Remember the good ole days of taxis?
If you were a driver during those days you didn’t have to worry about apps, auxiliary cords, or multibillion dollar companies decreasing your pay. You just kept your eyes peeled for patrons with their hands extended, and raked in the cash.
But those days are gone.
Now, we have the newly public Uber and Lyft to deal with.
And while investors are more than a little bit concerned with the disappointing results of these companies recent IPOs, we’re more focused on drivers and the one question that every driver wants answered:
What does this mean for rideshare drivers?
While it comes as no surprise that driver well-being didn’t make it to the top of the priority list for Uber or Lyft, the two companies have released ‘appreciation reward’ compensation plans for their drivers which they believe will appease drivers.
Both companies present this with ‘you’re welcome’ already on their lips, however qualifying for one of these bonuses would mean putting in A LOT of work for these rideshare companies through the years.
Uber Driver Compensation Plan
After ten years in business and over 10 billion trips, Uber claims that going public is just the beginning as they further explore rideshare innovation with food and service delivery options. Investors may be excited, but what about the drivers who completed those 10 billion trips?
As of late April, 1.1 million drivers were given a bonus based on the number of rides they’d completed. These appreciation rewards were paid out to individuals who fell into one of 6 tiers:
- Drivers who completed over 2,500 rides received $100
- Drivers who completed over 5,000 rides received $500
- Drivers who completed over 10,000 rides received $1000
- Drivers who completed over 20,000 rides received $10,000
- Drivers who completed over 30,000 rides received $20,000
- Drivers who completed over 40,000 rides received $40,000
Recipients were then given the option to take the cash and walk away or invest it back into Uber with stocks available at initial purchase offering price.
Lyft Driver Compensation Plan
While Lyft drivers have historically made slightly more than Uber drivers, their appreciation reward offerings could not compete. Lyft offered a much smaller driver appreciation pool (roughly 100 million) to it’s drivers when they went public and only two tiers for drivers to fall into:
- Drivers who completed 10,000 – 20,000 rides received $1,000
- Drivers who completed 20,000+ rides received $10,000
Recipients are then given the option to take the cash money or put this bonus towards purchasing stock in Lyft at IPO price.
Sounds nice.. But how much is that really?
While receiving a check for $10,000 would make anyone’s day, it raises a lot of skepticism around what this means for future driver compensation.
If we do the math, the bonuses offered from both companies range from an additional $0.04 – $1 per RIDE depending on the tier the driver falls into… That’s not much folks.
So while receiving this as one lump sum is nice, is this actually fair compensation for the years of hard work that drivers have put in?
Here’s what drivers are still lacking
Drivers lack employee status.
Uber and Lyft have fought tooth and nail over the past few years to ensure that rideshare drivers are never considered employees to avoid giving drivers certain benefits and rights.
Companies are not obligated to offer contractors simple rights like minimum wage, overtime, workers’ compensation, unemployment insurance, paid sick-leave or on the job expense coverage. Beyond these basic rights, you won’t be surprised to hear that neither company offers health insurance or other benefits.
Drops in company profit….
Both Uber and Lyft stocks have dropped in value since they became publicly traded, and both companies went public to make up for a growing deficit in their profits. The two companies are continuously dropping their prices to compete with one another, ultimately bleeding funds as they do so and working to fix the business model.
…Means you can forget raises.
This fix comes at a cost to their drivers. While drivers have always been paid per mile and minute, the algorithms Uber and Lyft use to calculate pay are becoming increasingly difficult to understand. Combine this lack of transparency with both companies scrambling for change and looking to cut costs, and you won’t be surprised to find out that driver compensation has decreased.
Are robots the future?
Despite the fact that both of these rideshare companies were built on the backs of their drivers, both Lyft and Uber claim that changing their business model would result in devastation for the company profits. How can a company expect to retain their drivers while not making them a priority?
This unanswered question raises a lot of eyebrows as the two companies continue to explore automation and self-driving cars. In fact, Wall Street is banking on autonomous vehicles turning the companies profitable, however experts say we’re still at least a decade away from this.
No wonder we’re on strike!
In recent months, drivers all around the world have organized strikes in hopes of having their demands heard. I recently attended one of the driver strikes in LA and had a chance to talk with drivers about their demands.
While every driver had different opinions and demands, every driver wanted a livable income that wasn’t constantly getting slashed, job security, and regulated fares.
These drivers hope that by powering down their apps during rush hour and rallying in front of local offices, they will send a message to both Uber and Lyft that needs to be heard: the drivers are your bread and butter and their needs should be important to you.
So how can I take back control of my earning potential WITHOUT help from the rideshare companies?
As a driver, I’m grateful that rideshare companies like Uber and Lyft are around to give me the earnings opportunity. But the fact of the matter is that these companies are not going to do much to help ensure that I, or any other driver, is making a living wage.
But there are a few ways that I can take the control of my earnings.
Be strategic with your route
First comes first, always be strategic about your driving.
By understanding where passenger supply is and planning your day around that, you’re going to stay busy, avoid downtime, and maximize your opportunities to earn a bit extra from “surges”.
Use Gridwise. A tool like Gridwise to understand the events that are going on in your city and the passenger demand from the airport so you can plan your entire day.
One of my favorite tricks is to plan around large events in my city such as festivals, conventions, and concerts. I know that visitors from out of town will be flying into the city one day before their scheduled event, staying at local hotsls, and flying out the day the event ends.
I use Gridwise events list to figure out when these events are happening, and then check the Gridwise airport passengers graph to know every arrival and departure peak for the days visitors are flying.
I’ll then be sure to hang around next to hotels with my destination filter set for the airport 1 hour before a huge arrivals peak – this way I hope to get a return trip from the airport back to the city with little to no downtime.
Add some easy money makers to your ride
As the rideshare industry grows, brands are starting to want to advertise to passengers via drivers is drivers, which means which means cash money for drivers because
Check out a few of the companies that are paying drivers to advertise to passengers.
Cargo is essentially a mini-vending machine for your car that allows passengers to purchase candy, snacks, protein bars, and more right from your center console. Boasting increased ratings, tips, and earnings for drivers, Cargo handles everything from refills to payment at no cost to the driver.
Surf offers an in-car tablet that allows passengers to stream premium entertainment and engaging content during the ride. Drivers who complete at least 150 trips per month will receive the tablet at no cost and will make money every time a passenger uses Surf.
PlayOctopus provides a similar tablet experience to Surf, but instead offers passengers the opportunity to play games and win cash prizes while running short ads. Octopus boasts extra earnings of $100 per month by simply having the device in the vehicle.
As Uber and Lyft struggle to turn a profit at the expense of their drivers, rideshare drivers do have options to increase their monthly earnings with Gridwise and other vendors to make up for the deficit.
Do you have other tips and tricks for earning extra money while driving? Share with us in the comments below! Oh, and we recorded a video where we talk about this topic! Check it out!