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12 min read

    12 min read

    Earlier this year, we covered new changes to Uber’s surge program. Called ‘flat rate surge’, we shared strategies for those affected by the change. In this updated article, RSG contributor Sergio Avedian shares additional strategies for maximizing your earnings while driving under flat rate surge for all drivers now affected by flat rate surge.

    As many RSG readers know, I am a surge only driver and have been since the first day I started driving for Uber. In past articles, I have explained in detail what some of my strategies were, and I recently shared one of my coaching student’s stories here.

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    However, Uber unleashed the flat rate surge (what I refer to as ‘penny surge’) in Los Angeles. I was hoping it would never show up, but it was inevitable. I thought all the skills and strategies I had developed over the years were trashed, and that this was Uber’s ultimate goal – equalizing the playing field between the veterans and newbies.

    flat rate surge

    For those who didn’t notice, Uber and Lyft changed the way they pay surge sometime last year. Instead of telling a driver that he or she will get two or three times the normal fare, the driver is told that they will get a fixed amount on top of the normal fare. For example, they might be offered an extra $4.50 on the next ride – regardless of length.

    Whether or not this is good or bad depends on how you view a few different things about how surge used to work. So let’s take a look at that now.

    How Uber and Lyft Surge Used to Work

    In the good old days, surge rates were a multiple of the fare regardless of how long the fare was. You were told what the multiplier was when you received the ride request. A 2X surge (meaning two times the normal fare) was fairly common in my area, and you might occasionally get a 3X fare if you were lucky. Passengers didn’t like it very much, but they really had no choice if they wanted to get home. Drivers, of course, loved it.

    old surge

    There were driver strategies designed to drive up the surge rate. Knowing that a potential surge was happening, drivers would sit there with their phones off-line waiting for the surge to get high enough, after which they would all go online and hopefully get a nice long ride with a big surge rate. This was especially prevalent at events like concerts and sporting events.

    Although it was really great when you got a nice surge ride, there were actually a lot of things about the old system that drivers didn’t like. The biggest thing was when you were sitting smack dab in the middle of a 3X surge zone and you received a ride request outside of the surge zone – with no surge.

    Another issue was the letdown that happened once you realized your 4X surge fare was only going 1.5 miles. This letdown was especially pronounced when you waited 30 minutes or more in a queue to get that surge ride, such as a sporting event.

    I think the real problem with the old surge system is that passengers started figuring out ways around it. In San Diego, for example, concertgoers at what we used to call Qualcomm Stadium would park in the free parking lot 2 miles away in Old Town and take an Uber or Lyft to the stadium. That way they could take a 10X surge back to the free lot, and it would barely hurt.

    Combine the fact that many passengers started figuring out ways around surge with the fact that Uber and Lyft both started telling drivers where there was more passengers without offering them any incentive other than getting a ride. New drivers would actually drive out of their way to go to the busy area, thus making sure surge never happened. The net effect in my market was that surge virtually disappeared.

    Driver Strategies for New Uber Flat Rate Surge

    I am not able to gross over $40 per hour on app like I used to a couple of years ago, ever since Uber’s cuts, but I thought I needed to prove that I could beat the Uber algorithms in their own game. Could I possibly revamp my driving strategy over a short period of time and earn my usual $30+ dollars per app on hour? The results have even surprised me. Here’s how I did it:

    Stick to the Three P’s (Patience, Position & Planning)

    Patience

    Recognize that, even if you’ve been driving for many years, driving professionally is its own skill. You’re thrown into the fire quickly, so it may be helpful to keep things simple as you start to get the hang of rideshare driving. Learn your best practices for driving by completing a bunch of rides.

    Do not be afraid to let a passenger know that you’re new to the platform, they’re more likely to be forgiving of any mistakes you might make and you’ll avoid getting rated poorly! Understand that, depending on when you choose to drive, customers could be either drunk enough to puke or tired enough to spill coffee all over the back seat. You’ll know, after your first few drives, what to keep with you as you move around.

    Drive often and reflect on what works for you and what doesn’t. Do not accept every ping Uber throws your way, there are many fish in the ocean. Be selective, do the rides that you want to do, and those will produce the most profits for you.

    Position

    This is something most new drivers fail at. One of the biggest problems is that they may not know their city well enough to position themselves correctly for the upcoming rush hour surge rides.

    Rideshare driving is not a 9-5 job, you must drive when and where there is demand. I would also suggest paying close attention and taking plenty of screenshots during your shift. Study them, learn from them since surge is not a mythical creature, it keeps repeating itself on a daily basis.

    Surge mostly or only driving style is something I have adapted to when I first started driving and it has worked for me. I still make $30+ per hour on app gross when I drive in Los Angeles, where rates are 60 cents a mile and 21 cents a minute. See my screenshots below.

    Planning

    The best and most successful rideshare drivers have an outline of what they’re doing in advance. One of the most eye-catching benefits of rideshare driving is having the ability to set your own schedule. It’s best to know when your best and worst times to drive are so that you can plan around anything else you have going on in your life.

    For me, splitting shifts is the best way to drive. I will try to get out with an early scheduled airport run around 5AM, as early morning surge rides can be very lucrative. Every city is different, so it’s important that you know when traffic is heavy and when surge prices are at their peaks. Taking the time to know where and when you’ll be driving saves you both money and time in the long run.

    These surge rates work differently than the old surge, so they require different strategies. A few weeks ago during a particularly busy Saturday night, I significantly increased what I would typically earn in such an evening using these strategies. The good news is they are relatively simple to understand.

    Flat rate/penny surge is plentiful so far as well as decent consecutive ride bonuses. How long will it last? No one knows, but after adjusting my strategies somewhat, I was able to achieve stellar results. You will get out of this gig what you put into it!

    Stay with One App

    Because it has brought surge back to my market where we previously had none, I’m currently in favor of these new surge methods – even though I still miss the old method. But all three of them have one thing in common: they give you an incentive to stay online with the platform in question.

    If you know your next ride on Uber is going to pay an extra five dollars, it gives you a five dollar incentive to not take the ride that Lyft is offering you without the right bonus. This means that I find myself turning on the other app much less often that I used to.

    This is even more true of the consecutive trip offer. If you have already given two out of three rides, you might be throwing away several free dollars by taking a ride on a different service. This is especially true if you are stacking a consecutive ride bonus with a surge bonus.

    New Applications with Flat Rate Surge for Old Driving Strategies

    The new flat rate surge in Los Angeles forced me to shift my focus from long 45+ to 60+ high surge multiplier rides (called unicorns) to high flat rate/penny surge short trips. I used to pretty much decline 8 out of 10 ride requests I received and cherry pick the most lucrative rides for myself. There was nothing more satisfying than accepting a long trip with a 2x surge multiplier, now all you can hope for that Uber has charged the passenger an exorbitant amount via UP (Upfront Pricing) and then they share some of that surge they charged the passenger with you.

    Well, under this penny surge scheme, those days are over. In fact, now quantity over quality may be more desirable, I can’t believe I am saying that but unfortunately it is true. However, the goal of a rideshare driver is to increase his/her earnings as much as possible by any means necessary.

    All the rides I used to decline, like pick ups from supermarkets, drug stores and Starbucks, have now become my favorites. Short 2-3 miles rides that don’t take more than 15 minutes from accepting the request to the finish. I still have my personal rules set with high standards, such as I will not drive more than 4-5 minutes to pick someone up, I will not accept pings from passengers with 4.60 or lower ratings, and I will not drive more than 2 miles for a pickups. With those rules in mind, I went out on a recent Saturday and put the new short rides with high bonuses strategy to test. I still paid attention to my three P’s to success.

    I also discovered that with the flat rate/penny surge, the second phone is a must. Instead of driving blindly into a red cloud, I immediately turned new requests off, and sometimes I even disregarded the consecutive streak bonuses. I just wanted to do short trips with high flat rate surge dollars. Well, the results were surprising to me. On that day, I only drove 250 miles door to door and almost averaged $40 dollars per app on hour.

    uber flat rate surge

    As you notice on the above screenshot, I did more rides in one 12 hour shift than I would do in a week. Was it tiring? Of course it was, but I stuck to my guns. I had multiple consecutive streak bonuses going that I burned because I only wanted to do minimum to short rides with high flat rate bonuses.

    Out of 47 trips, over 90% were surge rides and I used both of my destination filters to position myself correctly and to force the algorithm to feed me short trips. I still passed on plenty of requests, but not as many as I used to. If there is a will, there is a way.

    There are also totally unexpected and arbitrary nuggets Uber’s algorithm will pass on to the driver. I am trying to figure out the threshold for excess surge sharing, but so far the only thing I can think of is that if Uber’s take on what the passenger paid gets up to 60-70%, the system throws the driver some extra cheese. Take a look at the screenshot below.

    flat rate surge

    I wish all rides were like this but they’re not. I wish Uber was more transparent in letting the driver know ahead of time if there would be a possibility of higher earnings. Uber knows what the passenger is paying.

    Many drivers are turning down long trips since the mileage and time rates are not enough to accept those types of requests. On this trip, the total surge amount received was more than double than what came with the ping. Flat $20 surge turned into $40.82. However, this is the exception, not the norm for a short trip!

    Another Happy Rideshare Coaching Student

    This is an email I received the other day after an over the phone coaching session I did with a driver in Maryland who drives in Washington, DC. I live and drive in Los Angeles, but the basic fundamental strategies are valid for pretty much every major city in the U.S.

    PS – If you’re in the LA area, we’re thinking about doing some in person group trainings for drivers. Please fill this form out if you’d like to participate.

    My Take on Uber’s Flat Rate Surge/Penny Surge

    Flat rate surge is here to stay, but with some minor adjustments, decent earnings are still possible. However, I am afraid that the initial surge amounts are Uber’s way of pumping up their driver base in order for them to come out in droves. Will it last? Well, we all know how all good things end with rideshare companies – the minute they figure out another scheme to cut rates, they will.

    The flat rate surge gives total control to Uber over the driver as well as the passenger, as if they didn’t have enough strings to pull. For now, I will strictly drive for Uber as long as the going is good but I am not holding my breath.

    Readers, what has been your experience with flat rate surge so far?

    -Sergio @ RSG with additional reporting from Will Preston

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    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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