Senior RSG contributor Sergio Avedian has seen it all when it comes to rideshare driving, including rate cut after rate cut. Since upfront fares were implemented, are drivers now experiencing another rate cut? Below, Sergio shares his findings and encourages drivers to only accept the rides that work for them – and their bottom line.
After driving for rideshare for over seven years and writing about rideshare for almost five years, I have seen a lot of changes to rideshare driver income. At best, rideshare driving is a side hustle for drivers to earn extra money – I no longer think it’s a full-time gig for most drivers. That’s in large part due to all of the rate cuts Uber and Lyft have implemented, most recently in 2022.
In 2022, Uber and Lyft introduced versions of upfront fares and destinations. Take a look at the video below to learn more about them: Uber Upfront Fare Vs Lyft Upfront Pay: WHICH IS BETTER?
As we all know, Uber and Lyft have a very low-asset business model, as the ones who do much of the work (drivers) are independent contractors (ICs). We own the cars and are responsible for all the expenses, not the companies. As such, I treat all my gig apps as my small business and my time is for sale to the highest bidder – and you should, too.
Time is Money
Seeing the destination of the passenger upfront was something that all drivers have been asking for over a decade. When Uber and Lyft released these features, this was what I saw in my app.
I have been a vocal skeptic of Uber and Lyft for a long time, and I call it the way I see it based on facts as a front-line worker, a driver. As usual, I took this announcement in stride and enjoyed seeing the rider’s destination before accepting a request. It only took me a while to realize that this was another cut, probably the fifth I have experienced in the last seven years.
One thing was evident right away: Lyft left a gaping hole in their explanation of upfront fares.
Take a look at the highlighted section on the screenshot above. What does this mean? SIGNIFICANT? I looked it up in the dictionary, it is definitely not how Lyft is using this word when it comes to trips lasting longer.
Lyft, what is the threshold where trips will get adjusted upward for more time spent on the road? Since Lyft got rid of the rate card, there is no time component involved in rideshare.
This seems to be another tactic to steal minutes from the drivers. How is it that others in the transportation industry, like cabs and trucking, still use time and distance models but rideshare companies have removed this tool?
My Time Goes to the Highest Bidder
Don’t believe me that drivers are losing their time and not being compensated for it? Take a look at the screenshots below.
Look at the estimated times that these trips came in and then compare them to the final results when the trip ended. Just on these three rides alone, the driver spent over 30 extra minutes and unfortunately he was not compensated for it. Why is that? I guess it does not match the definition of “significant.”
Here are another 30 minutes gone under the Upfront Fares definition. I am in Los Angeles, and these screenshots are from a single driver. In six rides, this person drove an extra hour without getting compensated; what is this? Are we driving for charity? Under the old time/distance model, when a trip was extended, we would expect the fare to get adjusted up. None of these fares saw an adjustment.
This is one driver; multiply this by millions of drivers. Our time is not being adequately compensated for. I guess my time is for sale to the lowest bidder, unlike the headline of this segment.
This driver has contested all these trips with Lyft in app support and was denied an adjustment on all of them. This driver did work for FREE!
Under the old time/distance model, since these are Lyft Lux trips, this driver would have made an extra $18-20 for the extra hour that he worked. Please comment below, do you think Lyft charged the passenger for the extra time?
Takeaways for Drivers
I get it, Uber and Lyft are in a rush to become profitable entities, but why does that have to be at the driver’s expense? We interviewed the CEO’s of Uber and Lyft on our Youtube channel, and they said drivers should treat rideshare as a small business. Great advice, but what small business would survive on performing a task and not getting paid for it?
I am not a huge fan of the government getting involved in my business, but I am not going to sit quietly and allow these companies to expect me to do charity work. As an IC, I expect to get compensated fairly for every minute of work I do, regardless of what Lyft’s “significant” means.
The best thing drivers can do is remember that rideshare driving isn’t a full-time gig for most drivers anymore. With rate cuts, Uber and Lyft have made it more difficult for drivers to earn like they used to – although it’s still a very good option as a secondary gig. Make sure to diversify your earnings through these channels:
What have you been noticing in your market with upfront fares?
-Sergio @ RSG