Today, I’ve got a video for you about one of my biggest bones of contention with Uber: minimum fare rides. It’s an even bigger issue for me than tipping and other problems, so I hope you enjoy watching me get to the bottom of the actual profitability of minimum fare rides.
Watch the video below, and check out the transcript of the video on this page to see all of my biggest points at a glance.
How much Uber drivers actually make from a minimum fare in LA
If you’re a new driver, or even if you’re a passenger, you may not know how much drivers are actually earning from a minimum fare. On rides, in L.A., for example, a minimum fare ride is $4. Uber takes a dollar from that, so now you’re at $3, and then they take take 20%. So 20% of $3 is 60 cents, which leaves you with $2.40 on a minimum fare ride.
Obviously $2.40 isn’t a lot, but when you take the analysis a little bit further, the worst part about a minimum fare ride is that you often spend five to ten minutes waiting for a request. You then spend five to ten minutes driving to your passenger. You might spend a few minutes waiting for them to come down, especially if they’re an Uber passenger — You know how they always take a long time to come out! And finally, you might spend five to ten minutes driving.
One some minimum fares, you’re working 20 to 30 minutes for $2.40
Add all that up, and you could be working 20 to 30 minutes for $2.40. When you take into account the actual miles that you drove to get to the passenger and get them to their destination, you could very potentially be only breaking even, or in a worst case scenario, even losing money.
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Unfortunately, there’s not a whole lot you can do about minimum. They really are a part of the driving game, and I think it will be interesting to see going forward with these lawsuits against Uber, if we’re allowed to raise the minimum fare that we will accept, or have a little bit more flexibility or freedom to set our own rates.
Do you avoid minimum fares?
I’m curious to hear what you guys are doing to try and avoid these minimum fares. I can give you a couple examples from drivers that I’ve talked to and strategies that I’ve used myself. You want to do your best to within ethical limits to avoid minimum fares.
Now, I would never go so far as asking a passenger, “Hey, where are you going?” And they say, “Five blocks,” and me saying, “Get out of my car.” Although I might be thinking that, I probably wouldn’t ever do it. At the same time, from a business perspective, these minimum fare rides are really income killers. I know that a lot of drivers I’ve spoken with have found that on weekend nights between 10:00 p.m. and 1:00 a.m. in the bar areas, a lot of the rides are bar hops.
A trick to avoid minimum fares in bar areas
If you’re down by the bars, people who live in apartments nearby might just want to do a quick $4 minimum fare in your car. You could potentially be losing out on a lot of money by only taking that type of passenger.
A lot of drivers that I’ve talked to try to avoid those areas. If they do a drop-off in the bar areas, they’ll actually drop off the passenger, turn the app off, and then get out of that bar area, and let someone else tackle all those short little requests. As you guys know in really crowded areas, or when you’re going really short distances, you lose a lot of time trying to find your passenger, especially if they’ve been drinking. So That’s a strategy you guys want to think about as far as avoiding minimum fares in bar areas.
I practiced that technique a lot when I drove July 4th last year. I was trying to avoid shorter rides and I was really going for those longer surge rides.
I would drop off near the busy beach, and instead of getting someone right around there, who just wanted to bar hop or beach hop, I would actually drive 5 or 10 minutes in the other direction. Since the surge was so high, around 3X, it actually made a lot more sense for me to drive 10 or 15 minutes the other direction, pick someone up there, because I knew that they were going straight back to the beach. I was picking up out in the suburbs where there was no traffic, all I did was grab them, and then go drop them off. Then at the end of the night, it might make sense to go and hit the bar areas, because around 1:00 or 2:00 a.m., not a lot of people are going to be going from bar to bar, and they will likely be going further distances.
Hopefully this video helps you guys out with strategizing a little bit more on the minimum fare rides. And I’d also I love to hear from you in the comments to see what you guys are doing. Maybe we can get some good discussion going and see how we can help each other.
All right, take care guys. If you have any questions, definitely feel free to like, comment, subscribe on the video. Look forward to hearing from you.
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