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Uber Increases Booking Fee And Effective Commission

Uber hasn’t officially cut rates this year, but they did increase their booking fee over the weekend.  The increase amounts ranged from $0.20 to $0.35 depending on the city and, while the amounts seem nominal, it effectively means that Uber is now taking a larger commission from each ride.

Uber’s advertised commission for new drivers is 25%, but since they charge a fixed booking fee directly to the passenger on every ride, their effective commission is a lot higher.  We crunched the numbers last year for an infographic and found the median ‘real commission’ over the course of 37 rides in San Francisco was 39.01%.

But now that there are higher booking fees, we re-calculated the numbers and found that Uber’s new effective commission went up to 40.44%.  So Uber will be earning more in commission on every ride going forward, but drivers will get the same amount.

Well, we saw it coming: Uber is increasing its booking fee and effective commission, meaning you'll take home less $$ than before.

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How to Calculate Per Mile Earnings Instead of Per Hour

Harry here.  Our 2017 survey found that drivers reported making over $15.68 an hour before expenses but is that the best way to think about earnings?  Today, RSG contributor W. Curtis Preston explains how to calculate per mile earnings instead of per hour.

Many drivers look at their Uber or Lyft paychecks, subtract their gas costs, and say “nice!” Uber and Lyft likely rely on this perception, because if enough drivers knew their real per-hour and per-mile rate, they might choose to do something else.

Other drivers track their mileage, multiply those miles by 53.5 cents (2017 Federal Mileage Reimbursement rate), subtract that amount from their earnings and think “I’m making less than minimum wage!”  

However, the best way to calculate what you’re actually paid is a lot simpler than you may think. What you need to do is calculate your actual cost per mile and deduct that from your Uber and Lyft pay, and I’ll show you how.

In San Diego, I make the equivalent to $17.77 per hour after expenses, which is a lot higher than the California minimum wage of $10.50. To make that outside of Uber & Lyft, I would need to get a “real job,” instead of just working when I feel like it.  So I’m happy with my hourly rate.  It covers the car and insurance payments, and all I’m really giving up is some evening TV time.

What I felt I needed to know, though, was whether or not the amount of profit I was receiving was worth all those miles I was putting on my car.  Knowing my per-mile profit also allows me to make changes to my driving strategy and see if I can improve it. Let’s see how I figured all of this out.

Ever wondered what you really make as an Uber/Lyft driver? We help you calculate your earnings down to the mile here -

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What’s The Real Commission That Uber Takes From Its Drivers? [Infographic]

Harry here.  I’ve always had a problem with the lack of transparency when it comes to TNCs like Uber and Lyft.  There are countless examples of this, but today we’re going to focus on the commission they charge their drivers.  For an app that just ‘connects passengers and riders’, it sure does seem like they take a big cut, and that number is only increasing.

Over the past few weeks, RSG senior contributor Christian Perea and I have been examining the real commission that Uber takes from its drivers, and today we’re presenting that information in an infographic.  If you’d like to share this infographic on your own website, feel free to copy the embed code at the end.

TNCs like Uber and Lyft have long advertised that they charge only a 25% commission of the fares they earn. However, these figures ignore the “Booking Fee” that both companies assess on top of each ride, which goes solely to the TNC. The resulting effects of this fee and the 25% commission mean that when passengers step outside of their Uber and only see a $5 charge, the driver will only get around half of that.

To make matters worse, Uber and Lyft have consistently cut prices so that most drivers are now driving twice as far to earn the same $10 dollars that they made only two years ago. The result is that drivers are forced to drive longer hours while incurring heavier expenses.

In the infographic below, we examined a collection of UberX trips in San Francisco to show what the real take home pay of an Uber driver looks like and show that these “Booking Fees” translate into a much higher commission than the 25% these companies advertise.

TNC Commission Infographic

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Paying Off Your Debt As An Uber Driver

Harry here.  A lot of drivers have different reasons for driving, but one thing that Uber and Lyft can be great for is paying off debt.  Today, Senior RSG Contributor Christian Perea shares some tips and resources on how he uses rideshare income to tackle credit card and student loan debt.

Most Uber drivers have debt in one form or another. In fact, the median household has $2,300 in debt. But nobody wants debt. So how do we get rid of debt while driving for rideshare?

Even though none of us will really get rich driving for companies like Uber or Lyft, I still think there are plenty of opportunities and strategies to pay down some or even all of your debt. This is especially true if you use the on-demand economy to supplement your income on top of a full time job; it’s a little bit like getting extra credit each week. If you are a full-time driver, it can be tougher because you are likely already doing a lot to make the most money on Uber, but at least you still have the option to work as many more hours as you’d like.

I Paid Off My Credit Cards Using Uber and Lyft in 2015

credit card death

Dramatic Reenactment

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