Recently, senior RSG contributor Sergio Avedian shared his analysis of Uber’s take rate for drivers. Many drivers assume Uber takes 50%+ of all fares, but that’s not quite true (even though it does happen occasionally!) Below, Sergio shares what happens to his driver take rate percentage when he removes incentives. Does Uber’s take rate skyrocket? Keep reading to see!
Other than low base pay, most drivers I talk to complain about how Uber takes 50-70% of what the rider pays without Uber doing any of the work. I completely agree with the driver community that, as so-called Independent Contractors (ICs), we have no say in any part of this gig other than when to turn the app on and off. Almost everything we do is decided by super fast algorithms, including what the passenger pays and what portion of that the driver receives.
In Part I of this article, I outlined Uber’s overall take rate (9.5%) for me by working on a spreadsheet for 7 hours, analyzing my 788 trips since I returned to driving. I thought it would be a controversial article, and I would get a lot of pushback.
As I had expected, some drivers kept repeating that Uber’s take rate was too high, but when asked to put a decent sample size on a spreadsheet, as I did, I did not hear from them.
Surprisingly, there were also a lot of comments which were appreciative of the work I did, so please leave your thoughts and comments at the end of this article.
In this part II, I am going to dig deeper with a new spreadsheet and explain why Uber’s take rate on some weeks resulted in net losses for the company and why on some weeks, they made substantial amounts. It comes down to one word: INCENTIVES!
Quick summary:
- With incentives, Sergio found Uber only takes around 9% of drivers’ fares
- Without incentives, that percentage jumps to 40%!
- Drive smarter if you want to increase your hourly earnings – the key is to drive for incentives
A Quick Recap of Uber’s Take Rate
Take a look at the spreadsheet below, from my first article analyzing Uber’s take rate.
- 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 pick up and on the way to destination)
- $42.23/hr for Online Hours
- $46.72/hr for Active Hours
I analyzed 788 trips week by week by adding what the passengers paid and comparing the sum to my weekly gross earnings, including Quests, Consecutive Ride Bonuses, and Boost. Uber’s total overall take rate from me is 9.5% in 788 trips, including all bonuses and incentives.
In my first article, several readers said Quests shouldn’t count, but I disagree. Although it is a carrot/stick game played by Uber, I always choose one that I know I can finish. As the chairman of the Show Me The Money Club (SMTMC), I also drive only during the hours when I can stack all the incentives and bonuses to maximize my earnings.
However, due to that feedback from you, the audience, I’ve provided another spreadsheet below without all the incentives. This means you’ll only see surge and base rates, which in Los Angeles on Uber X are 60 cents a mile and 21 cents a minute.
Remember that as drivers, we must drive with Patience, Position, and Planning. If you don’t apply any strategies to your driving, you won’t get anywhere.
Uber’s Take Rate Without Any Incentives: How Much is Uber Really Taking?
Without incentives, here is the breakdown:
- 788 total trips in 30 weeks
- $12.06 per trip average
- 337 Online hours (Time spent with the app on waiting for requests)
- 304.65 Active hours (Time spent driving to pick up and on the way to destination)
- $28.21/hr for Online Hours
- $31.21/hr for Active Hours
In this scenario, without any incentives, Uber’s take rate on all of my rides was 40.8%. This is much higher than the 9%, when I included all of the incentives. That said, it’s still not 50%+ like some drivers claim.
Takeaways for Drivers
Wow, what a difference Incentives make on drivers’ overall income. Without Quests, CRBs, or Boost, my numbers are about 30% lower than the previous calculations, and Uber’s overall take rate jumped from just 9.5% to over 40%!
So this analysis solidifies my thought process that every driver should join the Show Me The Money Club (SMTMC) if they can.
Your goal is to drive only when rideshare companies show you the money. If you do not, you are relying on just surge, which is non-existent in many cities, and driving on base rates is a money-losing proposition.
Would I drive without promotions? If I needed to put food on the table, probably YES! Even with Uber’s outrageous take of over 40%, I still averaged $28-31 GROSS per hour, which is double the minimum wage in most states.
Have you ever calculated Uber’s take rate on your rides? What do you think of my findings? Share your thoughts below!
-Sergio @ RSG
