The summer slowdown is here and that, coupled with high gas prices, has us wondering: Is it possible to still make money as a rideshare driver? Senior RSG contributor Sergio Avedian went to work to answer this question and found out – yes! With the right strategies, you can keep your earnings high and reduce (as much as possible) your spending on gas.
As good as things were just a few weeks ago, the summer slowdown is upon us.
The schools are closed, morning and afternoon rush hour surges are much less robust, and Uber’s Quests and incentives have also declined.
Quick summary:
- When gas prices are high, rely on surge rides and short trips
- Get to the city center to accomplish short rides
- Use your destination filter and scheduled rides features to get to where you need to go
After its first-quarter earnings report, Uber’s CEO talked about a seismic shift and announced they would be reducing driver bonuses. Looks like Uber is following up on that!
Just take a look at some of my numbers below:
Since Uber’s incentives sometimes make up to 40% of a driver’s income due to extremely low base rates (Los Angeles rates are 60/21), I am afraid making $50-60 per hour is in the past now.
Another blow to drivers has been the latest spike in gasoline prices. Just in the past two weeks alone, California gas prices have spiked another 60-70 cents. So much for the 55-cent fuel surcharge, huh?
As you all know, I am not one to quit easily. I wanted to get out there and do about 30 trips to see what I can put together, without major bonuses, incentives, and with minimal surge.
I think Uber has found enough of a driver supply to suppress the surge or minimize it to certain pockets in the city. This is when every driver has to put their strategy hat on and try to maximize their earnings.
Below is my analysis of my weekend. What do you think? Is driving still worthwhile, or should we all leave our cars in the garage?
Recent Weekly and Daily Uber Driver Earnings in Los Angeles, California
For the week of June 6-13:
- 28 rides with $15.36 average per trip
- 12% of earnings in Promos
- $36.60 per Online Hour
- $39.09 per Active Hour
For Saturday, June 12:
- 9 rides with $15.46 average per trip
- $36.60 per Online Hour
- $37.09 per Active Hour
- UR 98% (Utilization Rate)
For Sunday, June 13:
- 11 rides with $18.00 average per trip
- $41.25 per Online Hour
- $41.68 per Active Hour
- UR 98% (Utilization Rate)
Saturday and Sunday Combined
- 20 rides with a $16.85 average per trip
- $39.20 per Online Hour
- $40.85 per Active Hour
- UR 98% (Utilization Rate)
My numbers are down substantially from a few weeks ago. Lower promos, and lower surge have taken their toll.
One thing that remains positive is demand is still strong, and my personal utilization rate (UR) is as high as it has ever been.
Earning $40/Hour on the Weekend
Every time Uber zigs, I have learned to zag. I work with what I have.
While I will occasionally complain, during the summer slowdown, $40 an hour gross is really not too bad.
However, I had to change strategy over the weekend to get to the city center and do as many short trips on surge as possible.
I had to adapt my hours since the patterns for surge that used to blanket the city practically 18 hours a day had changed over the past few weeks.
I adjusted in order to be able to do all 20 trips on the weekend on some sort of surge and accomplished that task. Since the Quest I was working toward was minimal (20 trips for $40) and there were no other incentives, surge-only trips were my main focus.
Look at the trips above; they are all on surge and all short trips. Some paid as high as $6-7 a mile!
As I have written about my profitability metrics before, one that I watch very closely is dollars per mile, which includes Periods 2 and 3. Those are Uber’s Active hours on the app.
Period 2 is the time, and miles traveled to the pick-up for which we don’t get paid.
Period 3 is the time I am on a trip with a passenger in the car. I also hate dead miles, so I use Lyft’s Destination Filter (DF) and Scheduled Rides to get to the city center.
With gas prices at all-time highs, I can’t afford to do long trips. The 55-cent fuel surcharge will not cover much, but if I kept the Active Period miles to a minimum, I would lower my fuel cost by an appreciable amount.
Another adjustment I made was not to pick up anyone more than 2 miles or 6 minutes away since we don’t get paid for those miles/minutes driven.
With all that in mind, I went to work, and I think I did well with the hand I was dealt.
Total Miles Driven and Weekend Averages
My car gets, on average, 30 MPG. It is not the best but certainly not the worst I have seen, and I can also do Comfort rides with it.
Total fuel purchases were $45 for the weekend shift, and I had some gas left when I got home on Sunday.
The following is my breakdown:
- Period 2-3 total miles = 163.5 miles
- $2.06 per mile (decent but not as good as before due to lack of incentives)
- 20 trips = $11 in fuel surcharge
- $45-$11 = $34 total gas expenditures
Just within the last two weeks, gasoline in California has spiked another 60 cents, so the 7 gallons of gas I bought cost me an extra $4.20.
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Consequently, my gross earnings were lowered by an additional 1.2%.
Is it a deal-breaker? No, but if you consider the price of gas around $4.20 a few months ago to the current $6.20, that is $2 dollars a gallon extra. The 7 gallons of gas I consumed this weekend would have cost me less than $30, but now it cost me $45.
Takeaways for Drivers
It’s tough out there for a rideshare driver. Is it the usual summer slowdown?
I sure hope so, but $40 gross an hour without meaningful incentives is still pretty good, as is over $2 per mile.
I shifted my strategy, and I will continue following this strategy until Uber changes its algorithm or there’s another driver shortage due to these outrageous gasoline prices.
As a driver, if you were not applying any strategy, now is the time to get with the program. Join the Show Me The Money Club (SMTMC).
Without incentives, bonuses or surge, you may be losing money doing trips with pitiful base rates.
I will leave you with this thought: In Los Angeles, the base rates are 60 cents a mile and 21 cents a minute. The IRS just raised the mileage expense deduction to 62.5 cents as of July 1, 2022. Our base rates are less than the allowed deduction. Can you believe it?
Have you noticed a summer slow down in your market? What are earnings like for you right now?
-Sergio @ RSG
