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8 min read

    8 min read

    During his usual early morning shift, senior RSG contributor Sergio Avedian has discovered that some of his Uber rides had the old surge multiplier attached. He wrote extensively about the Penny Surge (Uber Flat Rate Surge) in his previous article and explained some of his new strategies. Let’s take a deeper look at this new phenomenon of Uber possibly bringing back the old surge multiplier and sharing the wealth with their drivers.

    Over the past year, I have started driving less and less for Uber and Lyft (fewer than 20 hours a week total) and we all can guess what the reason is. Rate reductions (last one in March of 2019 in Los Angeles to the tune of 10%) have taken a toll on my pocketbook. Even with all the strategies I deploy, I can’t duplicate the good old days of averaging over $40-45 per app on hour.

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    That said, I still manage to crack the $30 barrier easily. I am a surge only/mostly driver, always have been, and Uber is still my preferred rideshare company when I decide to get on the road and drive over Lyft. The following screenshots are from Monday, November 18, 2019!

    Not too shabby for a few hours of work, about $39 per app on hour combined. Yes, there are drivers out there questioning the metric I use as far as calculating my hourly earnings. There are many ways to figure out your numbers. The most honest way is door to door hours, but how many people get paid for their commute to and from work?

    Another way is dollars per mile. I try to keep my average at $1.25-1.40 per all miles driven (very tough at 60 cents a mile in Los Angeles, hence surge only), including pick-ups and all dead miles.

    The scheduled ride (above) on Lyft started at 5 AM and I was back home at 10:15 AM that day. I drove a total of 128 miles. After the early morning Lyft scheduled ride, my usual strategy is to have coffee and wait for the morning rush hour surge to show up. The rest of the day was all on Uber since the newly introduced flat rate surge/penny surge is a lot better that the Lyft Personal Power Zones (PPZ). Did 8 trips on both platforms (average trip $21) and grossed a total of $168.58.

    My total app on hours on both platforms were 4 hours and 17 minutes, my total booked hours were 3 hours and 20 minutes and my total door to door time was 5 hours and 15 minutes. On both platforms, my per app on hour my average was $39, my booked hour (with a passenger in the car) average was $51 and my door to door per hour earnings were $32. I hope all drivers do the same and figure out if they’re happy with their results.

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    A New Discovery – Or Glitch

    For some reason Uber has increased their consecutive ride bonus (CRB) in Los Angeles over the past couple of months, to the point of making it worthwhile for me to get out and drive. This week, as seen on the Uber earnings summary screenshot above, I had three CRBs for $12.50 on Monday from 6-9 AM. I wanted to take advantage of it, but I was also leery about a thousands of drivers taking the bait and getting on the road and possibly suppressing the morning rush hour surge numbers. However, I had a scheduled ride on Lyft lined up already to take me to LAX early in the morning, so I decided to drive a few hours.

    I have many habits I’ve developed when I drive that I am on autopilot.One of them is not trusting the Uber ping screen since it only lasts about 8-10 seconds. What I do is that once I accept a ride, I immediately go to the passenger menu screen by tapping the three dots/lines on the lower right hand corner of the app, then on the next screen click on the three dots next to the passenger name and get to the main menu with all the information, and double check if the surge amount that came with the ping screen is the same as the passenger menu screen and take a screenshot of it (on my way to pick-up) in case Uber reneges on the deal. This way I have proof if I have to argue with Uber customer service representative and chase my money.

    I keep these screenshots for couple of days to see if there are negative adjustments to my individual trip earnings, then I delete them.

    On this occasion, I was out there to take advantage of the 3 for $12.50. That is $4.16 extra per ride, and considering Uber minimum fare is $2.62, that is a massive bonus. I always make sure that if I am going for CRB, the first ride of the streak is a good surge ride, because after that it is all gravy. I even take base rides to finish the streak as soon as possible to embark on another.

    On my second leg of the streak, I received a base ping, I accepted it reluctantly to continue the streak, but I thought it probably was a reject from other drivers in the area. The city block I was in was surging, and I usually won’t take these pings in a surge area, but I wanted to complete the streak I was on. Uber has a tendency of throwing base pings around to drivers who do consecutive streaks.

    I immediately went to the passenger menu and I was pleasantly surprised – it had a 1.6x multiplier on it. It was a short ride, I finished it and received another base ping in a surge zone which I also accepted in order to finish the streak.

    Take a look at the following screenshots. Reminder, like the rest of the country, Los Angeles has the flat rate surge, both these pings came in without a flat rate surge bonus or a surge multiplier but the passenger ended up paying surge.

    My Take

    So what’s going on here? How can a passenger be paying surge but the driver map doesn’t show any surge? Then once you accept the ride at base rates, you get surprised with a 1.6x surge reward.

    I don’t think this is a glitch. I think it is Uber’s way of hiding more information from the driver to try and get them to accept more base fares. Otherwise, why would they send out a base ping to a driver without showing the surge multiplier on the ping screen like they used to? Receiving extra surge on rides is totally random, up to the grace of the algorithm. For all I know, it could be related to the driver’s rating, Uber’s take rate as a percentage of the total fare, Acceptance Rate, Cancellation Rate, seniority, ride count etc.

    I thought the way Uber sold the Penny Surge was that it would be easier to understand, longer lasting and more predictable. There’s nothing predictable about this! It is a lot less transparent, and the driver now is totally in the dark regarding his/her total surge pay. Other than the base mile and minute rates in their city and the possible penny surge bonus, driver does not know what his/her final take for that ride will be when they accept the request. If I was not going for the CRB that day, I definitely would have passed on both pings and certainly I would have lost out. Is this Uber’s way of basically forcing drivers to accept base pings in the middle of surge zones?

    As we all know, Uber is trying to pivot from a top line growth story to a profitability story. I think their Revenue Percentage per Booking (RPB) has dramatically improved since they rolled out the Penny Surge (Flat Rate Surge) nationwide. Between upfront pricing and Penny Surge, they have totally decoupled what the passenger pays and what the driver receives.

    Here is a ride I was happy to take on with an $8.25 Penny Surge bonus, but even with that, take a look at what they charged the passenger for an eight mile ride – almost $38! Uber’s RPB on this ride was almost 50%.That is about $4.50 a mile, certainly more than the $2.75 a mile cabs charge in Los Angeles. Uber ripping the passenger off also reduces my chances of getting a tip!

    However, with the Penny Surge, there are some golden nuggets you will receive as a driver. These trips are rare and not the norm, as the Uber algorithm will decide how much extra it will share with the driver.

    On this trip, I ended up making $7.17 more than the hefty $18 bonus I accepted the request with. Why? Because the Uber algorithm managed to charge the passenger an exorbitant amount of $55 for an 8.5 mile ride and it decided to share some of the wealth with me. I am thankful it did, however, I’d rather know what I am exactly getting paid before I accept the job, like all other independent contractors do.

    Like Forrest Gump said, driving for Uber is like a box of chocolates, you never know what you’re going to get!

    What do you think about these adjustments on rides that have no rhyme or reason? Would you like to know what exactly you’re going to get paid before accepting the job?

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    -Sergio @ RSG

    Sergio Avedian

    Sergio Avedian

    Sergio has been driving Uber and Lyft for about three years. He has over 4500 rides on both platforms, mostly on Uber. Sergio has a degree in finance, and worked on Wall St. for over eighteen years. In his free time, he still trades stocks and derivatives for himself and a few friends. He is also a PGA certified golf instructor, teaching golf is his passion. Sergio is married with two wonderful kids who take the rest of his afternoons/weekends between their soccer practices and golf tournaments.

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