Does Uber Really Take 50%+ from Drivers?

Every week, The Rideshare Guy receives at least one email from a reader, screenshot attached, showing that Uber is taking upwards of 50% of driver fares. Does Uber regularly take 50% or more of driver fares – or are these screenshots outliers? We had senior RSG contributor Sergio Avedian analyze more than 700 trips to get to the bottom of this debate.

After being idle for two years, I was pulled in by Uber offering me bonuses that were irresistible. As a six-year veteran, I know there are three things guaranteed in life: death, taxes, and Uber’s carrot and stick tactics.

When I decided to get out there and drive, it would be on a part-time basis, and I would make sure that Uber was showing me the money. I am the chairman of the Show Me The Money Club (SMTMC) and I take pride in making the most amount of money in the shortest period of time.

How does one accomplish that? By knowing that rideshare is not a 9-5 job; you must only drive when and where there is demand. Luckily, coming out of the pandemic, Uber was experiencing a massive driver shortage, and I took advantage of it.

Quick summary:

Uber is likely not taking more than 50% of your driver fare, on average
If you’re not earning money driving, you’re doing something wrong
Don’t drive when it’s not worth it – try another gig job or simply turn off your app

Want to chat with Sergio about his findings on Uber’s take rate? Make sure to subscribe to The Rideshare Guy YouTube channel and get notified of when the Show Me The Money Club (SMTMC) is going live!

My Extraordinary First Few Weeks of Driving

Upon returning to rideshare driving, my first few weeks of earnings were nothing short of extraordinary considering Uber’s horrible base rates of 60 cents a mile and 21 cents a minute in Los Angeles.

I was making the same amount per hour ($50-60/hour) as I was in 2016. How was I accomplishing that? Due to the supply shortage, the city was covered in surge practically 24 hours a day (see embedded images from The Rideshare Guy Facebook group below!). I have always taken pride in being a surge-only/mostly driver, so surge paired with lucrative incentives from Uber made it easy for me to earn so much so quickly.

Not only was I making good money but I was having fun again. Rideshare in 2019 had become a total grind, as Los Angeles was oversaturated with drivers, and my Utilization Rate (UR) was lower than ever.

What is UR? As we all know, drivers only make money with a passenger in the car and the wheels turning. UR is the percentage of an hour you are on your way to pick up a passenger and Phase 3, which is after you start the trip.

Fast forward to September of 2021, and my UR was up to 95%! There were days I couldn’t turn my app off fast enough to take a break. After a few glorious weeks, right before New Year’s 2022, Uber started reducing and in some cases eliminating the incentives because they were losing money pretty much on every ride.

Like many drivers, I have a habit of going through passenger receipts at the end of a shift. I do this in order to figure out if Uber was taking me to the cleaners without doing any of the actual work. After all, social media is full of stories of Uber taking more than 50% of the passenger fares.

What I found is that while, yes, Uber was taking 50% or more on a few rides, when I factored in all the bonuses, they were nowhere near the percentages drivers complained about.

But what did the numbers really say? There was only one thing for me to do: come up with a decent sample size of my trips to see if Uber was really taking 50%+ of driver fares.

Assessing All of My Trips

I knew this would be a controversial article, perhaps the most controversial I have written to date. But as many of you know me, I am not one to walk away from a good fight. So bring on the hate mail!

In order to prove my point, I had to gather as much data as I could. The spreadsheet below took me about 7 hours to complete; the figures have been double-checked and confirmed trip by trip.

I hear this all the time from drivers I talk to: Uber is taking way too much money from them. Besides low base rates, Uber’s take is the main complaint these days as well as skyrocketing gasoline prices.

According to Uber’s latest earnings report, its take has definitely gone up from 16% in 2019 to 27% of total revenue as of the last quarter. How are they accomplishing this? They have raised the passenger fares to the tune of 50-80%, and they decided not to share the wealth with the drivers.

Passengers think we are swimming in cash when they dole out $30 for a three-mile ride. They have no clue that Uber is taking the bulk of what they are paying… or so drivers assume.

Trips Summary and Breakdown

Since returning to driving, I have given 788 rides. In the spirit of total transparency, I’ve analyzed each trip week by week.

If you disagree with my findings (below), have you even attempted to put all of your rides on spreadsheets? If so, you might be in for a surprise.

Were there many rides where Uber took 50% of the passenger fare? Of course, but once I factored in all the bonuses and incentives, Uber hardly made money on me.

I know I am an outlier; I only drive when Uber shows me the money and I try to stack all the incentives in order to earn $50 an hour in Los Angeles. If you are not making decent money these days, you are doing something wrong.

Here is how my trips, and Uber’s take rate, break down:

788 total trips in 30 weeks
$18.06 per trip average
337 Online hours (Time spent with the app on waiting for requests)
304.65 Active hours (Time spent driving to pickup and on the way to destination)
$42.23/hr for Online Hours
$46.72/hr for Active hours

My hourly gross income ranged from $50-$60 with a peak of $65 for a few weeks. Uber lost money during the first 3 months of my coming back to drive but the last 4 months were a different story.

Why is that? They eliminated the Consecutive Ride Bonus (CRBs) and reduced the Quests. Uber was a net loser when they were offering 3 for $20+ streaks. Ironically, Uber’s peak take rate was when I only did 2 trips at 44%, the largest weekly loss was when they had offered hours of lucrative CRBs at over 17%.

Uber’s total overall take rate from me is 9.5% in 788 trips including all bonuses and incentives. That number seems to be very low and will create controversy, but the reason for that is that I only drove when they were truly showing me the money. I encourage all drivers to do what I did, don’t just take one trip and make a judgment!

Here’s a clue for Part II of this article, why Uber lost or made money on me. Can you tell? The week with the insane Quest and CRBs, Uber lost money.

As you can confirm on the spreadsheet below, Uber lost 17.47%, meaning the passengers’ overall fare total was less than my Gross earnings.

Here’s a week where Uber did not show me the money, but I drove anyway for the article I wrote regarding how important promos and bonuses were to my bottom line. Uber made 33.53% this particular week. Stay tuned for Part II of this article, where I will go into the details of this experiment.

Takeaways for Drivers

Is this the reason Uber has not turned a profit in the last 12 years? They may be EBITDA profitable with a gross margin of 27% but in order to reach GAAP profitability, those numbers have to drastically improve. Hopefully, it is not the drivers who will pay the price for this, but if history repeats itself, it will be the drivers who get squeezed.

As much as we are between a hard place and a rock, so is Uber. When they show us the money, we drive, but Uber’s take rates decline. When they don’t show us the money, we quit, then they face a driver shortage and passenger pick-up ETAs go through the roof and the cycle keeps repeating.

Maybe Uber executives are missing a very important point: there is no rideshare economy without drivers. Maybe sustainable, profitable global businesses can’t be built on the backs of job-hopping “side hustlers”.

That is how Uber sold this gig to millions of people, but was the business model flawed from the start? Time will tell, but my crystal ball is full of headwinds for Uber in the form of an economic slowdown, or worse a recession, during which consumers will not spend $30 for a 3-mile ride or order a $25 burrito.

What do you think of Sergio’s findings, that Uber takes much less than what you think of drivers’ fares? Is Sergio missing something? Sound off in the comments!

-Sergio @ RSG