UberPOOL and Lyft Line are Less Money for the Drivers

The companies claim that carrying more passengers means more money for the drivers. They are lying. They don’t pay the drivers more when they have more passengers. It is obvious when you do the math.

Let’s say you pick up 2 people at the airport, both requesting UberPOOL, and taking them to the same hotel. You now get paid at the UberPOOL mileage and minute rate that is 10% less than the UberX rate. And any overlapping miles, you get paid for once even though you have 2 paying passengers. Let’s do the math (using San Diego rates):

Uber gets: ((5 miles x $1.00/mile) + (10 minutes * $0.13/minute)) x 2 = $12.60

Driver gets: ((5 miles x $1.00/mile) + (10 minutes * $0.13/minute)) x 75% = $4.73

The driver gets 38% in this case and the company gets 62%. Why is it so bad? Because mileage is where drivers get a majority of their pay. So by reducing the mileage, drivers get less. The passenger pays 10% less and the company gets more. The only loser is the driver.

Let’s do the math on the same drive for UberX just to twist the knife a little:

Uber gets: ((5 miles x $1.10/mile) + (10 minutes * $0.15/minute)) x 2 = $16.00

Drivers get: ((5 miles x $1.10/mile) + (10 minutes * $0.15/minute)) x 2 x 75% = $12.00

For the UberPOOL ride, Uber pockets $12.60 – $4.73 = $7.87. For the UberX 2 separate rides, Uber pockets $16.00 – $12.00 = $4.00. They have figured out a way for the drivers to do more work and make less money while the company makes more money.

And in case you think I found the one case where this happens, let me assure you, this always happens. There is no case where it is better financially for the driver to take UberPOOL than UberX. Overall I have been calculating that I get about 40% of the money when driving for POOL. After doing the math it makes complete sense.

The math and the case is exactly the same for Lyft Line:

This does not say that you should not take UberPOOL or Lyft Line rides. Just realize that you are getting less per mile and less per minute no matter what they claim and they are getting more. A lot more. The above case shows how I was paid less for taking 2 people on Line than I would have been paid for 1 on regular Lyft.

So the passenger pays less, the company gets more, who is losing? That would be the driver. As in you.

Do I pick up POOL and Line passengers? If I am concerned about my acceptance rate, yes. If not, no. It is amazing how my rating almost always goes down on days I pick up POOL and Line passengers. A double whammy for sure.

Should you? That is your call. Now you know the math.

Drive smarter!

Explaining the Pay Confusion

There are things the companies say that have a lot of people confused. Smart people. Why? Because they use language to make things look better than they are.

What you get paid

The basic line from Uber and Lyft is that you get 75% of what they charge the passenger. That is not true. The┬ácompanies set a fixed price before the passenger agrees to get picked up. You get paid based on what you actually did. For instance, let’s say they billed the passenger for 5 miles and 10 minutes. But you know a shortcut that means you drop them off in 4 miles and 8 minutes. You get 75% of the fee that would be charged for what you actually did. They charge the passenger for the anticipated fixed fee. The company keeps the difference.

And UberPOOL and Lyft Line pay more like 40%. More on that soon.

Guarantee vs Bonus

Lyft uses guarantees a lot. An offer will go something like “Your ticket to $220. It’s a go, John. Drive knowing you’re getting a guaranteed $220 in two easy steps.” A guarantee is a minimum that you will earn if you meet their criterion. Subtract from the $220 all the money you earn and all the TIPS you earn as well. If those add up to more than the $220, you get nothing. And btw, you only get 75% of the $220, so really $165.

A bonus is on top of whatever else you earn. Drivers used to get a bonus for signing up after driving a certain number of rides. Now both Lyft and Uber tend to use guarantees instead of bonuses for new drivers

NOTE: Lyft specifically talks about earnings all the time and not your take home. Uber is better at talking about take home. Earnings is a fake number to fool your head. Even I, the math loving guy, get confused at times.