making extra payments to the finance company with an eye toward paying the vehicle off early, you might just wake up one day to find it has 400,000 miles on it and you still have a years' worth of payments to make on it. Then you'll find out the hard way what the phrase 'painting yourself into a corner' means. I can personally guarantee you wouldn't be the first; I can introduce you to people who painted themselves into that same corner. He could actually be talking to you, and you just refuse to believe it.

[Anti Federalist]

Neither of which are true. Yes if you depreciate your vehicle and expect to sell it to someone for a return, then yes Uber doesn't make sense. But if you have a super inexpensive car to operate and plan to run it in to the ground and never sell it, then depreciation doesn't matter.

This is more about maintenance, upkeep, replacement parts, and what kind of vehicle you can drive in heavy duty cycles, like taxi driving.

A Kia Rio or Nissan Versa isn't going to last long in a taxi environment.

And insurance...which is substantial if you are going to be honest and report what you are doing to your insurance company.

[Raginfridus]

I'm not sure this is the town to try, at least not during summer, when Purdue dries up, but it does seem like a fun way to make extra money. Maybe if I had stayed in Indy.

[dannno]

This is more about maintenance, upkeep, replacement parts, and what kind of vehicle you can drive in heavy duty cycles, like taxi driving.

The article is wrong - if you are driving your vehicle enough to need upkeep due to driving for uber, you are making way more than enough money to pay or all of that. The only way you can make $4/hour is if you aren't getting ride requests, then you don't need the upkeep because you aren't driving the miles. That is why the article makes zero sense unless you are doing something really wrong... i.e. buy a new $30k car and work low amount of hours and get very little business.

Taxis, on the other hand, taxi drivers pay to lease, and in some cases pay per mile, to the taxi company.. See northcarolina's post above. That is far more costly.

I have talked to taxi drivers that moved to Uber and were much more happy and making more money.

A Kia Rio or Nissan Versa isn't going to last long in a taxi environment.

They work fine for uber drivers, but why buy new? You can get one cheap used with low miles and drive it into the ground. Or lease, that seems to work for many.

And insurance...which is substantial if you are going to be honest and report what you are doing to your insurance company.

Again, the cost for insurance is virtually ZERO if you have a personal vehicle that you need insurance for anyway.

Uber covers your rides, thus insurance for ridesharing costs virtually the same as personal insurance..

And like I said before, if you get metro mile rideshare insurance, you pay per mile and they subtract your uber miles out so it is ZERO for insurance in that case.

[dannno]

What ridesharing taught us is that most places don't need a lot of full time taxi drivers. What the market demands is a few full time taxi drivers, and many part time taxi drivers during peak hours, on the weekends at night when people are drunk. During the day people are sober and they can drive themselves.

Driving for Uber full time as your sole source of income is not the greatest job, but you can do pretty well in many areas. Some areas where there are too many drivers compared to the amount of riders, you may not get enough demand - but costs aren't the issue here because lack of demand means using your car less. The issue here is sitting around doing nothing. A signal you need to change locations or do something else.

Driving for Uber on the side, if you can drive peak hours, is a fantastic side gig. Probably the best. That is what the market really needs anyway, is people driving during peak hours.

Using costs to say that it isn't good to drive for uber is not a valid argument, unless the person does it wrong by buying an expensive vehicle that they don't need for personal use in an area that has low demand.

[Matt Collins]

You say it isn't true, then say it is true. Well, half of it. You call the other half untrue, but you've never tried to operate in, say, Weewoka, Oklahoma. Do you genuinely think you can make a living running Uber in Weewoka, Oklahoma? Really?

Anyone who drives for uber that is planning to depreciate the miles on their car is an idiot. I'm not talking about taking a tax deduction, I'm talking about anyone who expects to make money back when they sell their car.

He is saying things that people need to know before they jump into this thing. Lyft and Uber make it all sound so simple. You knew before you jumped in it wasn't quite that easy. Some people don't stop to consider such things first, and get themselves bit.

How would someone get bit? It doesn't cost any money to get started if you own a car.

And there are plenty of Facebook groups and blog posts out there of Uber drivers telling it like it is. Anyone who gets in to it and doesn't know what to expect is an idiot. Not to mention that one can take a 10 minute uber ride for less than $20 in most places and simply ask the driver what it's like.

If you aren't making extra payments to the finance company with an eye toward paying the vehicle off early, you might just wake up one day to find it has 400,000 miles on it and you still have a years' worth of payments to make on it. Then you'll find out the hard way what the phrase 'painting yourself into a corner' means. I can personally guarantee you wouldn't be the first; I can introduce you to people who painted themselves into that same corner. He could actually be talking to you, and you just refuse to believe it.

Again, these people are idiots.

When I quit politics to figure out what I wanted to do next in life I drove for Uber. I bought a 2 year old Prius, paid for it mostly in cash, and I more than earned back the value of the car in less than 6 months. I was doing it full time but I was also living on the cheap. When I was in flight school in 2016 I drove for Uber in my free time. I still do when I am not flying because as I am transitioning my career I still need side income.

Anyone who loses money driving for Uber is an idiot. Anyone who hardly breaks even driving for Uber is an idiot.

[Matt Collins]

This is more about maintenance, upkeep, replacement parts, and what kind of vehicle you can drive in heavy duty cycles, like taxi driving.

A Kia Rio or Nissan Versa isn't going to last long in a taxi environment.

And insurance...which is substantial if you are going to be honest and report what you are doing to your insurance company.

Uber covers insurance, it's a non-factor.

I have put almost 150k miles on my Prius and have had no major maintenance done because it isn't needed. Yes I needed a tune up, new tires, new wiper blades, new batter, but that's it. No major maintenance and I get 45mpg.

[acptulsa]

Anyone who drives for uber that is planning to depreciate the miles on their car is an idiot.

Anyone who gets in to it and doesn't know what to expect is an idiot.

Again, these people are idiots.


Anyone who loses money driving for Uber is an idiot.

Anyone who hardly breaks even driving for Uber is an idiot.

And anyone who gets his panties in a knot because Eric Peters decides to declare his own Be Kind to Idiots Week is an idiot.

Grumble grumble idiot idiot idiot idiot idiot bah humbug. You act like you want a million more drivers to sign up and take all your calls. Dismount your high horse--if you can, without breaking one of your little legs--and chill.

At the risk of sounding like a Trumpster writing fan fiction, did it occur to you that Peters is just trying to convince riders to give drivers better tips...?

5D chess, baby! MUGA!