After being idle for the past two years due to the pandemic, Senior Contributor Sergio Avedian went out the past two weekends and drove partly to do research for this article as well as to take advantage of the promotions Uber was offering him. How much was Uber’s take rate, and did Sergio come out ahead? Here’s what Sergio learned while driving.
I couldn’t resist the temptation of making easy money. As I mentioned in a recent article, promotions have been luring me back, so the past two weekends I went out and gave 42 rides.
I hope the money and earnings lasts forever, but as we all know Uber is not known to offer free money to its drivers, nor do they like losing money. As you see below, after my one week hit and run, Uber did not send me a quest bonus but was generous enough to sprinkle in some consecutive ride streaks.
Don’t forget – Sergio’s takeaway last article was to sign up for Uber now to take advantage of the promotions currently offered!
How Much Did I Earn Giving 42 Rides?
Over the past two weekends, I decided to drive in the Los Angeles area and see what earnings and demand were like. I ended up giving 42 rides, and this is what I discovered.
The following screenshots are proof that juicy promotions do matter, so go get the money!
Almost $40/hr even with online time.
$60/hr with online time
I practically had the same online and active hours both weeks, and I did 20 rides to collect the quest bonus (20 for $150 + 3 for $100) the first week. The second week I did 22 rides.
Over 80% of the rides had some type of flat rate surge (penny surge) attached to them, so don’t go out there aimlessly or without a plan, be patient, surge patterns do repeat!
Both weeks my Net Fare earnings were very similar, but the promotions put me over the top the first week I drove, $298 vs. $103.50!
Who Made More Money – Me or Uber?
With the outrageous online and active hourly earnings above, I was certain that Uber would lose a ton of money on my rides for the week of Sep 20-27 and Sep 27- Oct 4. With that in mind, I broke down each ride on a spreadsheet and the results definitely surprised me.
The Uber algorithm is pricing rides to the tune of 150% higher than pre-pandemic levels.
I guess the subsidized fantasyland for the passengers is over. Fortunately for Uber and me, out of 42 rides I gave, not one passenger complained about the high prices, they all said they like the convenience factor of rideshare and would not stop using Uber.
I grossed $342 before tips, and Uber made $253 before promotions.
Remember: Uber doesn’t own the car, put gas in it, pay for insurance or maintenance. It is truly remarkable how they are able to charge these prices and get away with it. In most cases the fares are higher than cabs in Los Angeles!
After paying me $298 in promotions, Uber lost just $43 with a healthy hold rate of about 37%!
In my second week of driving, I grossed $301 before tips, Uber made $235. After eliminating my promotions to just a few consecutive streaks, Uber came ahead by $131.50 with a very healthy hold rate of 42%.
Conclusion: Uber is on the Verge of Making Money!
Gone are the days of Uber’s take rate being 20-25%. Those were the good old days!
Uber keeps promising profitability going forward. I never thought I would say this, but I think they may be on the verge of making money since their inception.
Two things are necessary for that:
- Uber has to keep charging high prices to passengers and
- Uber must eliminate all promotions for the drivers
I think the passengers will not stop using Uber, but will the drivers keep driving without these promotions at pennies per mile and minute? (Los Angeles Uber X rates are 60 cents a mile and 21 cents a minute). That remains to be seen!
What do you think of my findings? Do you agree with my theory that Uber will be profitable?
-Sergio @ RSG
