Why you should tip your Uber driver this holiday
Drivers average less than half of minimum wage
Uber and Lyft entered the Albuquerque market in May 2014 charging $1.60 a mile, half that of taxi rates. In October of 2015, they dropped that to 85 cents per mile.
There is no doubt; riders love the “deal” they are getting.
In May of 2016, Uber finally was operating legally and insured in New Mexico, so I tried driving for them. I quit after a year. Here is why:
Uber and Lyft pay their drivers 63 cents a mile plus HALF the minimum wage. There is also a flat 75 cents per trip. If loaded with paying riders 62 percent of total miles, the pay is more like 35 cents a mile plus one-fourth the minimum wage. But there’s more! I kept a detailed spreadsheet so all costs could be averaged out monthly over a year. Here they are:
69 hours per month driving — equivalent to one week of taxi shifts
$1,153 Uber payments to driver — $16.71 an hour gross income. Tips are about 5 percent; only one in 20 riders tip
1,810 miles — adjusted from 2,110 miles, 85.30 percent were commercial use
$288.96 gas — commercial miles only
$144.16 Geico GAP insurance for rideshare
That first $2.95 Uber collects off the top is for commercial insurance, in this case $485 for insurance from gross fares plus GAP insurance, totaling $629 a month for commercial insurance. That’s more than a 24/7 taxi. A full-time Uber driver will collect double this, or more depending on number of trips!
$127.70 mileage depreciation at 7 cents a mile, based on Kelly Blue Book values $50 for brakes $50 for oil $50 for tires NET INCOME: $447.42 a month, $6.48 an hour
2017 1040C ADJUSTED INCOME at 53.5 cents a mile: $175.68, or $2.56 an hour
So, should you tip your Uber driver? If you don’t they are only making about half the minimum wage.
And so are taxi rates a “rip-off,” as so many claim? In order for Uber drivers to make a living wage of $15 to $20 per hour, Uber will have to triple its rates; which is, coincidentally, the same as what taxis charge! And taxi companies do not set those rates; state forensic accountants do.
New Mexico Motor Carrier Act 65-2A-21 E (states) “The rules adopted by the commission to implement this section shall allow a carrier to achieve revenue levels that will provide a flow of net income, plus depreciation, adequate to support prudent capital outlays, ensure the repayment of a reasonable level of debt, permit the raising of needed equity capital and attract and retain capital in amounts.”
In 2016 the N.M. Legislature passed the Transportation Network Services Act, legalizing Lyft and Uber, codified in the Motor Carrier Act, Chapter 65, NMAC. The act describes the TNC business model as a “passenger service” using sedans, SUVs and luxury cars. Taxis and limos also carry passengers for hire, same as Lyft and Uber . ... However, the rules and regulations for Lyft and Uber are vastly different than for taxis and limos.
Having two passenger services in direct competition but under unequal law is unconstitutional. In 1886, the U.S. Supreme Court held that companies are protected by the “equal protection clause,” the same as people. That holding is still in force today.