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Why Uber Is A Scam – Math Explains



Ok so I was looking at this graph put on Uber’s website today and thought it looked too good to be true. How amazing that Uber drivers make more than any other type of driver.
But I knew from my own experience as a rider that Uber didn’t cost that much. In fact, Uber is pretty cheap if you’re a passenger.
Sooooo…. how can uber be so cheap, and yet the drivers make so much money???

Now Uber has cut pay to drivers in Detroit to 24cents a mile , but we’re going to stick to the 90c for now.

Uber takes 20% of the total fare from the driver for older drivers. Newer drivers get 25% taken.

So we’re down to 67.5c per mile.

Then you have to deduct tax:
In some LA County’s, sales tax is as high as 10%, and Uber doesn’t withold taxes for you. The drives are responsible for keeping this money aside to pay the tax department in April.

So with the 10% deducted, we’re down to (just over 60 cents) 60.75c

Now we need to factor in depreciation of the car. A car is an asset like anything else, and will eventually wear out and you’ll have to buy a new one. Every mile you drive decreases the value of your car and brings you that much closer to needing a new one. This is a big problem if you drive for a living, you’re going to need to buy a new car every two or three years and the cost of a new car is significant.

The IRS estimates vehicle cost to drive a vehicle for work at $0.54 a mile .
Broken down into
Fuel costs @ an average of 12c per mile
Depreciation at $0.24c per mile.
Repairs, tyres, & maintainence at 9c per mile
Insurance, licence, registration, finance, fees – average out to around 9c per mile

So with 54c depreciation, repairs, and fuel accounted for, we’re down to just over 6c per mile that actually goes into your hands of drivers.

Given that Uber also asks its drivers to buy things like bottles of water, gum, and chargers for it’s passengers, we can say for certain that driving for Uber pays well below minimum wage or even worse, costing drivers money (as is seen directly in this actual fare uber charged one of it’s drivers).

So given the math is so bad, why does anyone drive for Uber?
Here’s an example of a post an Uber driver posted – he was $400 behind on the rent, and needed to make up some quick cash. In a way, uber is kind of like a loans scheme.

Now for some people in desperate circumstances, what Uber’s offering might be an acceptable deal. But for most people, driving for Uber is a waste of time. I wish Uber would be more honest with people. By our calculations, the amount you’re making as an uber driver is nowhere near $19 per hour. If you drive 30 miles per hour at 6.75c per hour, you’re only making $2.00 per mile – by far the worst choice of any transportation job.

This number is supported by Not Cool Uber, who have tracked hourly earnings to be around $2.89 and, after vehicle fees are taken into account, $0.

Now – I’m not against car pooling. We all need transport, and I know I am a frequent user of Uber & Lyft. But I think that Uber is going about it in an unethical way, which makes me unethical for supporting them as a customer.

Uber could easily fix this situation : by reducing their commission, by making rates more reasonable, by giving riders the option to Tip their drivers, or just by being transparent. But that would mean admitting that they’ve generated significant revenue from effectively exploiting their drivers. So the truth is, Uber benefits from maintaining this status quo. Uber is currently reported to be making $10 billion in revenue per year – and that money has to come from someone.

Just don’t let that someone be you.

SOURCES

This video is presented by Jayde Lovell, produced and edited by Yohana Yoshe and Janina Soriano.

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  1. Your calculations do not account for tips, referrals, and self promotion that can be done via social networking. You are correct that you are trading the future value of the car for cash. But again, you do not account for the fact that cash in hand is more valuable than the future value of the car.

  2. Thats why I tried to boycott the app but I no longer have a car. People who arent for this job shouldn't do it. When I first heard about the company I thought it was legit until i figured it out .

  3. "You're going to need to buy a new car every 2 or 3 years" was the most retarded statement on this video. Yeah, if you drive a Saturn or Kia! 😭

  4. i don't get it. do people think that only fleet drivers have to do car maintenance, pay taxes, and maintain car insurance? everybody has to do that, including people with high paying cushy jobs. if they make enough money they can afford the expenses. I've been delivering for almost 10 years and while i'm not filthy rich(no one should expect any entry level job to make them rich or even upper class) i'm able to pay my bills just fine. heck I made enough money to buy another vehicle when my old one got totaled. who buys new cars every 5 years anyway besides rich people? you can get a quality used vehicle for $4000 and if you drive a fuel efficient vehicle that's easy to maintain or you have mechanical skills and can do it yourself, you can save tons on car maintenance.

    you also can't beat not having to deal with inside work, annoying co-workers and bosses, and being able to make your own schedule and start and stop when you want.

  5. Damn, I sure am losing money at $25-$35/hr and my tax deductions are about 50% of my earnings but my car isn’t a fucking Land Rover so the miles and gas and oil changes don’t cost much. You couldn’t have cherry picked data any more.

  6. People, I beg you. please. wake up.

    Don't do Lyft/Uber. You definitely have no power against them after you realize at month 2, that Lyft/Uber have been using you .  And you only have $99 left in your pocket.
    This system would never get you any savings, they sell your valuable lifetime for dirt cheap to attract people and get that money constantly from you, and you will feel sad for the car. your car hates the fact that you bought her or him.

    Many of them don't take the shower, and your back seats will get that nasty ass smells.

    I have a question for you. would you pick me up for $3? at rush hour? who in the world would do it except for the friends?
    and they are using that 20% coupons and special free rides coupon codes on holidays? so who cover that costs? you will be.
    Do you think they will raise the booking price for you? no, it will decrease the number of users. The target is always you. not the passengers, not the staffs.

    when you are near at month 4. they want you to quit for other fresh drivers who barely complain.

    Lyft/Uber takes average 40%. the half of a month time you will be pissed off I guarantee that. when everybody get pissed off and strike, then pay you a little more for 2 weeks then everything rolls back quietly, you again get that shit pay then the cycles over, they repeat this frequently.

    I BEG YOU. do something else productive when you have free time. you realize that you can survive in any other ways that's always better than Lyft/Uber.

    You will undervalue yourself and get confused. but at the end you will accept the wrong deals they play and lose ability to filter what goes right and what goes wrong.

    at month 4, they do not want you anymore. even though you have 5 stars all the time. having you over 4 months is negative profit for them(i heard this from IPO webpage i don't know why). so they pay so much less than before and those cut goes to the new drivers.

    You will feel sadness that someone used you for money, and you can't do anything about it. That damages your mentality which would cost you more money in an entire life. That's permanent damage. I'm sure those two company will collapse within two years, better engineers will make much better app for the people, that is open sources that anyone can take part and every drivers and passengers will use it. which makes driver and the passenger both happy without the man in the middle with that 40% of your income.

  7. Uber relies upon people who cant hold a job for whatever reason. Old rich guys trying to buy sex from passengers. And drug addicts who would work gladly for 25cents per ride.

  8. Worst decision is drive for companies like Uber and Lyft that don't have your back when riders damage your car and uses riders' recommendation rants to deactivate your account without factual evidence.

  9. Automation is coming and Uber & Lyft is just buying time!! Why don't most people understand that these jobs are just a part time and a quick fix to make a buck!!🤭🤪 Long term is not the solution wake up everyone!!!!!

  10. Uber is a piece of trash company. I doubt they'll exist for too many more years given all their scams and driver rapes. I predict the feds will ultimately pull the plug on their despicable company.

  11. Fucked up and sucks like a hell to drive in uber, all the fuckn money you make goes to gasoline, car care and a bit small for your stomach to eat and drink because ofcoure you will fuckn drive almost 10 hours or more to do that above. I put from my money to what I got from uber to just live Like a shit. Thus, the biggest winner here is the uber it self but not the drivers at all and believe or not, you will hate it in just a month if you work it.

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