I know a Driver that took a trip to Cupertino and thought he was going to make money doing so. Boy, was he pissed when he did the math. He drove 2.5 hours, for a total of 87 miles and the fare for the trip was $88.00. After dropping his first rider off he received a second ping so he added a local Cupertino trip to his fare for an additional $7.00, increasing his income for the trip to $95.00. You would think this driver did pretty good on this trip . . .
- Total Fares: $95.00 Total Revenue: $95.00
- Time In Hours: 2.5 Commissions: $18.60
- Total Miles Driven: 87 Vehicle Cost: $48.72
- Cost Per Mile: $0.56 Gas Cost: $8.10
- Miles Per Gallon: 35 Safety Fees: $2.00
- Price Per Gallon: $3.259 Net Profit: $17.58
- Number of Rides: 2 Average Rides\Hour: 0.80
- Safety Fee: $1.00 Hourly Wage: $7.03\Hour
- Uber Commission: 20%
This calculation fails to pay the driver’s own business. As Independent Contractors the driver is also his own small business. If the driver’s small business does not get paid a portion, how will the driver pay for maintenance, water, candy, phone power cords, or be able to purchase a new car to continue his company after his present car fails? So, just for the sake of discussion we need to pay the driver’s company $2.50 per hour or $7.50 out of the drivers Net Profit above, leaving $10.08 as the new Net Profit. This leaves the driver with a Gross Pay of $10.08 or $4.03 Per Hour. Now we have to take the standard payroll tax deductions from his Gross Pay. As the drivers are Independent Contractors Uber does not withhold taxes, nor contribute an employers share to the taxation. So, the driver is responsible for both the drivers tax and the employers contribution, leaving the driver with an obligation to pay Self Employment Taxes of about 25%. $10.08 at 25%= $2.52 $10.08 –$2.52=$7.56 which means the driver’s Net Profit is actually $7.56 or $4.03 per hour as his Hourly Wage.
It is not reasonable that Uber has reduced rates to such a degree that it leaves drivers with not even the minimum wage. Uber screams to the public that drivers are making lots of money, every figure they present the public is above minimum wage . . . And, it is also a LIE! Independent Contractors are not protected by most Labor Laws and have little Governmental regulation, leaving Uber the ability to set rates at whatever level they choose and divers with nobody to represent them when rates drop to low to pay their obligations nor feed their families.
The drivers are subject to a contract pushed through their SmartPhone while at the same time an Update to the Uber System was being done. Most drivers did not even realize that one of the clicks they made was a contract change for weeks after it happened. A few drivers have tried forming an Association to represent them, but without funds to put the word out to all the drivers nation-wide and the necessary funds to actually create the Association, progress is very slow.
There are over 162,000 drivers being subjected to Uber’s abuse and they need help. They need Government intervention. They need Legal Representation. They need someone that knows what to do in this situation other than for them to quit working for Uber. Some drivers are stuck where they are because they have purchased cars via the Uber Auto Purchase Program. Other drivers have not yet realized how poorly they are being paid, and Uber is hiring more drivers every day. As far as Uber is concerned, drivers are nothing more than a “commodity” and no concern for their obligations or needs of their families is part of the plan for Uber’s future.