Gridwise recently published the numbers for the top US cities for rideshare and delivery for the quarter ending in September (Q3). It’s interesting to look at the cities on the list or those that moved up and down and speculate about the reasons.
For instance, San Francisco was fifth on the previous list, published in July (covering Q2 2022). Four months later, San Francisco achieves top spot on the list. Why? That’s hard to say without in-depth information, but the latest numbers entail most of the summer, and the City by the Bay is a major vacation spot. It is also a crazy place to drive if you don’t know the area, and finding a parking spot is challenging, too. It is much easier to navigate the city with rideshare.
What about St. Louis? This midwestern city didn’t even make the top five in Q2, but it slid into the number two spot on the most recent list. Where did that come from? Here’s a guess. The St. Louis Cardinals baseball team finished 93 and 69 this last season, good enough to take the National League Central division. Added to that, Lyft is the official rideshare of the Cardinals. Lots of baseball fans flocked to Busch Stadium, and with parking ranging from $10 to $40 a spot, rideshare looked like a good alternative.
This is all speculation, but it is interesting to muse about the reasons. Take a few minutes as Gridwise analyzes the latest information on how much rideshare drivers make in the top cities. Topics include
- Rideshare earnings in the top cities are generally down.
- Who uses rideshare services?
- The role of special events.
- Comparisons in the food delivery market.
- What’s driving the increase in food delivery earnings?
- The continued growth of food delivery and ghost kitchens.
- What do gig drivers do if they don’t live in one of these top cities?
- Make the Gridwise app part of your strategy.
Rideshare earnings in the top cities are generally down
Let’s compare the figures. These were the numbers in Q2:
Now let’s look at the Q3 numbers:
Drivers in Boston plummeted from first place in Q2 at $32.54 per hour gross to $26.50 per hour gross in Q3, taking the city from first on the July list to fifth on the most recent list. That’s more than six bucks an hour. Why the downturn?
Famous as a college town, Boston has more than 60 colleges in and around its metro area. College graduates are a top demographic for rideshare, according to Zippia. Most students travel home for the summer months, which makes a difference in rideshare earnings.
Then there is the conundrum of Denver. Drivers in the Mile High City dropped from $29.28 per hour gross to $27.71. Denver is not known as a college town, and if we look at the baseball explanation, we see that the Denver Rockies finished in the basement of the National League West.
What caused the downturn? An educated guess would be that Denver, and most of Colorado, attracts visitors in the winter for ski season.
By the way, here’s a thought: Do rideshare drivers in Colorado have ski racks mounted on their cars?
Who uses rideshare services?
According to the same Zippia report, the demographics for rideshare favor urban over rural areas and younger, college-aged people, or those with college degrees.
|Demographic||Urban percentage||Rural percentage|
|$75k annual income||71%||32%|
Zippia offers additional proof that the use of rideshare is directly correlated to age. In the 30–49 age bracket, rideshare drops to 43%. At 50-plus, it drops to 24%.
As Gridwise concluded in its last top cities article, rideshare is popular in college-educated, younger populations with higher incomes. But as you can see from the way cities go up and down on this list, usage is also dictated by local tourism and whether colleges and universities are in session. Drivers need to consider these factors when developing their driving strategy.
The role of special events
Cities that routinely have special events are also ripe for rideshare hotspots. Rideshare drivers in Southern California, for instance, know that Palm Springs (100 miles east of Los Angeles) hosts sporting events, concerts, and other gatherings throughout the non-summer months.
“Aside from New Year’s Eve, some of my best nights have been in Palm Springs and the wider Coachella Valley,” said one driver who typically drives in LA. “Particularly when they have special events, which is frequent, Palm Springs is a great place for rideshare drivers.” Conversely, Palm Springs does not have an especially active market during the hottest summer months, when it is routinely over 100 degrees and often closer to 110.
Comparisons in the food delivery market
Unlike rideshare, food delivery numbers are up and encouraging for those gig drivers who do food delivery.
Here is how the numbers in Q2 looked:
Although there has been some shuffling around in the most recently reported numbers, the Q3 numbers all point upward:
Except for Denver, and that only slightly, food delivery drivers are earning more. Some of the increases are substantial. Food delivery drivers in Boston are averaging almost $2.00 per hour more in Q3.
What’s driving the increase in food delivery earnings?
Again, there are no supporting numbers, but inflation is one of the likely factors. Higher ticket prices mean more money trickles down to the delivery drivers.
Inflation doesn’t seem to prevent individuals who use food delivery from continuing their purchasing habits, though, and that’s a good thing for food delivery drivers.
The continued growth of food delivery and ghost kitchens
Another encouraging aspect of food delivery is the continued growth of this market. Toast, a supplier of point-of-sale and hand-held hardware and technology for restaurants, anticipates revenue for food delivery services to grow by 9.18% annually. Toast expects delivery services to reach over 45 billion dollars by 2025. Driving this expansion is a maturing population of millennials and Gen Zers (63% of food delivery users fall into the 18–29 age bracket). This group will likely bring these purchasing habits with them as they age.
The consulting firm McKinsey & Company reports that another significant factor in the growth of food delivery is “the advent of appealing, user-friendly apps and tech-enabled driver networks, coupled with changing consumer expectations.”
Those changing expectations that McKinsey mentions include “ghost kitchens.” Ghost kitchens operate out of warehouse facilities (with cheaper rent than a high-profile restaurant location) and cater to the delivery-only market. These operations have no signage or bricks-and-mortar location, just a kitchen, and an aggressive online presence. They are driving incredible growth in the food market and gig-delivery services.
The California Homemade Food Act, passed in 2018, established controls on the market. Twenty-nine states have since passed similar regulations. Many metropolitan areas have large warehouses containing as many as 25 or 30 of these individual ghost kitchens in a mini-mall-type arrangement. A Los Angeles Times article reveals that the former Cordon Bleu cooking school in Pasadena, California, now hosts 20 spaces for ghost kitchens. Another warehouse on LA’s westside houses 37 brands, most of which gig drivers deliver.
In a twist on ghost kitchens, many restaurants operate delivery-only brands out of their retail kitchens. According to an article on the Modern Shipper website, Cosmic Wings is a delivery-only concept available via Uber Eats and operates in approximately 1,250 Applebee’s kitchens. The US Chamber of Commerce recently reported on It’s Just Wings, a similar brand concept, housed in the kitchens of Chili’s Grill & Bar restaurants.
What do gig drivers do if they don’t live in one of these top cities?
Many drivers across the US earn good incomes from their gig-driving activities. Rideshare drivers do it with a strategy and a keen understanding of the area where they drive. They know the professional sports venues, concerts, and other special events. They also rely on the Gridwise blog for the latest tips on how to boost rideshare earnings.
Food delivery drivers achieve the same by knowing the best food delivery restaurants and keying into the growing ghost kitchen market.
If it makes sense, rideshare drivers travel to nearby larger cities, taking advantage of the extra business. Others choose to multi-app, switching between rideshare and food delivery, depending on which is busier.
Other drivers earn good money delivering groceries. Business Insider recently woman in Las Cruces, NM (pop. 112,000), who made more than $100,000 in a year as a driver for Walmart Spark (Walmart’s in-house delivery service).
Make the Gridwise app part of your strategy
Whether you live in the city or in a small town, you can use Gridwise’s free mileage and earnings tracker to manage your records and boost your income.
Rideshare and food delivery drivers use Where to Drive and When to Drive to figure out the best times and places to drive in their areas. And for rideshare drivers, the Airports and Events features will tell you exactly when you need to arrive at destinations to pick up passengers – no more time wasted waiting around!
And have fun out there.