One of the things I love most about this site is sharing unique opportunities or figuring out new ways for drivers to increase their earnings. I don’t mind revealing all my secrets because I know that there will always be more and it forces me to constantly think outside the box. But one thing that you may have realized by now is that opportunities come and go very quickly in this industry. A year ago, there were engineers and other professionals leaving their full-time jobs to be UberX drivers.
But today, you won’t find many people leaving their high-paying careers to drive for UberX. It’s still a great job for many and there are plenty of drivers who are making it work, but there’s also no denying the fact that it just doesn’t pay as well as it once did. There’s a reason why half of Uber drivers are gone after one year and many of us don’t consider this a full-time career.
Recently, my mission to work smarter, not harder landed me on UberPlus. In most cities, it’s actually called UberSelect but I’m going to refer to it as UberPlus for the purpose of this article since that’s what it’s called here in Los Angeles.
For those who don’t know, UberPlus is somewhere in-between UberX and UberBlack in terms of pricing and luxury. It’s a relatively new service that hasn’t been rolled out to every market yet, but it seems to be doing pretty well so far. I’ve spent the past couple months researching UberPlus (and UberXL to some degree too) and today I’m going to present everything I’ve learned.
The first thing you’ll want to check is whether or not UberPlus is even available in your city. For whatever reason, Uber is rolling out this service very slowly and places like Phoenix have it but San Francisco doesn’t. Go figure. Here’s a list of all the cities that have UberPlus as of today (5/20/15):
Here’s a list of approved vehicles for UberPlus in LA, OC & SB to give you an idea of what type of cars they accept:The nice thing about UberPlus is that rates are closer to UberBlack than UberX yet you don’t need any of the commercial insurance, licensing and permits. In order to drive with UberPlus, all you need is an entry level luxury car that is year 2007 or newer. Uber doesn’t make it easy to figure out which types of cars qualify but you can check your local partners website or e-mail Uber support to figure it out.
The requirements (age and car type) will vary from city to city but this list above should give you a rough idea of the types of cars that they are looking for.
Why UberPlus Dwarfs UberX Money
I’ve known about UberPlus for a while but it wasn’t until a few months ago when I first tried it as a passenger. Since I’m always referring new passengers, I rack up a lot of free $20 ride credits (btw, have you gotten your free ride yet?) with Uber and my most common route is from my house to John Wayne Airport in Orange County. That fare costs around $7-$10 since it’s so close but I always felt like I wasn’t getting my money’s worth since the free ride was for up to $20.
Related Video: Referring New Uber and Lyft Passengers: Free Rides vs. Cash
Since most of my free ride value was going to waste, I figured I might as well try UberPlus and that way the driver could get paid more. Low and behold, after my first UberPlus ride the fare came out to close to $24. It was at that moment that I realized just how valuable UberPlus could be for drivers.
Work Less, Earn More
Now that you have a little background on UberPlus, I’m going to tell you why I think it represents a huge opportunity for savvy drivers. We all know that the UberX market is getting saturated yet there isn’t a whole lot we can do about lower rates. No matter how hard we try, there is only so much you can make from just driving. Obviously I’m a big fan of leveraging all the ancillary opportunities of driving (networking, promoting a business, etc) but there’s no denying the fact that drivers are making less today than they were just one year ago.
The biggest challenge with UberPlus is figuring out whether lower demand is offset by the higher rates. But there really isn’t a good way to determine this other than going out there and doing it for yourself. Most of the UberPlus drivers I talked to felt like demand was about half that of UberX. But what I think many of these drivers failed to realize is that even at half the demand you are still coming out way ahead on UberPlus.
A few months ago I worked with Sherpashare (affiliate link) to get the average trip length on UberX rides for five major cities. Using that data (4.54 miles and 12 minutes), I calculated that UberPlus will pay anywhere from 1.9 to 3.3 times higher than UberX depending on the city. At the low end of the spectrum in a city like Phoenix that pays 1.9x, you can essentially do half the normal UberX volume and you’ll make the same amount off fares BUT your expenses will be cut in half since you’ll be driving half as much.
At the high end of the spectrum in a city like Los Angeles (where UberX rates are very low and UberPlus rates are very high), you will actually earn 3.3 times more with UberPlus than you would for the identical UberX ride. That is a huge spread and it essentially means that you can get less than 1/3 the request volume of UberX and you’ll make the same amount PLUS your expenses will be cut by 1/3.
Here’s a summary of the calculations I made for an average ride of 4.54 miles and 12 minutes. The prices listed below are the payouts that the driver would receive for identical rides on Lyft, Uber and UberPlus. The percentage increase is how much more UberPlus pays compared to UberX for the same exact ride:
Work Smarter, Not Harder
One of the worst parts about driving UberX right now for me is the payout on a minimum fare. In Los Angeles for example, the minimum fare is $4 yet after Uber’s $1 safe ride fee and 20% commission, drivers are only making $2.40! That is an insanely low amount considering the work that could potentially go into each pick-up. I’ve had a number of minimum fare rides where it took me 10 minutes to get to the passenger, I waited another 5 minutes for the passenger to come out and then we did a 5 minute ride. My payout: $2.40. Now that just isn’t going to cut it.
We covered tips and strategies on avoiding minimum fares in our video course but at the end of the day you never really know where passengers are going to want to go. The nice thing about UberPlus though is that even though the rates are actually just over double UberX rates you still make 3x on these short rides because of a much higher minimum fare amount.
Let’s look at the Uber rates in LA in more detail:
The biggest killer on UberX minimum fares is the $1 safe fee which represents an additional 25% ‘commission’. Add on the 20% Uber fee and you actually pay 45% commission to Uber on all minimum fares. That’s why I try so many different strategies to avoid minimum fares. They are real income killers.
You can see that with UberPlus compared to UberX, the per minute rate is just about double and the mileage rate is 2.5 times higher. But with a minimum fare of $10 on UberPlus, the safety fee now only represents 10% commission. So on a minimum fare with UberPlus, you’re only paying 30% commission compared to UberX where you’re paying a 45% commission for the exact same ride.
On minimum fares with UberPlus, you end up earning 3x more with comparable expenses (since the trips are so short) and you’ll pay 30% commission instead of 45% with uberX. This is a key benefit to UberPlus because as we’ve learned there are only so many rides you can do in one hour. Even if you’re the best UberX driver on the planet, there are a lot of things that are beyond your control.
What About Surge?
So far, all of the comparisons I’ve done have not included surge on UberX. We know that UberX surges more often than UberPlus and in some major cities like LA and San Francisco there is a whole lot of surge on UberX. You’ll definitely need to account for surge rides and depending on when/where you drive, it could make UberPlus less attractive.
I would say that a good conservative estimate of surge for someone who really drives during peak times would add 50% to your fares. That means that on all of your combined fares from any given week, you are getting 50% on top of your normal fares.
In most cities, as an UberPlus driver you actually have the option of accepting UberPlus rides only but you can also leave an option to accept UberPlus or UberX. When it is surging on UberX, it may make sense to actually log on to the latter option (Plus and X) so that you can capitalize on higher rates and a greater probability of getting a ride. I would enable the dual option once surge hits 2x on UberX or higher.
Here’s a video explaining how to set up your Plus (or XL) account to only accept Plus rides.
The Biggest Challenges With UberPlus
From drivers that I’ve spoken to, I think the demand is there to warrant giving UberPlus a shot in many cities. But like with UberX, once drivers start to realize the earning potential, it’s very likely that it could get too saturated. So with that in mind, you need an exit plan.
I don’t recommend that you go out and buy a brand new Audi but depending on how serious you are about earning more money, there could be an arbitrage opportunity by trading in your current vehicle for a nicer one. This is definitely something that you’ll want to research since it depends on your personal circumstance and several other factors that are beyond your control.
The best option though in my mind if you want to give UberPlus a try is to lease a car. Traditional leases won’t work well though since you’ll be locked in to a 3 year commitment and this opportunity may not last for that long. Uber offers leasing services to its partners but they have been chastised by drivers and the media for partnering with companies like Santander, a predatory lending service.
I don’t think anyone should jump right into UberPlus after reading this post, but my hope is that this article will at least get you thinking about whether it may make sense or not. If you’re on the high end of the spectrum and you were getting ready to buy a new or used car anyways, I would definitely consider a Plus eligible vehicle.
In that scenario, you’ll want to look at the difference in price and make sure that you also take into account continued maintenance costs. It’s a lot more expensive to do maintenance on an UberPlus eligible BMW than it is on a Honda Accord (unless you go with a leasing company like Car Champs that includes maintenance). But there are quite a few entry level luxury cars on that list that have lower maintenance costs and could be a good deal.
Test It Out Before Buying An Expensive UberXL or Select Vehicle
UberXL and Select vehicles are obviously a bit more expensive to buy and maintain than a Prius. They also eat up a lot more gas. So before going out and buying a brand new Mercedes to do Uber Select we recommend renting one from HyreCar for a few days to see how busy your market is. That way you can determine whether or not its worth it to commit to a shiny car. They are also a good option for when your car is in the shop for a week or so. Check them out here.
The Quick Hack to UberXL
I wanted to focus on UberPlus for this article but a lot of the same analysis applies to UberXL too since XL prices are in-between UberX and UberPlus (actually closer to UberPlus). UberXL is available in every city nationwide and any car that seats 6 or more is eligible. The same age requirements apply to UberXL that apply to UberX so in Los Angeles for example, you can drive a 2000 or newer mini-van with 7 seatbelts total and qualify for UberXL.
From drivers I’ve talked to, demand on UberXL is similar to UberPlus or even a bit higher but obviously the clientele is a lot different. You get a lot of people who have 5-6 passengers but that actually represents a fair number of rides since we all know how frequently UberX passengers love to try and cram 5 or sometimes even 6 people into our cars.
Ultimately, the decision to buy a car for UberPlus or UberXL will never be a slam dunk. If it was a no-brainer, then it would already be saturated with a bunch of drivers. Like with other opportunities, this one won’t be around forever either. There is obviously real risk with purchasing a new/used luxury or XL car but it’s up to you to determine if the reward is worth it or not.
If you’re already driving for UberPlus what’s your experience been like so far? Have any UberX drivers recently made the switch or currently considering it?
Make Every Mile CountDid you know that every 1,000 business miles can generate $535 in tax deductions? Never miss another mile with the new QuickBooks Self-Employed automatic mileage tracker.
-Harry @ RSG