Thinking of drving for Uber, Lyft or GrubHub?

Might want to read this first:

https://www.thedenverchannel.com/new...08Kl11GHSmxzyQ

It must be the lawyer in me but I remember when I first heard about these services the FIRST thing I thought of was "how do they deal with insurance?" because I KNEW that most private auto insurance policies specifically EXCLUDE using the vehicle for "commercial" purposes unless that is put into the policy (and it almost never is for regular car insurance.)

Now my understanding (corrections welcomed) is that Uber and Lyft actually do insure their drivers for liability - while they are actively driving for the service. I wonder, though, do they also insure for damage to the vehicle? Or is the driver on his own dime for that?

I'm actually surprised that the likes of Uber and Lyft are still around. Maybe people just aren't doing the math but by the time you pay for gas, oil, maintenance and depreciation on their vehicles, I'll bet most Uber and Lyft drivers are barely earning minimum wage, if that (and consider that all that time spent washing, waxing, vacuuming the inside of the vehicle are de-facto 'requirements' of the job which should also be accounted for when figuring earnings. I mean, think about it, if you were an employee of a taxi company, they wouldn't expect you to clean the inside of your taxi on your own time, would they?)

Then there's the whole "self employment" hassle of having to withhold your own taxes, pay additional self employment tax, etc.

It appears that GrubHub does not insure drivers for anything, and I think that may be a problem for GrubHub. In the case above, the GrubHub driver was at fault in the accident, and her insurance company is declining to cover the accident because she was engaged in business, which is specifically excluded from her insurance coverage. But if the driver doesn't have assets to cover the loss, I could see the other driver coming after GrubHub for the damages. And I think GrubHub would have to pay up.

It's the same with pizza delivery as well. In the past, insurance would just cover you, then non-renew your policy. More and more insurance companies are trying to be more strict about stuff like this and not covering at all due to breach of contract. It's the same story with being an independent contractor and being insured for one thing, but actually doing other things. Always a cat and mouse game.

This reminds me of "predatory" lending schemes. Bruh, you're buying the single most expensive item you'll ever purchase in your life, and you're saying you didn't read the shit?

Anytime someone puts a stack of paper in front of you, fuckin' read it or walk.

The gig economy shit only works out if you're an efficient and diligent person. Otherwise, you're subsidizing the costs.

The car/insurance concept I really find nuts is Turo.

Quote:

---

Originally Posted by Not_A_Llama

Otherwise, you're subsidizing the costs.

---

Bingo. Seems to me that it's almost like a pyramid scheme in the sense that it's only going to last as long as there is an constant supply of ignorant people at the bottom who are willing to bear all the costs so the people on top can make the money.

You would think (I would certainly LIKE to think) that just like "Nigerian Prince scams", that sooner or later Uber, Lyft and Grubhub are going to run out of gullible people to do their work.

At that point they either have to pay a truly fair compensation rate - which would cause the price of their service to skyrocket - or close down their operations. Either that or convert to a taxi service with their drivers as employees vs. "independent contractors."

It just doesn't seem sustainable as it is.

Now I have to confess, I've never taken an Uber or Lyft so I don't know, but how do their costs compare to a taxi service? Are they roughly comparable or are they notably less?

Quote:

---

Originally Posted by Martinjmpr

Now I have to confess, I've never taken an Uber or Lyft so I don't know, but how do their costs compare to a taxi service? Are they roughly comparable or are they notably less?

---

I don't recall having ever taken a taxi, but I've used Uber a handful of times, and it seems quite reasonable to me, never paid more than $10 for the ride, and then whatever I tipped the driver (always received good drivers). My rides were never more than a few miles and were only because both the wife and I were partaking in libations.


Sent from my iPhone using Tapatalk

Quote:

---

Originally Posted by Martinjmpr

Bingo. Seems to me that it's almost like a pyramid scheme in the sense that it's only going to last as long as there is an constant supply of ignorant people at the bottom who are willing to bear all the costs so the people on top can make the money.

You would think (I would certainly LIKE to think) that just like "Nigerian Prince scams", that sooner or later Uber, Lyft and Grubhub are going to run out of gullible people to do their work.

At that point they either have to pay a truly fair compensation rate - which would cause the price of their service to skyrocket - or close down their operations. Either that or convert to a taxi service with their drivers as employees vs. "independent contractors."

It just doesn't seem sustainable as it is.

Now I have to confess, I've never taken an Uber or Lyft so I don't know, but how do their costs compare to a taxi service? Are they roughly comparable or are they notably less?

---

Every type of independent contractor type of gig is exactly like this with respect to insurance. Hire independent contractors and they are responsible for providing their own workers comp and GL. What you said about a pyramid scheme is correct, but I don't see it ending any time soon. There will always be new blood entering the work force, and you can still make good money as the independent guy.

Quote:

---

Originally Posted by Irving

Every type of independent contractor type of gig is exactly like this with respect to insurance. Hire independent contractors and they are responsible for providing their own workers comp and GL.

---

I agree but the difference is that Joe Schmoe who wants to open an independent contracting business already knows that, and will adjust his prices to account for all of that to include equipment depreciation, insurance, etc.

Sally Smith who just wants to make a few bucks while her kids are at school (Which is EXACTLY who Uber advertises to on their commercials) - does SHE know that? I seriously doubt it.

Furthermore, if I understand correctly, rates are set by Uber, not by the driver. IOW the Uber/Lyft driver gets paid a set amount based on whatever demand is at that time.

He/she doesn't have the option of saying "I'll charge you this much to drive, plus this much surcharge to cover my insurance, plus this much to cover my depreciation, etc."

As an Uber/Lyft driver you have two options when a ride comes up: 1. take it (at whatever the going rate is) or 2. Leave it.

Quote:

---

What you said about a pyramid scheme is correct, but I don't see it ending any time soon. There will always be new blood entering the work force, and you can still make good money as the independent guy.

---

I wonder how many Uber or Lyft drivers are actually making 'good money' by the time you factor in (a) fuel, oil, tires, and maintenance (b) depreciation on their vehicle (c) the time and effort they have to put in to keep the vehicle presentable (which is non-compensated) and (d) their actual earnings after subtracting self-employment tax, FICO, Medicare, etc. (not to mention the time to do all that paperwork - which is also uncompensated.)

As I said above, a building contractor, plumber, electrician, etc can adjust his rates to account for all those costs but AFAIK an Uber, Lyft or Grubhub driver doesn't have that option.

I think it's pretty well known that livery drivers working for these companies are making good money. I can't set prices for any of the contract labor I do, but what I do pays more than Lyft/Uber for sure. I have a buddy that does Doordash when he gets deployed to an area and things are slow. He says he just works a couple hours at night (3-4) until he makes about $100 and calls it quits. $100 in 3-4 hours isn't great by any means, but if you're on the road already and don't have anything better to do than sit in a motel room, it go out and spend money on entertainment, it seems like a viable option. I'm considering checking that out this winter myself actually.

You just have to be strategic about what you partake in.

If you run it like a fulltime job and are plugged-in, running an import vehicle or have a long-term rental contract, you'll do fine - plenty of dudes are making a good living and Uber even pays for online college. If you're doing a few strategic hours around bar hours in an urban area with a personal vehicle, you'll probably do fine.

Someone hopping in and aimlessly driving a time or two a month because they saw an ad or heard about it from Karen is probably not making money.

It's not any different from hotshot trucking when operators get lazy about finding backhauls, and we consider those people to be plugged-in and informed.

I'm reminded of a guy I worked with who owned a newish Jeep, and anxiously volunteered at every opportunity to drive to a company site in an other state, instead of taking a flight. He was after the mileage reimbursement, which he explained to me was "free money". Then his transmission grenaded to the tune of multiple thousands of dollars in the middle of nowhere and he (of course) could not afford it. The lower classes oppress themselves. Whether you feel like legislation is the fix to "protect" them is kind of the key determinant on a person's political leanings these days.

Yeah, I don?t think these services were ever intended to be full time jobs. I think the spirit of the service was to allow people who likely already had real jobs to supplement their income but giving rides in their spare time.

Quote:

---

Originally Posted by ray1970

Yeah, I don?t think these services were ever intended to be full time jobs. I think the spirit of the service was to allow people who likely already had real jobs to supplement their income but giving rides in their spare time.

---

Sorta disagree - if you used uber in the early days, it was *only* for limo service guys that had dead time between fares. It was basically Uber Black/ Uber XL all the time. You'd pay a touch more than you would for a taxi, but get limo service. Great for when I was going to the airport on the company dime, or sending home a drunk client. Cold water bottles were key.

Today, if I'm getting a ride during the day, most of the uber drivers I get are ex-cab drivers who do uber fulltime as a job. At night, entertaining clients, it's a grabbag.

The folks I *really* feel bad for are the amazon flex drivers. Especially with the traffic we have around town now.

Quote:

---

Originally Posted by Not_A_Llama

Sorta disagree - if you used uber in the early days, it was *only* for limo service guys that had dead time between fares. It was basically Uber Black/ Uber XL all the time. You'd pay a touch more than you would for a taxi, but get limo service. Great for when I was going to the airport on the company dime, or sending home a drunk client. Cold water bottles were key.

---

OK, that makes perfect sense since, in that circumstance, the costs of fuel and depreciation are already factored in and Uber just becomes another "client."

Quote:

---

Today, if I'm getting a ride during the day, most of the uber drivers I get are ex-cab drivers who do uber fulltime as a job. At night, entertaining clients, it's a grabbag.

---

So do Uber and Lyft pay MORE than what an "average" taxi driver would make if he was working for a taxi company? You would think they would have to in order to account for the additional costs that an Uber/Lyft driver has to absorb (whereas if he was driving for the Checker Cab co., the company would own the vehicle and pay for fuel, maintenance, depreciation, etc. which would result in lower net wages for the employee.)

Also how does insurance work? I know Uber/Lyft cover the driver's liability (they'd pretty much have to) but what about collision/comprehensive? If you get into a wreck while Ubering does Uber cover the cost of repairs?

Traditionally, most taxi drivers rented their cars from the company. It was a pretty high hurdle to meet, and things were pretty dire for a long time. In other cities, there's a medallion system that's even more onerous. The situation was bad enough here to catalyze the east Africans into starting their own companies, which is why Metro and Yellow are pretty hard to see around town these days.

Uber takes are of everything but the deductible while you're on their clock: https://www.uber.com/us/en/drive/insurance/

Cab companies are notorious for being shitty with respect to shoving all of vehicle maintenance and ownership costs onto the drivers, so can drivers aren't making any money either.

The real issue with livery (driving around people) is the elevated risk of injury of the passengers. I'm surprised the GrubHub lady's insurance didn't pay her claim since she was just driving around food, compared to people.

Since liability and comp/collision are separate, if the parent company pays anything, it's likely just liability at whatever the minimum is required by the state and/or PUC.

I have taken Uber a few times and its interesting to hear the drivers take on their "Side Gig". Most of them are new to offering the service and are excited about making some extra money in their free time. I doubt that many of them proactively assess the long term expenses or liability of doing that stuff to make an educated decision on doing it. They only see the short term potential to make some extra cash while ignoring the reality of what the long term risk or cost will be. Kind of like how people these days make decisions about pretty much everything else. Why worry about tomorrow when you can get instant gratification today???

Some lessons can only be learned the hard way...........

It would be interesting hear from some actual Uber/Lyft drivers. I've had a handful of poker dealers go part time because they make more driving than dealing, and dealers are making $25+ per hour between minimum wage and tips.

As someone who has been a delivery driver, and now puts a ton of miles a year on my vehicle, I can say that additional repair costs for usage are way over blown in my opinion. To the point that they aren't even a consideration.

Do you take into consideration the replacement of vehicle?

It will wear out eventually.

Quote:

---

Originally Posted by Irving

As someone who has been a delivery driver, and now puts a ton of miles a year on my vehicle, I can say that additional repair costs for usage are way over blown in my opinion. To the point that they aren't even a consideration.

---

Quote:

---

Originally Posted by buffalobo

Do you take into consideration the replacement of vehicle?

It will wear out eventually.

---

See, that's kind of what I'm thinking. It seems like the foundation of the whole Uber/Lyft business model is the assumption that modern vehicles are so reliable and can go so long between major repairs.

Even if you had the Intertoobz in the 1970's, for instance, an Uber would never have worked because maintenance and repair costs on the vehicles of those days were enormous. Probably not a lot of people remember when cars had 5 digit odometers and when keeping a vehicle over 100,000 miles was a big deal.

Nowadays 100,000 miles is nothing. There are Toyota 4runners out there with 150k on them and people are offering them up for $12k or more. A Honda or Toyota can likely go 200k before it needs a major repair and as long as the Uber driver is OK with the diminished value that the high miles brings, it's likely that a major repair won't be needed.

I see many Uber and Lyft vehicles here in Boulder using rental cars with fleet plates. If you do it full-time, that might be the best way to minimize any unforeseen costs.

My Caravan has 240,000 miles on it with no major repairs, in my opinion. I've certainly been quoted some several hundred dollar repairs, only to find I can do it myself for under $100. I suppose if you never work on your car it could be more. I don't think I'm a good example of the average person though. I have three old vehicles that are paid off so I can usually take my time fixing them. Which is also why I favor delivering food instead of people, no one cares what your vehicle looks like. Also the people part.

Also, I treat vehicles as depreciating liabilities (not really assets), with the intention of driving them until they don't drive anymore. I think it's insane to own a vehicle used as a daily driver and care about door dings or hail damage; but I also recognize that most people aren't like that. For me, resale value has never even been a consideration on a vehicle for me, so again I'm a poor example. Anyone using their vehicle for work, and thinking that they will keep it nice and maintain resale probably isn't thinking very hard about what they're doing though.

Quote:

---

Originally Posted by GilpinGuy

It would be interesting hear from some actual Uber/Lyft drivers. I've had a handful of poker dealers go part time because they make more driving than dealing, and dealers are making $25+ per hour between minimum wage and tips.

---

I'm guessing that's because a lot of people are idiots and don't understand expenses, all they see is the money they're bringing in. Factor in all the vehicle expenses and self employment taxes most drivers don't make much at all. It's like a minimum wage job that you can set your own hours. As a part time gig you can make decent money if you are very selective about where and when you work, weekend bar close, major events, etc.
Almost every driver I have had lately drives for both Uber and Lyft along with one of the food delivery services.
I have had a few that are older retired folks that do it just to stay busy and get out of the house.

I used Lyft a bit in Seattle recently and all of my drivers were of foreign descent. Most of them had names with lots of consonants and very few vowels and spoke very poor English.

I will say that most of the Uber and Lyft rides I have taken were pretty uneventful. I can't say the same about the cab rides in Las Vegas.

Irving, does your personal insurance cover you while you are doing deliveries or do you have to pay for additional insurance?

That's what I was saying about in the past they would cover you, then drop you. Now it seems like some companies will say you lied on your application and deny the claim. Not all companies are the same, and NONE of them would tell you that they'd actually cover you. There is a lot of nuance in that situation.

Quote:

---

Originally Posted by ray1970

I used Lyft a bit in Seattle recently and all of my drivers were of foreign descent. Most of them had names with lots of consonants and very few vowels and spoke very poor English.

I will say that most of the Uber and Lyft rides I have taken were pretty uneventful. I can't say the same about the cab rides in Las Vegas.

---

King county uber and Lyft driver talk was another factor that I would not live there. They were explaining homeless issues (as we have a thread about this while back) on i5 while going to sea-tac.

The grub hub or Uber eats drivers are busy tonight. Saw a splattering of them at Noodles and Company.

Quote:

---

Originally Posted by mpatch

I'm guessing that's because a lot of people are idiots and don't understand expenses, all they see is the money they're bringing in. Factor in all the vehicle expenses and self employment taxes most drivers don't make much at all. It's like a minimum wage job that you can set your own hours.

---

See, this is what I was thinking too. If you only look at how much is going into your bank account from driving, you aren't looking at the whole picture. It costs money to drive for Uber or Lyft. The money you "make" isn't what gets deposited into your account. It's what gets deposited into your account MINUS your fuel, maintenance, self employment tax, the bottled water you buy for customers, and if you are accounting honestly, the time you spend cleaning, vacuuming, waxing and washing your car to make it appealing to riders and doing the paperwork like your taxes.