Lyft, Uber Alles
As a serial entrepreneur and Coach Approach Strategic Adviser, I am fascinated by the 'Gig' economy. Sites like Fiverr and Upwork allow anyone to be a entrepreneur! Pretty awesome...
A few years ago my eldest son asked if if he could drive for Uber while he was away at college. I did some research and returned a verdict - No. My reasoning was simple. At that time, the prevailing policy at Uber was if you had accident while ride sharing - 'Don't Ask, Don't Tell'. I found it astonishing that a company could base their business model on something so dubious.
Two years ago, in fact, when I had a tiny fender bender, the FIRST WORDS out of the Geico agent's mouth were 'were you ride sharing'? No was my reply and I immediately decided, after 26 years, to find a new insurance provider. Which I did and saved myself $2500!
The insurance situation has improved albeit it is still far from perfect. There are some gaps but at least the insurance companies have a better handle. In fact my new insurer, Allstate, is about to launch a product. So, with that in mind, I decided to take the plunge - I am now an Uber (and Lyft) driver. Yippie!
The sign up process for both is astonishingly easy - I suspect TOO easy. Upload some docs. Sign off on some legalese. Download an app. 24 hours later, I was on the road.
Saturday was my first foray. My ride of choice is a 2015 BMW X4. I started by getting the car washed naturally! I also decided I would drive during daylight so as to get my feet wet. Saturday was a bright but chilly day here in NJ. I fired up the Uber app and in a few minutes, I had my first ride!
I did three rides total over two hours in my initial traunch. Two people were on their way to work and did not own a car. Sandwiched in between was a father who's car was in the shop heading to meet his wife at a kid's soccer game.
The BMW has a very handy trip computer so I could easily track the vehicular KPI's. I drove 28 miles over 1:42 hours averaging 19.4 MPG. Thus, I burned $3.40 of fuel. Of that, 9.1 was trip miles, the rest was cruising and eventually heading home. I did stop for coffee...
We'll add to that the $57.5 per mile (US Government wear and tear rate) yielding $16.10. The total Cost of Goods Sold (COGS) is thus $19.50. For now, I will exclude the opportunity cost of my time.
Uber's payout - $13.74. Small sample size but basically, I paid people to take them to work!
After a afternoon respite, I turned my attention to Lyft. Conventional wisdom is that Uber has the market share - more users, more drivers - while Lyft is cheaper and pays drivers better. May or may not be true depending on which blog your read.
I started at 4pm and took a few minutes to get my first ride - again, an adorable young woman on her way to work. She congratulated me on my first ride! When I asked her why Left, she said they're cheaper. Next was a group of four beautiful young ladies on their way to a wedding at a country club. They shared that they had waited 30 minutes for an Uber driver who kept getting lost.
As I dropped them, another ride came in. This one, again, a charming single woman heading home from work. This would be my first reasonably long drive - Jersey City into Saturday night traffic. Fortunately, it wasn't bad and we had a very nice chat.
Now I was faced with a conundrum. Do I take a ride or head back home some 15 miles West? As I waited, parked, a ride came in but I declined. Lyft's app admonished me to go offline if I'm going to decline rides. Sufficiently chastened, I headed back home empty.
As I passed Newark airport, I thought about how inefficient this part of the process was - long ride, no passengers. For a moment I thought of trying to catch an EWR fare but demurred when I considered that they might be headed to Manhattan where's I'd hit REAL traffic. Besides, I don't know what the rules are in terms of ride sharing in NYC. Do I need a TLC license? Not sure, so save it for another day.
In case I buried the lead, as a driver you are blissfully unaware of the destination until you accept the ride. So, in theory I could end up in LA! Perhaps not but nothing's to stop people from diverting me to a far destination - like Long Island - as I would soon discover.
There's a reason GREED is a deadly sin. When I exited the highway a few miles from home I thought, ' heck, go back online and see if you can get one last ride'. I did and I did when I was about 2 minutes from home.
I picked up a lovely couple heading to - BROOKLYN! Tatiana to be exact, a Russian nightclub in Brighton Beach! Two of the worst hangovers I have ever had were courtesy of Miss Tatiana and her vodka that flows like water. But I digress...
The app said 50 minutes but I was skeptical. It's Saturday night! But off we went. 78 East, NJ Turnpike, Goethals Bridge to Staten Island, the worlds biggest parking lot. Lucky break - we could use the HOV lane (3+ passengers). Verranzano Bridge to Belt Parkway. And guess what? Took us 51 minutes! The ride sharing God's were smiling on the rookie...
At this point, I was done. I went offline and headed back home. But then another question arose that I had failed to consider. Tolls? The Verrazano only collects heading west - crossing to Brooklyn is 'free'. It's $15 to go back to NJ (technically $12.50 with EZPASS)! Did the client get charged for that? Dunno and frankly I wasn't sure now was the time to figure it out.
So, I did what every smart New Yorker would do - I improvised. For full disclosure I lived in New York for 30 years. I have driven thousands of miles in the city so it was no biggie to get home bypassing the tolls. Don't even need GPS. Belt to Gowanus to Brooklyn Bridge, Park Row, cross over to Hudson St., Holland Tunnel to the Pulaski Skyway. A bit longer as the crow flies but $0 in tolls.
So, now for the damage. Drive time 4:51 HOURS, 131 miles at 23 MPG (Better!). $13.44 in gas. $75.33 in wear and tear for a grand total of $88.77. Add $21.45 for tolls equals $110.22. Total Lyft payout - $98.91! So, again, it cost me money to drive and I couldn't even stop to have a drink!
Note: Appears my COGS would be higher still if I hadn't bypassed the bridge toll heading home as the client was NOT charged for my return trip. Also, EZPASS charged me only $15.60. I'm not sure why there's a discrepancy but at least it is in my favor.
So what's the moral of the story? To be fair, I think it's too soon to tell. Frankly, I need more data. I also need to do more research to see what rookie mistakes I can avoid to optimize. But at first blush, it seems like a lot of work for very little - even negative - money.
But, I did meet some very nice folks. Everyone engaged in conversation, for the most part, without prompting. People were kind and courteous - I even got $6 in tips from Lyft passengers! Thank you all!
I'll report back again once I have a few more rides under my belt and perhaps some SURGE rides.
To be continued...
A few years ago my eldest son asked if if he could drive for Uber while he was away at college. I did some research and returned a verdict - No. My reasoning was simple. At that time, the prevailing policy at Uber was if you had accident while ride sharing - 'Don't Ask, Don't Tell'. I found it astonishing that a company could base their business model on something so dubious.
Two years ago, in fact, when I had a tiny fender bender, the FIRST WORDS out of the Geico agent's mouth were 'were you ride sharing'? No was my reply and I immediately decided, after 26 years, to find a new insurance provider. Which I did and saved myself $2500!
The insurance situation has improved albeit it is still far from perfect. There are some gaps but at least the insurance companies have a better handle. In fact my new insurer, Allstate, is about to launch a product. So, with that in mind, I decided to take the plunge - I am now an Uber (and Lyft) driver. Yippie!
The sign up process for both is astonishingly easy - I suspect TOO easy. Upload some docs. Sign off on some legalese. Download an app. 24 hours later, I was on the road.
Saturday was my first foray. My ride of choice is a 2015 BMW X4. I started by getting the car washed naturally! I also decided I would drive during daylight so as to get my feet wet. Saturday was a bright but chilly day here in NJ. I fired up the Uber app and in a few minutes, I had my first ride!
I did three rides total over two hours in my initial traunch. Two people were on their way to work and did not own a car. Sandwiched in between was a father who's car was in the shop heading to meet his wife at a kid's soccer game.
The BMW has a very handy trip computer so I could easily track the vehicular KPI's. I drove 28 miles over 1:42 hours averaging 19.4 MPG. Thus, I burned $3.40 of fuel. Of that, 9.1 was trip miles, the rest was cruising and eventually heading home. I did stop for coffee...
We'll add to that the $57.5 per mile (US Government wear and tear rate) yielding $16.10. The total Cost of Goods Sold (COGS) is thus $19.50. For now, I will exclude the opportunity cost of my time.
Uber's payout - $13.74. Small sample size but basically, I paid people to take them to work!
After a afternoon respite, I turned my attention to Lyft. Conventional wisdom is that Uber has the market share - more users, more drivers - while Lyft is cheaper and pays drivers better. May or may not be true depending on which blog your read.
I started at 4pm and took a few minutes to get my first ride - again, an adorable young woman on her way to work. She congratulated me on my first ride! When I asked her why Left, she said they're cheaper. Next was a group of four beautiful young ladies on their way to a wedding at a country club. They shared that they had waited 30 minutes for an Uber driver who kept getting lost.
As I dropped them, another ride came in. This one, again, a charming single woman heading home from work. This would be my first reasonably long drive - Jersey City into Saturday night traffic. Fortunately, it wasn't bad and we had a very nice chat.
Now I was faced with a conundrum. Do I take a ride or head back home some 15 miles West? As I waited, parked, a ride came in but I declined. Lyft's app admonished me to go offline if I'm going to decline rides. Sufficiently chastened, I headed back home empty.
As I passed Newark airport, I thought about how inefficient this part of the process was - long ride, no passengers. For a moment I thought of trying to catch an EWR fare but demurred when I considered that they might be headed to Manhattan where's I'd hit REAL traffic. Besides, I don't know what the rules are in terms of ride sharing in NYC. Do I need a TLC license? Not sure, so save it for another day.
In case I buried the lead, as a driver you are blissfully unaware of the destination until you accept the ride. So, in theory I could end up in LA! Perhaps not but nothing's to stop people from diverting me to a far destination - like Long Island - as I would soon discover.
There's a reason GREED is a deadly sin. When I exited the highway a few miles from home I thought, ' heck, go back online and see if you can get one last ride'. I did and I did when I was about 2 minutes from home.
I picked up a lovely couple heading to - BROOKLYN! Tatiana to be exact, a Russian nightclub in Brighton Beach! Two of the worst hangovers I have ever had were courtesy of Miss Tatiana and her vodka that flows like water. But I digress...
The app said 50 minutes but I was skeptical. It's Saturday night! But off we went. 78 East, NJ Turnpike, Goethals Bridge to Staten Island, the worlds biggest parking lot. Lucky break - we could use the HOV lane (3+ passengers). Verranzano Bridge to Belt Parkway. And guess what? Took us 51 minutes! The ride sharing God's were smiling on the rookie...
At this point, I was done. I went offline and headed back home. But then another question arose that I had failed to consider. Tolls? The Verrazano only collects heading west - crossing to Brooklyn is 'free'. It's $15 to go back to NJ (technically $12.50 with EZPASS)! Did the client get charged for that? Dunno and frankly I wasn't sure now was the time to figure it out.
So, I did what every smart New Yorker would do - I improvised. For full disclosure I lived in New York for 30 years. I have driven thousands of miles in the city so it was no biggie to get home bypassing the tolls. Don't even need GPS. Belt to Gowanus to Brooklyn Bridge, Park Row, cross over to Hudson St., Holland Tunnel to the Pulaski Skyway. A bit longer as the crow flies but $0 in tolls.
So, now for the damage. Drive time 4:51 HOURS, 131 miles at 23 MPG (Better!). $13.44 in gas. $75.33 in wear and tear for a grand total of $88.77. Add $21.45 for tolls equals $110.22. Total Lyft payout - $98.91! So, again, it cost me money to drive and I couldn't even stop to have a drink!
Note: Appears my COGS would be higher still if I hadn't bypassed the bridge toll heading home as the client was NOT charged for my return trip. Also, EZPASS charged me only $15.60. I'm not sure why there's a discrepancy but at least it is in my favor.
So what's the moral of the story? To be fair, I think it's too soon to tell. Frankly, I need more data. I also need to do more research to see what rookie mistakes I can avoid to optimize. But at first blush, it seems like a lot of work for very little - even negative - money.
But, I did meet some very nice folks. Everyone engaged in conversation, for the most part, without prompting. People were kind and courteous - I even got $6 in tips from Lyft passengers! Thank you all!
I'll report back again once I have a few more rides under my belt and perhaps some SURGE rides.
To be continued...
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