9 min read

    9 min read

    It’s time for another YouTube Live recap. Each month, Harry goes live on YouTube to discuss some of the latest breaking news in the rideshare industry as well as to answer questions.

    This week’s video provided an AB5 update and answered some important questions about this bill going into effect along with some helpful tips and strategies to help drivers boost their earnings despite Lyft’s recent pay system change, overall mileage cuts, and the TLC’s rule for NYC drivers.

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    Feel free to check out the full video below, or go through this summary to stay up-to-date with the latest rideshare news.


    So, When Will AB5 Actually Go Into Effect?

    You’ve probably heard us talk about AB5 so much lately, and that’s because even though this bill was only passed in one state so far, it’s huge for rideshare drivers everything who are looking for longevity in the industry.

    California’s Assembly Bill 5 is a bill that could potentially turn drivers from independent contractors to employees. The bill was actually passed in California and just needs to be signed by the governor, which is a bit of a formality at this point.

    AB5 will officially go into effect on January 1, 2020. There still seems to be a big legal battle between rideshare companies along with the question of who will actually reinforce it.

    Even though the bill is going into effect on January 1, rideshare drivers in California shouldn’t automatically assume that they’ll instantly become Uber or Lyft employees or get paid like one. Uber and Lyft basically said that won’t be happening.

    Why Do Uber and Lyft Seem to Treat Drivers Like Children?

    This question came up during the YouTube live session, and it’s interesting to think about as Uber and Lyft often act like they’re shielding rideshare drivers from the bad government decisions and new changes that could potentially cut income.

    However, it’s ironic especially when Uber refers to drivers as ‘partners’ but it never feels like a true partnership. In terms of AB5, Uber and Lyft seem to want to control drivers like employees but don’t actually want to give them that title and pay them like employees.

    Overtime, rates have been cut and drivers are becoming more and more restricted in terms of when they can drive and where in some areas.

    A prime example of this is Lyft’s new rate cuts in quite a few cities. Drivers can now start getting paid from a trip as soon as they start it (drive time to the passenger pick up location), but they’re earning a lower rate and less money overall.

    Did Lyft Change the Rules for the Airport Queue? Short Rides No Longer Get 1st in Line in the Queue For the Next Ride?

    A reader brought this up and Harry wasn’t sure if this feature was taken away completely, but generally in most cities, if you are waiting for an airport trip and get a short ride, you’re allowed to still go to the top of the queue afterward.

    If you’ve experienced being kicked out of the queue or having to start all over again after a short ride, feel free to share your thoughts in the comments below. Harry admits he doesn’t really find airport queues worth the effort since you’re spending time waiting around for the next ride and not making money, but we’re always interested to hear any strategies you have that can help drivers work around that drawback.

    Rates Are Getting Cut in Cities like San Diego and It’s Leading Drivers to Rely More on Tips. What Else Can They Do?

    Ultimately, rideshare companies cutting their rates is never good news for drivers. The only potential silver lining is that if one company makes unfavorable changes, you can switch and start driving for the other company.

    Unfortunately, Uber tends to copy Lyft and vice versa when it comes to making changes, so checking out the competition may or may not help in the long run.


    Another driver mentioned how rates were cut to a low $0.30 per mile in North Carolina. This is especially tough on drivers since your rate per mileage has such a direct impact on how much you can earn.

    If you’re experiencing low rate cuts, you may need to change up your strategy. Here are a few ideas to help:

    If you’re looking to supplement for a rate cut as a rideshare driver, consider looking into other services like Cargo and Freebird that can help you make up some of the difference.

    Play Octopus is another service that some drivers mentioned using. It helps drivers earn extra money by getting passengers to play games on a tablet in the car. This may be helpful to use during long trips as a courtesy to passengers.

    What Can I Expect From Using a Service Like Freebird?

    Freebird is another great way to supplement your rideshare income by referring your passengers. They have a few promotions but most recently, Harry saw that drivers can refer passengers who will get 2 free coupons to save on their next Uber and Lyft rides when they sign up so it’s pretty easy to promote.

    Another app you may want to use to help protect your cash flow is Upside which allows you to earn cash back for getting gas to fuel your car.

    I’ve Been Driving Around in the Chicago Suburbs For Almost Three Years and Have Put 93k Miles on My ‘17 Honda. Is It Worth It to Rent a Car Through Uber?

    Drivers tend to underestimate how many miles they’re putting on their car when they do rideshare. The more miles you drive, you should be calculating depreciation and potential expenses for your car.

    Uber has a car rental program called Fair, which gets you a car for $195/week. You really have to think about how good your car is on mileage along with how much you spend on maintenance and repairs over time.

    It might make sense to use Fair (especially if you’re a full-time driver) so you don’t have to worry about car depreciation. Check out our rideshare rental marketplace to compare Fair with other options.

    Interested in signing up with Fair? You have a few options:

    When Did Agreements With TNCs Change Such That Driver Pay Rates Were Lowered With Uber Upfront Pricing? How’d They ‘Get Away’ With No Longer Paying a Percentage?

    In the past, Uber would pay drivers 75% – 85% of the fair. Now, they pay drivers based on mileage and time. For the passenger’s fare, they quote an upfront price. How much a passenger pays for the trip doesn’t really relate to how much the driver is paid anymore.

    In some cases, this can leave drivers get upset (and rightfully so) when they see Uber take an enormous amount of the fare.

    Harry saw that Lyft is testing a feature on rides where they show how much you’ve made and how much of a cut they take.  We will definitely follow up with this.

    Will AB5 Affect The Tax Write Off in California?

    There’s still a big legal battle brewing, but if drivers become employees as a result of AB5, on the tax side, you’ll get reimbursed at the federal mileage reimbursement rate. For example, if you drive 20 miles in an hour as an employee, you’d deduct an additional $0.58 per mile, which would be  $11.60 per hour on top of your pay.

    However, you wouldn’t get to take the federal mileage deduction which is $0.58 per mile in 2019. You should be tracking your mileage on your own so you can deduct it at the end of the year. Stride is a great app you can use to track your mileage so you can be prepared when tax time comes.

    How Can Drivers Make it In LA?

    Driving in Los Angeles has its perks and drawbacks, but if you don’t feel like you’re earning enough regardless of your city, you may need to change your strategy around.

    Check out Sergio’s podcast episode to learn more about his surge-only driving strategy and how he’s able to make $20 – $30 per hour consistently with rideshare driving in L.A. Sergio knows the surge patterns in his area very well and uses the destination filter effectively.

    Are There Vehicle Caps in LA Or Any Other Cities Besides NYC?

    New York City is currently the only city with a vehicle cap. A lot of other cities and states are looking at other legislation.

    How Do The Food Delivery Apps Pay? Do They Tend to Pay Less Than Rideshare?

    Harry has always found that rideshare driving is more profitable. Food delivery is second tier. It often boils down to the fact that passengers are more willing to pay for a ride for themselves over their food.

    At the same time, driving for Uber and Lyft is not for everyone. If you start and find that it’s not for you and you’re putting too many miles on your car, delivery may be another option for you.


    Thoughts on the Caravan in NYC?

    As you’ve likely heard by now, NYC instituted a minimum rate pay for drivers and the TLC has revealed that drivers are making more per how. However, what Lyft has done (and Uber recently started doing) is restricting when drivers can go online.

    They don’t want drivers going online when it’s not busy and they can’t get rides, which does make sense. Still, it’s making some drivers upset because Uber and Lyft are still exerting more control and making it less flexible for drivers overall.

    There was a big caravan recently and close to 1,000 drivers who went on a bridge in NYC and protested. If you’re a savvy driver, you shouldn’t be going online when you can’t make any money anyway, but there are so many mixed opinions about these changes in NYC so we’d love to hear your thoughts.

    Don’t forget to join us on the next live Q and A and be sure to continue the conversation in the comments with your best rideshare driver strategies for your city and predictions for when AB5 will go into effect in California.

    Readers, do you have any questions for the next YouTube Live Q&A?

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    -Chonce @ RSG

    Chonce Maddox Rhea

    Chonce Maddox Rhea

    Choncé is a freelance writer who’s obsessed with living well on a budget and loves encouraging people to make extra money so they can meet their financial goals. She is happily married to one of the best Uber drivers in the Chicago metro area, who currently has 2,800+ trips under his belt.

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