This is a transcript of Episode 32: What Did We Learn About Rideshare In 2015. You can find show notes, comments and more by clicking here. You can also listen to the podcast in iTunes, Stitcher or wherever you get your podcasts.
Man: Welcome to the Rideshare Guy Podcast, the site that’s dedicated to helping drivers earn more money by working smarter, not harder. So whether you drive for Lyft, Uber, Sidecar, or anything in between, we’ve got you covered. And now here’s your host, Harry Campbell.
Harry: What’s going on everybody? Glad to have you on another episode of the Rideshare Guy Podcast. It sounds like I might need to change that intro actually since one of those companies actually doesn’t exist. And I’ll actually touch on that in this episode, but Happy New Year.
Thanks for joining me, and looking forward to a really challenging and successful 2016 for myself and for everyone. So with that out of the way, let’s get started. And today’s episode is going to be just you and I, so I’m going to recap 2015, talk about what happened. And I’ll even actually go over some of the predictions that I made on the podcast last year in episode 13, where I predicted what was going to go down, and we’ll see if I was right, if I was wrong.
And the reason why I really think that this is important is because it’s obviously important to constantly be learning, and developing new practices, and learning new stuff, trying new things out, but I also think that sometimes you want to sit back and reflect. And that’s really what I’m going to be doing with this podcast today; we’re going to be reflecting on 2015, what happened, what went well, what did I get right, what did I get wrong, and what did we see at an industry level, a driver level, and also me personally too.
So we’ll talk about all of that good stuff and more, and I think the beginning of the year is always a good time to reflect, so hopefully you guys are excited about this podcast like I am, and we’ll get started. So as you guys know, new year, beginning of the year it’s always a good time to take care of all those little things. I know for me I’m always thinking about things like wills, beneficiaries, all of that good stuff. Taxes, health insurance, I’m trying to get all that stuff in order, and I usually make myself a little to-do list and start checking them off at the beginning of January. Like a resolution list, I guess, but more of a to-do list just to get my life in order.
And I actually partnered up with Stride Health, as you guys know, so they’ll take care of all your healthcare needs, especially when you switch jobs, have a baby, get married, anything like that, so definitely I recommend that you check them out. I’m using them myself, and I’m someone who doesn’t get health insurance, so I’m working for myself, like I’m sure a lot of you are, and I have to figure it all out for myself too, and also pay for it, right? That was probably the biggest thing when I left my day job to going full-time self-employed; got to start paying for healthcare, and that’s when you realize just how expensive it is, and it’s also where Stride comes in handy because they can definitely help you guys out. They’re not a health insurance company, but they are on your side, and if you guys find yourself in a similar situation, they’ll help you find doctors, pharmacy. Whether you have insurance or not, they’ll help you with all that good stuff. So check them out, stridehealth.com/rideshareguy. I’ll leave a link in the show notes, which can always be found a therideshareguy.com/episode32. So if you hear me mention any other podcast, just know that you can go in and type in therideshareguy.com/episode, and then whatever episode you want to hear, and it’ll take you right to the podcast on the site.
That’s that. And make sure that you stay tuned till the end of this podcast because I’m going to be talking mainly about the industry of rideshare and everything that happened in delivery, and with all the companies like Uber and Lyft. But at the end of the podcast, so at the very end, I’m also going to be giving you a little bit of information specific to my blog and specific to the Rideshare Guy, and talk a little bit about how my site did, how I was actually able to gross over $100,000 from the blog in 2015. And I also ended up with a couple million page views and increased my staff from 3 to 10 part-time workers. So I’m going to talk a little bit about how I did all that and how 2015 went for me at the end of the podcast, so make sure that you stay tuned.
2015: A Look Back
Looking back at 2015, it seems like the year honestly flew by, and I think every year probably seems like that but I actually recorded a podcast at the beginning of 2015, and it was episode 13, I believe, so you can go back and check that out. But I basically predicted what I thought would go down in 2015 with the rideshare industry, issues that drivers needed to be aware of, and you can actually go back and listen to that episode.
But basically the main issues that I touched on were things like insurance, regulation battles: so fights with the government about Uber, Lyft, safety background, all that type of stuff, international expansion, these companies starting to expand outside of the U.S., and I also gave some updates on the major players, like Lyft, Uber, and Sidecar. So looking back, I think a lot of what I touched on in that podcast actually turned out to be the main issues of 2015, so the first thing that I would say is insurance, right? Insurance, it’s not so much an issue for passengers anymore. I think that a lot of people were still worried at the time, at the beginning of 2015, about certain passenger insurance issues, and for me I don’t see it as a huge issue anymore. There’s $1 million of liability coverage, which is great for passengers, but it is still an issue for drivers, and we saw a lot of legislation passed in 2015.
Insurance: What’s Changed
A lot of individual states passed certain laws here and there, and that’s one of the problems with rideshare insurance, is that since it’s a state-by-state matter, you have all the states who are passing new laws and regulations, and they’re having to do it all on their own basically. There isn’t a federal level or a national level policy, so you really have laws that vary from state to state, regulations that vary from state to state, and even certain companies aren’t able to provide policies in every single state. And in fact, most of the companies that did end up coming out with a rideshare insurance product only offered it in a few states.
What we really saw, though, was a lot of legislation passed here and there in regards to rideshare insurance, but it still doesn’t quite close the gap for a lot of rideshare drivers, since during period one, it still doesn’t provide collision. There isn’t a single state yet that requires Uber and Lyft to provide collision coverage during period one. And I have some articles about insurance where you can go get a little bit of a recap, and in the podcast episodes in the past I’ve talked about rideshare insurance issues, but basically where this comes into play is when you’re out on the road without a passenger, but you have the app on, waiting for a request.
Now obviously the chances that you’ll get into an accident during that time might be low, but they also might not be that low, and Uber and Lyft and all of these companies don’t provide collision coverage during that period. Fortunately though, we did see a slew of companies start to adopt rideshare insurance policies come in, provide gap insurance during that period one and cover you for collision, and also just not drop you for being a rideshare driver. Because if you’re with one of the big carriers right now, and you call in and tell them that you’re a rideshare driver, you may be dropped from your policy immediately.
Personally I saw a pretty big opportunity with this and I developed a huge marketplace on the Rideshare Guy, which we’ll leave a link to in the show notes. But basically what it is, it’s we keep an updated list by state of all the rideshare insurance options. So if you’re in California, if you’re in Arizona, whatever state you’re in, you can go to this page. We keep it as up-to-date as we can; try to update it at least every week or every two weeks, or whenever new information comes in really. And you can find what options are available in your state, what companies; all the companies that are offering rideshare friendly policies in your state. And then we also have been working with some Asians that we’ve been able to vet, and that we can recommend. So I definitely think that you guys should go check that out on that page.
We actually have a poll, and the poll asked the question: “Do you have a rideshare-specific insurance policy?” Only 9% of people answered yes, 81% of people answered no, and then 11% of people said, “No, and I don’t want to get one.” So that’s was over 3,300 votes at this time, so a few thousand votes. So you can just see right there that there’s still this huge market for rideshare insurance, and I think a lot of these carriers are going to be developing products that will fit drivers’ needs going forward. And we saw a lot of that happen in 2015, and it was about the pace that we expected. I think we knew that the whole problem wouldn’t get solved by the end of 2015, but I think there’s more and more states that are really starting to get these options, so people are definitely aware of rideshare insurance.
But the other thing is, not a lot of drivers are switching because sometimes it’s a hassle, and sometimes they may not have options, and then thirdly they may just not be aware of it. So that’s my take on recap of rideshare insurance in 2015.
The next thing I want to talk about are the regulatory battles. So this has been something that’s really interesting for me because all of these fights with government that Uber and Lyft have been having, especially in the U.S. These came up a lot in 2015, and I knew that it would be an issue, but I actually didn’t think that it would come up just quite so many times. And I guess the biggest example, or the most publicized example, was in New York with Mayor de Blasio trying to limit the number of Uber cars, and we actually saw this story play out over and over.
A city like New York comes in and says, “Hey, we want to limit the number of Uber cars,” or “we want to require background checks,” or something that basically goes against what Uber and Lyft really want. And the big take away for me with all of these political battles is that if you don’t have the public support, and you’re a regulator, you’re a government agency, and you’re trying to do something like limit Uber, a service that every passenger loves and that consumers love, and all of your constituents are huge fans of, it’s honestly basically political suicide. It doesn’t work out very well for the regulators, for the government agencies.
We actually wrote an article about the real reason behind Uber leaving Broward County in Florida, which was another big, highly publicized battle, and while we specifically talk about Broward County, a lot of the playbook, yeah, I guess you would say, is exactly the same for every city in all of the battles that have been happening, whether it’s Las Vegas, or Honolulu, or San Antonio; wherever these companies are going in and finding that regulators don’t want to have them there. Austin is a big battle going on right now.
So typically what happens is, a city will go and try and ban Uber and Lyft. Sometimes it’s over fingerprinting, background checks, whatever the issue, and frankly a lot of times the city has pretty valid claims for coming in and wanting to regulate Uber and Lyft a little bit more. But the problem is, that they just can’t get enough support from the constituents. Uber and Lyft drivers, maybe you feel that they should be fingerprinted, for example, and I don’t think that that’s a huge barrier for Uber and Lyft monetarily or even logistically, but they refuse to do fingerprints in almost every single city.
If you’re a municipality and you try to require Uber and Lyft to do fingerprints, they’ll pull out; they won’t even stick around in the city. They’ll obviously try to rally a lot of support around their cause before they get banned, because for them it’s easier to not pull out in the first place, but they’ve shown a willingness that hey, if they don’t get their way…it’s like they’re a little kid about it, and they say, “Hey, if we don’t get our way, we’re going to leave.” And normally that’s okay, because you have a lot of the public on the government regulators’ sides, but most of the time, what we’ve seen is this ends up just putting way too much pressure on all of the city council members or the regulators that are trying to pass these laws, and Uber has gotten really good at rallying the troops.
So when they had that issue with Mayor de Blasio in New York, Uber, in just a couple days, of course they send out emails to all of their passengers. Their hundreds of thousands, or who knows, probably in a city like New York, millions of passengers they send out emails and say, “Hey, here’s all the contact information for all of your representatives: here’s their Twitter handles, here’s their email, here’s their phone number. Do you want Uber to be limited in this city?” or whatever the issue at stake is. And obviously when they send out that many emails you know that those people, those legislators, are going to be flooded with calls, flooded with emails, flooded with tweets. And just imagine that you’re a legislator in a city like New York and you’re doing fundraising events, or political events, or whatever it is, how do you think all those people are getting to those events?
That’s literally Uber’s demographic right there: the wealthy, more affluent, tech savvy type of people. And they’re all going to these events, showing up and saying, “Hey, what’s going on? Why are you trying to ban Uber? We just took it here, we love the service.” So you can imagine just the political pressure that’s on them. And in this New York case, Uber actually, even within a day or two, since New York was trying to limit the number of Uber cars, they actually made an option called “The de Blasio Option” on the Uber passenger side of the app, where you could switch over to it. It was like UberX, UberSelect, and you could switch over to de Blasio and the de Blasio mode, and that would show you what it would be like if his law passed or if his regulation passed. And basically it showed that hey, instead of being able to get an Uber within 2 to 3 minutes, now you have to wait 10 or 20 minutes, so obviously a lot of people weren’t happy about that. So, we definitely saw a lot of regulatory battles in 2015, but I think the playbook for Uber is pretty much in the books by now.
The next thing that I want to talk about is international expansion. So Uber obviously did the most here with the international expansion, but frankly I was pretty surprised at all the trouble that they had in 2015. They’re expanding constantly to new markets, but they’re really subsidizing heavily all of these new marketplaces where they’re basically subsidizing rides, subsidizing drivers, subsidizing everything. Because in places like China and India, which obviously they’re two biggest potential worldwide markets, and they’ve obviously expanded to all across Europe, Southeast Asia, South America. I actually took an Uber in Peru and Mexico in 2015, so they’re everywhere, but their 2 biggest international markets, what they’re most focused on is probably China, and even India to some degree too.
I’ve been pretty closely following the situation in China, just because from a business point of view I think that’s a really interesting dynamic, and obviously you have a lot of companies vying for that Chinese marketplace, right? With a billion people, many of whom are going from more agrarian, to the city, younger, tech type, hipper type demographic. Obviously that’s a big market share that all have smartphones, so it’s this huge market share that is just ripe for the taking.
It’s not just rideshare, it’s in lots of industries; lots of companies are trying to needle their way into China and work on that. But honestly, the situation in a place like China, I just don’t think it’s looking very good for Uber, and that’s one thing I’m really interested to see how it plays out in 2016. They raised a bunch of money; they tried to raise a billion dollars to go and invest in China for Uber China, and they had a lot of trouble with that. Frankly, it’s really never a position that Uber has ever been in. Typically in the U.S., Uber has just crushed competition; they’ve been the dominant market share player from almost day one. From the day one that they launched their UberX service, even though Lyft originally had more market share in San Francisco, as soon as they launched UberX, boom, it took off and the rest was history.
So in China right now, there are much more established players, like Didi Kuaidi, but they’re the more established, local taxi company that has really embraced ridesharing. And I’ve been impressed with a lot of these foreign companies, taxi companies; they’ve put U.S. taxi companies to shame, because they’ve adapted so quickly in places like China and India. Basically they see Uber coming; they realize that it’s not a fad. Where you should see some of the comments that I get from taxi drivers here in the U.S. I got one today from a Vegas driver that still says, “Oh, Uber will never work in Vegas,” and it’s just that type of attitude that can cause a lot of problems for your industry. And I think that’s what we’re seeing in China is the complete opposite, and taxi companies are doing a really great job.
There, they have marketplace; not only do they have market share, but they also are an established Chinese company. And if you know anything about business in China, there’s a lot of, I guess you would say tomfoolery where typically the Chinese government, the Chinese people, want Chinese companies to succeed. There’s a certain sense of nationalism and pride behind those types of companies. So it will definitely be interesting to see, because Uber right now is in a position that they’ve never been in in China; they don’t have a superior product like they did in the U.S. when they were competing with taxis. Didi, in China, has an app, they have the ability. They’re on WeChat, which is a Chinese messaging app that’s really popular that almost everyone uses.
And so it’s going to be really interesting to see what happens going forward, but in 2015, Uber spent a lot of money in China, and I’m not so sure that it’s going to work out that great. So if you guys are interested in learning a little bit more about Uber in China, the best reporting I’ve seen by far on this topic is from Sarah Lacy at Pando. You guys can definitely check it out, and hopefully I’ll have her on the podcast at some time. And Pando is just a pretty solid tech reporting site in general that costs a monthly subscription fee, but it’s totally worth it if you’re interested in any of these more in-depth tech issues at an industry level, so definitely recommend that. I’ll leave a link in the show notes.
And as far as Lyft, Lyft’s international expansion, as of today, they’re only in the U.S., and I think that’s most likely the route that they are going to stay. But the big news as far as international expansion with Lyft was that they partnered with Didi Kuaidi; so that’s the Chinese company that’s basically crushing Uber. And it’s basically Uber’s biggest opponent in China, and Lyft went and partnered with them. Didi invested $100 million in Lyft, and now they have a partnership where Lyft riders that go to China can hail a Didi car, and when Didi riders from China come to the U.S., they can haul a Lyft car, so it’s somewhat reciprocal. I don’t think that part of the partnership is a huge deal, but I do think what matters most is that real partnership behind the scenes, because frankly it makes a lot of sense, right?
Didi is probably not going to be well-served by coming here to the U.S. with no market share and competing with Lyft, competing with Uber, competing with all these other companies, Gett, and all of these other companies that are trying to do taxi stuff, or even the smaller niche type rideshare companies, it just seems like it wouldn’t be a great play for them. But here, if they come and partner with Lyft, invest in Lyft, they can I feel like the game plan is to basically give a little bit of money to Lyft and let them mess around with Uber here in the U.S., keep them busy, keep them occupied, so that Uber can’t focus their full attention on China. So I think that’s why that partnership makes a lot of sense.
And speaking of the companies themselves, in 2015, obviously there was a lot that happened with companies like Uber and Lyft, but as far as Uber in 2015, just in general with the company recapping what happened, we talked a little bit about their international expansion. But here, and honestly even all around the world, they just continue to crush it, right? They’re expanding left and right, they’re still focused on growth, growing up and out. And what I mean by that is growing up in the cities where they currently already are. So in cities all across the U.S., they want to get more market share, they want to get more passengers on the road that have never used Uber before, they want to get passengers who have a car and maybe only use Uber here and there, to ditch the car and go from taking 1 or 2 rides a week, to 20 to 30 rides a week.
So you can imagine that that’s a huge potential market for people ditching their cars in the U.S. That’s what they still did in 2015 to grow up, and then obviously just growing out. In 2015 they expanded to a ton of cities in the US; they’re in cities with as few as 100,000 people, little small college towns all across the U.S. And obviously, they did still expand it internationally quite extensively. I’m starting to get more and more emails from drivers in the Czech Republic, in the Philippines, in Denmark, all over the place. So it’s definitely interesting to see that they’re basically still focused on growth, which I think is amazing that even after five years, it’s like they’re still a little startup and their still number one priority is growing up and out.
That’s been interesting to see in 2015, just how they’ve been just killing it in the expansion department, and one thing at a driver level that I definitely saw a lot of in 2015, is just continued driver churn. I’ve written about this, and basically what we’ve seen is that hey, Uber have announced that 50% of drivers quit after six months, which obviously seems pretty high, but at the same time, they’re not having a lot of trouble finding new drivers. I think there’s just so many potential drivers out there. I’ve done some research into it and there’s 77 million hourly part-time workers, or 77 million hourly workers. You can just imagine that there’s this huge marketplace; close to three million people make minimum wage on an hourly basis, so you can just imagine that if Uber can tap that whole hourly market, the people that are working in retail and things like that, that’s obviously just a huge potential workforce, so even if they do have these issues with high churn and high turnover, I think they’ll still be able to replace the workers with new drivers.
But the big question for me is just if they’ll be able to maintain the quality of the product? I think that’s definitely going to be interesting to see going forward.
We also saw in 2015 how Uber is expanding and testing and trying out a lot of their, I call them ancillary services. So things like UberFresh, which is now called UberEats, UberRush. All of these services that are doing different things, like delivering food; I’m sure they’re even testing delivering packages.
And they haven’t rolled much of it out nationwide as far as their ancillary services, like with an UberX type product, but they’re definitely testing it in multiple markets, and I think that we’ll definitely continue to see that going forward. But in 2015, we didn’t see those ancillary services ever really become a major part of their business. I think that they’re still focused on, in 2015 at least, they were still really focused on growing that UberX market domestically and especially in places like India and China. So other than that though, beyond the ancillary services, they are making pretty heavy investments in engineering and technology. So I can tell you this just from going up to visit them and checking out their offices and just seeing how they’re expanding. They bought new offices in Oakland that they’re going to be moving into, and a new headquarters in Mission Bay, so they’re going to have a couple huge, new buildings going forward.
And so obviously they’re hiring a ton of people, but I think as far as the engineering and tech side, I think that’s where they are spending heavily and investing a lot and hiring a lot of people. Because for example, right now UberPool is a huge product, was a huge product for them in 2015, it launched here and there. Personally I’m not sure how well it’s doing. Drivers, honestly hate UberPool, and even UberPool passengers don’t really like it all that much. Passengers are very price-sensitive in the respect that they want 40% to 50% off to take an UberPool, but when they get into the UberPool and there’s someone else sitting there, then they’re pissed about it. So it’s a little bit of an interesting dynamic, but obviously Uber is investing really heavily in these technology advancements: things like UberPool, back to back rides, perpetual rides. They’re testing a lot of this stuff in places like L.A. and San Francisco, so it’s just interesting to see all the technology investments that they’re making.
And obviously a big one that’s pretty relevant to drivers is the self-driving cars, and I had Zack Kanter on the podcast a couple episodes ago and we talked about all of the self-driving car stuff. I’ll leave a link in the show notes, but this is definitely a long-term play but in 2015 they invested pretty heavily in that. Buying up and stealing a bunch of workers, I think, from Carnegie back East, and really starting to push that agenda with the self-driving cars. So that’s a quick recap of what happened with Uber, and as far as Lyft in 2015, from what I saw, I think Lyft is definitely still growing, but I didn’t see them make any real headway compared to Uber. Now obviously if you take their PR statements, and I’ve seen statements that say, “Hey, we now have 40% to 45% market share in these cities, these three cities,” which sounds great, but you always have to take those numbers directly from the companies with a grain of salt.
Uber vs. Lyft
Really I think what we saw in 2015 is that Lyft is doing well, right? They’re expanding, they’re growing, but at the same time Uber is just expanding and pushing the envelope so quickly that I don’t think Lyft is losing ground on Uber, but it seems like Lyft is just along for the ride. They’re growing at a similar pace to Uber, and since Uber has such a dominant market share here in the U.S., and outside of cities like San Francisco, especially and even outside of major cities like L.A., Lyft is really a very distant second competitor. It’s not a viable option. A lot of my audience isn’t in those big cities and they’re in smaller to midsize cities. Lyft isn’t even in a lot of cities that Uber is, and the ones that is, that are in the smaller to midsize markets, I’m just not hearing that Lyft is making any headway.
Still, if you’re driving Lyft and Uber out in the middle of Oklahoma, for example, you’re still going to get 70% to 80% of Uber rides first, and that Lyft ride might come in here and there, but it’ll have a really long ETA. So I’m definitely still rooting for Lyft, though, because I think competition is always good in any industry, and what we did see was some pretty strategic partnerships here and there with Lyft. They finally started getting on board with a few companies here and there, and I think a couple big things that happened in 2015 is just beating Uber to the punch in a couple areas. For example, launching at airports in Las Vegas, which was huge, and also launching at L.A.X.; they beat Uber to the punch there. I think things like that are where Lyft can really shine and start to gain market share.
They also had a pretty big announcement and it was a little bit cheating since it happened the first week of 2016, but they did raise another billion to put them at sales at a $5.5 billion valuation and got a huge $500 million investment from GM to develop self-driving cars. So that’s my quick recap of Lyft. And just talking about the whole Uber versus Lyft dynamics, this was a huge, I guess you would almost say, point of contention just in the media in 2014, but in 2015, we didn’t see a ton of, hey, this is Uber versus Lyft type publicity. Publicly I think that that whole Uber versus Lyft vibe and persona has died down a lot, but privately I think these companies are still very aware of each other.
Obviously they’re both in San Francisco, so in that respect, they’re reminded on a daily basis by seeing little pink signs with Lyft everywhere and vice versa with Uber. But one thing that I’ll say from meeting with a lot of people at each company respectively over the course of 2015, is it almost seems like Uber is a little bit more aware of Lyft than vice versa. It’s interesting to show, just the mindset that some of the employees at Uber have and what they’re thinking. Even though they are ahead of Lyft, they’re thinking to them, or at least what I gathered was, hey, even though we do have this distant competitor, we still want to stay ahead of them, we still know that they are a threat and we’re not going to just pretend like we’re all high and mighty and forget about them. Which in business I think is really important, whereas with Lyft, it almost seems as if they feel like they’re right there, they’re right behind Uber. When you look at the hard metrics, like valuation, number of rides, passengers, drivers, all that thing, it’s not even close.
So I think that when you are in that type of second-place situation, you just have the mentality that you’re going to be so greedy and so competitive and just do things that the other company isn’t willing to do, or just thinking outside the box if you do have the ultimate goal of catching them and basically being a real competitor to them. So didn’t really see a ton of that from Lyft in 2015, but we’ll see what happens. And they’re still up there, right? They’re not going anywhere.
One of their fellow competitors, Sidecar, actually ended up…I guess they didn’t go out of business but they did basically seize all rideshare and delivery services. This wasn’t a huge shock. I didn’t predict that it would happen, but when they made a shift to deliveries halfway through 2015, I was thinking to myself, yikes, this can’t be good. You don’t just pivot your entire business model from rideshare to deliveries, which are two related but very different spaces. My biggest takeaway from Sidecar falling to the wayside is that man, the customer really matters. Sidecar really came out with a lot of these cool, technological innovations, but they were honestly just too confusing for passengers…I mean for drivers.
They were such a driver friendly company in the respect that they had all of these cool features where you could set a destination filter, you could set your pickup radius, set your own price, but on the passengers’ end when they’re using Sidecar, it’s hard for them to figure out. It’s not rocket science, but at the same time, the Uber app, I think the simplicity and the frictionlessness, if that’s a word, of the Uber app is what made it so popular, in addition to putting it behind a good product. But Sidecar had a great product; a lot of Sidecar drivers were Uber and Lyft drivers, and vice versa. So it wasn’t so much a matter of the product was all that different, it was just the way it was marketed to consumers, which I think just shows you the product itself is important, but the manpower behind it, and the marketing power behind it, and what you’re doing to promote it, obviously had a huge impact.
And I think what customers actually wanted was just to push a button and get from A to B. They don’t want to worry about a destination, they don’t want to look at a bunch of drivers and pick. And I think you see that with Lyft too; they don’t always want this friendly option, this driver who’s going to be super chatty. And we sometimes joke as drivers that a lot of Uber passengers just get in the back seat and hop on their phone and don’t say a single word to you, but at the same time, hey, if that’s what consumers want, that’s the experience you need to provide. So, that’s a recap of all the predictions that I made in 2015, and I think I was somewhat on with a lot of these things, so hopefully you guys learned a lot from that quick recap.
What Did I Miss?
So now we’re going to talk about a couple things that happened in 2015 that I missed out on; that I didn’t really think would be huge issues, but ended up being pretty big things, or big news stories. So, the first thing that comes to mind is the W-2 versus 1099 employment lawsuit and all of the issues surrounding that, so I missed this one by a mile. I think at the beginning of 2015 I was telling myself, “Hey, these lawsuits are just your typical class action case: huge company X, greedy lawyer Y is trying to sue them and get some money out of it.” But it turns out that this case is actually a lot more than that.
And even as recently as a couple months ago when Uber did this shady thing where they made all of these drivers opt out of this agreement and have to send in an email, and we wrote a big article about what you need to do as a driver, and we had our biggest traffic day ever: close to 20,000 page view. So I think you can get the sense this is a pretty big issue for a lot of drivers, and basically what the case is is there are a few drivers who basically claim that they’re employees, and the plaintiffs’ lawyer, Shannon Liss-Riordan, who we actually had on a podcast in episode 27, is suing Uber over back pay. And they are trying to expand it to include every single Uber driver in California, and potentially every single Uber driver in the country. So it definitely has the potential to be a huge issue, and I think as far as timeline, a lot happened in 2015, but it’s definitely not going to be resolved quickly. It’s going to be a long, drawn out process. And I guess my biggest takeaways from 2015, though, in regards to this specifically, to this lawsuit, is that most drivers, they don’t want to be employees. I think that that’s pretty obvious by now that a lot of drivers of value the flexibility. And while there’s nothing that says flexibility would disappear, no one says that you have to be, if you become employees, that you have to lose all your flexibility. That’s an argument that Uber has used but isn’t necessarily true. It’s their choice.
And I think that the only problem with this way of thinking that hey, this is what we want, is that the law doesn’t necessarily care what people want, what drivers want. If you want to go work for less than minimum wage at McDonald’s, you can’t do that because the law says that there is a minimum wage, so I think that is the important thing to keep in mind.
So while I actually agree that I don’t want to be an employee and I do value the flexibility, I’m also under the impression that hey, I think that these lawsuits will actually be a good thing. And from 2015 that’s really what I started changing my viewpoint on; that hey, actually, while I don’t want to be an employee, I think that’s lawsuits like this will be a good thing for drivers, because basically there’s really no denying the drivers aren’t true independent contractors in the sense of the word right now. You have to take certain calls that might be unprofitable, and minimum fare in L.A. is $4.65, and after Uber’s safety fee of $1.65 and their 20% cut, I net $2.40. That’s not profitable for me. I would never want to take that call if I was a true independent contractor, right? I can’t set my own rates and get tips and things like that.
So there’s definitely some aspects that show clearly to me that I’m not a true independent contractor in the sense of the word, but I think this lawsuit is going to force Uber to either make drivers true independent contractors and give them a little more autonomy and freedom, or come up with something that is a little bit more of a compromise. And I do think there’s a lot of that room for middle ground. So that’s my big takeaway from the whole W-2 versus 1099 issue in 2015.
Now, the other thing beyond that that I saw really, I would say take off in 2015, is delivery companies. Basically I’m surprised that people are willing to pay $8 to get a $7 Chipotle burrito delivered. And that’s essentially what a lot of these delivery services are doing, like Postmates and DoorDash, but in all seriousness, we did see them explode. I think DoorDash got a billion dollar valuation and Postmates wasn’t far behind, showing that there is some real potential in this space. My audience personally I think that a lot of them are still primarily…a large majority are still mainly doing Uber and Lyft, and it’s really a small minority that are starting to consider delivery. But man, there are a lot of people doing delivery. You can just tell by how quickly these Postmates and DoorDash type companies were growing in 2015. I guess I just see a lot more challenges, because the competition is going to be interesting, it’s going to be tough, because it is a very crowded space. Beyond Postmates and DoorDash, you have companies like Eat24 and GrubHub, and even just restaurants that have their own delivery people in general.
So I think that this space is really crowded, and obviously you even have Uber that’s been experimenting with this a space with UberEats, and I feel like if they wanted to get into this space and they could align it with UberX and really leverage that network, they could crush this space. So it’ll be interesting to see what happens, because I think the profitability in delivery is still a big-time question. I like to joke that people are always willing to pay more for a ride for themselves than they are for their burrito. So it’s tough because at the price points for delivery is $5, $6, $7 minimum; a lot of meals don’t even cost that much or cost right around there. So I think it’s interesting to note, though, I did a survey, and most people aren’t doing delivery yet, 95% % of my audience are primarily driving for Uber and Lyft, and only a small minority, probably less than 10% from my survey results have even tried Postmates and DoorDash. And I think that because a lot of times it’s simply not available yet or they’re not willing to go and branch out from doing Uber and Lyft.
Takeaways in 2015
So there’s obviously a lot that happened in 2015, but those are the main topics that I thought about and that I explored. I would say that summarizing everything from a driver level and more of a personal point of view, I think that…and just a lot of the work that I’ve been doing. I had a few, three major observations and takeaways from in 2015 that I touched on in a recent article, but really recapping, the first thing I found was that working directly for a lot of these companies as an independent contractor, it’s not going to make you rich. You have to think about the single biggest benefit of working for these companies, and for me, and I think for most people, it’s the flexibility, right? It’s the pay. And how are you going to take advantage of that?
As a full-time driver, you’re not necessarily able to take advantage of the flexibility, you’re not able to take advantage of the pay and work the most profitable hours, so you need a set schedule, right? So right off the bat, I think you have to understand that as a driver your single greatest asset with this job is flexibility and what does it allow you to do? Does it allow you to spend more time with your kids or pick up your kids in school? Or travel the world and live in hostels for three months at a time, and then come back and work for Uber until you make enough money to do it all over again, and have that job waiting for you when you come back. So I don’t think that it is going to make you rich, but it could allow for that lifestyle which you couldn’t get otherwise, and as I’ve gotten older and the lifestyle I think is so important. And since I’m branched out on my own and gone from the corporate world to working on my own, that lifestyle is more important than ever. And I think once you realize that the opportunity is there, you can definitely figure out ways to capitalize on it.
So I definitely think that with that in mind, for others, it may be the pay, that may be the reason why you’re doing this job, but I still think it’s going to be tough to build a future off the pay rates. If drivers are making $15 to $20 an hour, it’s going to be tough to save for a down payment on a house, it’s going to be tough to max out your retirement account. So with that in mind, I think you really have to think about how you’re going to make it work going forward for you, because my big second observation and takeaway is that this industry is all about change. It doesn’t matter whether you’re delivering pizzas for Postmates or you’re just faring around a bunch of drunk people on Uber, this isn’t the type of job where you can go in and do the same thing day in and day out and expect to have a ton of success and work your way up the corporate ladder.
I think the quicker that people realize that and coming in with an open mindset and really being open to change, and accepting that what you did last week may not work because Uber’s hiring a ton of new drivers, but at the same time, there’s always opportunities to figure out ways to make it work, and if it doesn’t work for you, you need to figure out how it’s going to work, or move on. So I think that if you are out there and you’re thinking about, hey, there’s all this change, or I need help figuring this out. For me, I know one of the things that I always do is surround myself with people who think like me. There is a reason why a lot of the issues I talk about on my site are, I wouldn’t say overly positive, but I try to cultivate an audience who’s interested in getting better. I’ll definitely call out issues that suck for drivers here and there, but not every single article I write isn’t about how shitty it is working for Uber; it’s about how I can leverage this opportunity, or leverage that opportunity, or how I’m maximizing my income. Because if this was a really bad job and I wasn’t enjoying it and it wasn’t working for me, I’d go find something else.
So I know drivers who started with Uber and Lyft and were making great money, they referred everyone they could to drive, and then they moved on to Postmates and DoorDash and did the same thing. So there’s always people who are trying to stay ahead of the curve and seeing what that next thing that’s coming. So along those lines I think that you have to be constantly aware of the change, and also just do what’s best for yourself, because whether you guys realize it or not, as a driver, you are running your own business. And I say this a lot, but I’m not sure that everyone always really hears me when I say this: this is your business, and business is cutthroat. So it doesn’t mean you have to treat your fellow drivers as competitors, it doesn’t mean that you need to sabotage anyone or doing anything like that but you should always be looking for that edge up and seeing how you can outwork someone else. I never want to take pleasure in seeing someone else go through pain or go through trials and tribulations: I would rather outwork them, I would rather use my competitive nature. If I see that I am in a competition with someone, instead of hoping that they do poorly I would rather hope that I do really well.
So I think that’s just the mindset and attitude that really you need to have for this job and really any job in life. And one example that I can give when I was first getting started with my blog, and I had a little bit of traction at the time, so this was back in 2015, at the beginning of 2015. And I really just started reaching out to every single person who was doing another rideshare blog or who had written an article about rideshare, asking them, “Hey, do you want to trade a link? You link to me and I link to you. Maybe I can guest post on your site and you can guest post on my site.” Whatever it was. And I didn’t really care that I had a lot more followers or page views than most of the people I was reaching out to, and frankly that was probably a better deal for them than it was for me, but I knew that there was no way they were going to outwork me, there was no way that they were going to go and contact 175 other bloggers or people that had written an article like I did. I literally went out and compiled a list of every article I could find, and it was over 100, and then figured out a way to contact them, and reached out to them, and ended up getting 50 or 100 trading links, or blog roll links or anything like that. So they might have gotten one really good link from me, but I knew I was going to get 50, basically, and I think that’s the mindset.
So that’s really my big takeaways from 2015, and hopefully you guys can learn a lot, because like I said in the intro, it is important to reflect on a lot of these issues. I know on a personal level, that’s really all I have to say about rideshare and driving and all that. And if you guys are interested right now, I can definitely give a recap of what happened on the Rideshare Guy on my site in 2015, because for me it was a huge year. The site did really well, we saw some pretty insane growth; went from 30,000 page views a month at the beginning of the year, to close to 500,000 page views a month. For me, I’m stoked, I’m really happy to have close to half a million page views a month, and I think we had a 1600% growth rate, which may have even beat out Uber on that one.
And I probably won’t be able to keep that up, but I’m definitely happy with the growth on the blog and I think it shows that I did work pretty hard, and obviously I quit my day job during the beginning of the year, and I’m glad that it ended up working out well.
RSG in 2015
Everything got a lot bigger: the email list, social media, YouTube, everything. And along those lines I also expanded my team, because for me I really like creating content, but I’m also interested in the aspects behind running a business. And a lot of people might not realize it coming to my blog, that it seems pretty basic, pretty simple, but from now I actually expanded my team. I started with a few people helping me out part-time and I hired a bunch in 2015: got up to four writers, two of which also handle a lot of advertising and partnership work, and a Web guy that’s working for me, three virtual assistants, and an SEO guy. So it’s definitely been fun for me to figure out all of the logistical and challenges, and just learning how to manage people and run my blog like a business, which is something that I’m really interested in and definitely going to work even harder on in 2016, automating a lot of stuff and systematizing everything like you would with a real business.
So obviously that led to a lot higher expenses, hiring more people, but I think in the long term it will definitely be beneficial because I’m already seeing that my income in 2015, I grossed over $100,000 from the site, and I talk exactly about it if you guys are interested in hearing a little bit more exactly about the ways I’m making money, I touched on it in episode 26. And like I said, I had higher expenses than normal since I did hire a lot of people, but I was still able to provide a full-time income for myself solely off the blog, so definitely happy with that.
As far as the actual products, though, I did launch my course in 2015, which was a lot of work and it’s going well; we’ll be expanding that in 2016 going forward. Really considering whether how much I want to continue into the training space and start basically making the videos better, higher quality training, and figure that out. Launch the YouTube channel, both of which have done surprisingly well, and we’ll be building out an affiliate program for that video course, I’m definitely excited for that, and just considering where I want to take that and how much time I want to spend that.
And I think a big part in 2015, I think the 2 of the main reasons why I think the site saw such explosive growth: the first one, which is a little more obvious, is the media. I had huge success with the media, and the approach I took was really developing relationships with reporters instead of spamming them and saying, “Hey, link to my site. Look, I have this blog for drivers. You should quote me,” stuff like that. Reporters like that get those types of pitches all the time. It’s really figuring out ways to develop relationships with people, develop relationships with reporters, which for example, one of the Forbes reporters that I developed a relationship, I ended up asking her to connect me with her editor and getting hired as a Forbes tech contributor. So it’s stuff like that that I think really makes a difference, and instead of asking for stuff in return, just establishing yourself as someone who can be trusted and knows what they’re talking about, obviously available and just willing to help.
Because I really have never been a fan of the hey, I give you something, you give me something type exchanges. Obviously there’re certain situations where you have to be greedy with your time and do that but I think that one of my strategies with the media was really just to be of service and helping, and it snowballed from there once I started getting a few good mentions here and there. At the beginning of the year I started off with a great feature in “Wired,” and started getting a few more, and then just became a go-to person, so that media definitely helped. And then the second thing which you guys can hopefully relate with, is just the community that I built, and I think this was probably the main area and the main contributor to the growth of the site, because for me, I really try to connect with my audience. Obviously I love the podcast because I get to have a one-on-one conversation with every single person that’s listening, and hopefully you guys feel like that.
But beyond the podcast there’s also the blog obviously and the YouTube, and if you guys have ever emailed me, I work really hard to respond to every single email. I spend a lot of time on email and communications, responding to comments, doing social media, and I do all that stuff myself, which I think for a site that gets 500,000 page views a month is probably pretty uncommon. You generally will have a social media manager, or you’ll have someone helping out and responding to all your emails, and for me, it’s something that I enjoy doing, but I also think that it’s just important because it helps me stand out. There aren’t many sites that are this big where you can go and email the owner, and he’ll respond to you personally. Now I might not be able to read a six-page email, which I do get from time to time thoroughly, but if it’s a quick question I’m more than happy to help and obviously I tailor a lot of my resources to answer those email questions that I get.
So I guess connecting with the audience, that has been a huge part of my continued success, I think, because people are really surprised when they get an email from me. And I know that they like to repay me by either signing up with one of my affiliate links, or sharing my articles with the community, or even just telling other people about the blog, which is obviously the most helpful, and just sharing content, sharing the site, and sharing resources.
So I think that’s one of the areas that is a little bit hard to track, but I think has been a huge boost for me and I’m really proud to say that it’s gone well. So for me, I’m still writing, I’m still podcasting, I’m still doing YouTube videos, so that was one of the things I focused on in 2015; I really wanted to continue producing content. Obviously I have other writers that help me, but I’m still doing one article a week, I still do one podcast every two weeks, and two YouTube videos every single week. So now that I’m thinking it all over, man, that sounds like I’m doing a lot of work, but luckily I enjoy it and it’s really rewarding. So thanks to all you guys who help me with that and supported me with that; I definitely had a great 2015 and looking forward to the future.
So hopefully you guys enjoyed this podcast: my New Year’s resolution was to make my podcast a little shorter, pack more punch, get to the point, and I think that I didn’t do the best job of making it shorter but I’m trying to make the intros and outros a little shorter, and just pack more punch with the content or with the people that I’m interviewing. And we’ve got some pretty exciting interviews coming up in 2016 that I’m definitely looking forward to. I’ll be spending a lot of time on my video course, the podcast, and working that out. If you guys haven’t checked out the video course, definitely recommend. Check it out over at maximumridesharingprofits.com. We’re adding a ton of content, we’re sending out weekly updates now with videos, so if you’re into the video content, we’re starting to add a lot of production value, release some cool, new videos. We just released a huge a series on dash cams, all that kind of stuff has been really fun.
Hopefully you guys enjoyed this episode, and once again, this episode was brought to you by Stride Health. They’re a company that connects self-employed workers with healthcare coverage and healthcare for free. So whether you have insurance or not, Stride will help you figure out where you can get care and how much you’ll pay. They’ll even help you find doctors, get discounts at the pharmacy, all that good stuff. And you guys know I started using Stride last year, in 2015, so I can personally recommend it, and my favorite part of all is that it’s free.
So definitely check it out: people who have purchased health plans have saved $400 bucks a year, and even if you already have health insurance you can still sign up. So check it out: stridehealth.com/rideshareguy. You can also check out the show notes, subscribe to the email list at therideshareguy.com/episode32. Make sure if you’re not on the email list, definitely sign up for that. You get notified of all the new articles, podcasts. We promise that we won’t send too many emails; just that we try to send just the right amount, so I definitely recommend signing up for that.
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This is a transcript of Episode 32: What Did We Learn About Rideshare In 2015. You can find show notes, comments and more by clicking here. You can also listen to the podcast in iTunes, Stitcher or wherever you get your podcasts.