Periodically, Uber and Lyft send out promotions that look juicy to drivers, sometimes offering $1,000 or more in guaranteed earnings. How do you know if these promotions are worth it? Senior RSG contributor Sergio Avedian shows the exact strategy he uses to determine whether or not he’ll accept a promotion from Uber or Lyft.
Recently, an RSG reader received the following incentive from Uber. This guarantee has three tiers, but is it worth it?
Understanding an Uber Guarantee
To those who don’t know much about driving, this may look like an enticing offer. It’s legitimate and offers drivers big dollar signs. It’s guaranteed money, too!
However, what do these numbers entail and what do they require from drivers? First, it looks like this may be an offer for full-time drivers as it requires about 40 hours a week to complete, according to Uber.
All three offers are valid for driving passengers around, food deliveries, and a combination of both.
Uber typically offers better promotions and incentives than Lyft. Looking to earn more? Sign up with Uber below!
First Offer Breakdown
315 trips / 30 days = 10.5 trips average per day
$3530 / 315 trips = $11.20 per trip
About 40 hours a week driving doing rideshare or food delivery (UberEats)
$3530 / 160 hours = $22.00 Gross per hour
Since Uber has instituted a fuel surcharge of 55 cents for rideshare and 45 cents for Uber Eats, you may get up to an extra $173.25, which will help with your gas purchases. But in the small print below, there is no mention of the Fuel Surcharge, possibly because this offer was presented before the fuel surcharge announcement.
Second Offer Breakdown
210 trips / 30 days = 7 trips average per day
$2350 / 210 trips = $11.20 per trip
About 25 hours a week driving doing rideshare or food delivery (Uber Eats)
$2350 / 100 hours = $23.50 Gross per hour
Third Offer Breakdown
140 trips / 30 days = less than 5 trips average per day
$1570 / 140 trips = $11.20 per trip
About 20 hours a week driving doing rideshare or food delivery (Uber Eats)
$1570 / 80 hours = $19.65 Gross per hour
There is one constant in all of these offers, a per ride dollar average of $11.20. One could choose to drive part-time to full-time depending on which offer they pick.
However, is it a smart thing to do? It seems like the second offer at $23.50 GROSS per hour is the best choice. However, as a driver, you must consider different profitability metrics, which I have written about in the past.
After you take out your expenses, it looks like a driver would be making less than minimum wage with all three offers.
Plotting Your Strategy
If I were to choose any of the above offers, I would most likely decide to go with the highest amount. Why? Because I would have a strategy to complete it.
What would that be? In Los Angeles, we have two major colleges where all these rides must take place according to the Uber small print. They are the University of Southern California (USC) and the University of California, Los Angeles (UCLA), and as we all know students take a lot of short trips in and out of the campus. They go from class to class, and to different dorms or fraternities during the week and weekends.
I would park near one of the colleges and knock out the first offer in less than 30 days with minimal wear and tear on my car and brain. Yes, you may have to deal with drunk frat boys but it may be worth it to some drivers.
However, one note of caution, Uber is not stupid! Did you notice that as a driver you must choose one of these offers by March 16th and you have 30 days to complete it? Unfortunately, the college campus driving strategy may not work out that well since you must complete this guarantee in 30 days, and that period is during Spring Break and Easter holidays.
Why is Uber being so generous with a guaranteed offer? It is because they are looking to lock down the driver for a certain amount of time only on the Uber platform. Since many drivers switch between apps, guaranteeing a driver supply with this strategy seems like a smart idea on Uber’s part.
Would I Take These Offers?
Absolutely NOT! I am the honorary Chairman of the SHOW ME THE MONEY CLUB (SMTMC).
I only drive when Uber/Lyft show me the money, as I did recently. I had not given rides for Uber in more than two weeks, and then Uber offered a decent Quest and I started my car.
My goal is to make the most amount of money in the shortest period of time.
Any decent driver should be able to average a minimum of $25-30 per hour in Los Angeles. Take a look at my numbers below from last weekend. That is much better than all the three offers above.
$39 per Online hour, $43.25 per Active hour
Takeaways for Drivers
I receive guaranteed earnings offers all the time, especially from Lyft. I will not be locked down as a so-called Independent Contractor (IC), I will always choose the best incentives offered by a multitude of app-based on-demand companies. I am a veteran and as such, I should be able to earn a lot more than the average driver, which I do.
But all three offers could be decent for deliveries only, as the hourly earnings seem like they are in the ballpark for an Uber Eats driver. There definitely is more money in rideshare, there is no denying that, even with astronomically high gasoline prices. Since I don’t do food delivery, I would not attempt any of the above.
Have you received incentives like the one listed above from Uber or Lyft? How do you determine if accepting these incentives is worth it or not for you?
-Sergio @ RSG