Changing of the Guard
After months of Sturm and Drang, Travis Kalanik finally succumbed to the pressure the board (and the public, I presume) applied and resigned as CEO of Uber. I am sure there was a collective sigh of relief from all involved.
Sadly, Mr. K suffered an unimaginable loss in the passing of his mother in a tragic boating accident. Irrespective of any business issues, my hope is he can use the time out of the limelight to grieve. I wish him well.
Since my last missive, I had one occasion to use Uber and it was oddly familiar - my car was in the shop. Not the X4 I used for my Uber/Lyft experiment but a little convertible. Seems it rolled down the hill in front of my house and smashed into the neighbor's house (and car). $13k in damage to my vehicle. Plus $13k to his house and car.
At first blush, it appears I forgot to set the brake! Upon further review, it would have been impossible to do so without running myself over! So, it appears someone may have tampered with it. Regardless, lesson learned - don't leave the car on the street with the top down EVEN in front of the house.
The shop that had my car for over a month was some 25 miles away. I took advantage of Allstate's 'authorized' shop network - this was the closest one even in densely populated NJ. They even sent a wrecker as a courtesy as the vehicle was undrivable.
When it finally emerged, bright, shiny and honestly good as new, I hailed an Uber to make the trek. And had an interesting conversation with the driver. I'm not going to use her real name for reasons that will become obvious. We'll call her Nancy.
Nancy has been driving for several months. She drove a well-used vehicle of Asian descent. Turns out, she leases said vehicle from Uber. The cost - $300 per week, all in.
As a Coach, I ask a LOT of questions. How much did she drive in an average week? 70 hours, 10 hours, 6 days a week. What are her gross revs? Around $1000. How did she spend in gas and tolls? I don't know, she said.
I did some rough math for her in the car and the result wasn't pretty. Now that I have a computer at my disposal, I was able to do a better guestimate. Assuming an average travel speed of 25 MPH - taking into account stoppage (0 MPH) and highway (60 MPH) - current gas prices and the efficiency of her vehicle, her gas cost calculates to $140. Add an estimated $60 for tolls leaves a take home of $800.
Thus, her hourly rate is $11.42. Very similar to what I came up with assuming no wear and tear to my X4. But wait! We must subtract $300 for the lease! Thus the actual take home is $500 or $7.14 per hour. The US minimum wage is $7.25!
So, it's a $24k yearly wage. But it gets better! That's GROSS. Nancy was driving under her social so she will get a 1099. So will the Gov't. Having just done this exercise with my eldest son, assuming similar deductions, she's looking at a minimum $5k tax bill!
Even more worrisome and the reason for the name change is she is currently on DISABILITY! So, should she be discovered to be working, she would put THAT in jeopardy. I didn't have the heart to ask what the disability was for or how much. But it was clear she knew that driving for pay might render her ineligible for said payments.
She asked me if she should incorporate. Specifically as a means to shield herself like a Russian oligarch buying a $100 million apartment. I advised that it is generally prudent to use a corporation to insulate yourself from LIABILITY. It may not shield her from any negative consequence with regard to potential complications with her disability coverage but best that she consult an attorney.
At this point, the horse is already out of the barn. Uber will issue a 1099 so there is a clear record of earnings. Like Mr. K, I wish her well...
Finally, when I related all this to an entrepreneur friend and shared that the whole idea of working so many hours at such high risk for so little money, he shrugged. For large swaths of our populous, he said, this is the best they can do. I have to admit, I was taken aback. Not so much by what he said but by the realization that I live in a fishbowl! Gobsmacked is more like it...
Is that as good as it gets for many people on the lower socio-economic rung? Am I THAT naive?
Guess it's time to find out...
Sadly, Mr. K suffered an unimaginable loss in the passing of his mother in a tragic boating accident. Irrespective of any business issues, my hope is he can use the time out of the limelight to grieve. I wish him well.
Since my last missive, I had one occasion to use Uber and it was oddly familiar - my car was in the shop. Not the X4 I used for my Uber/Lyft experiment but a little convertible. Seems it rolled down the hill in front of my house and smashed into the neighbor's house (and car). $13k in damage to my vehicle. Plus $13k to his house and car.
At first blush, it appears I forgot to set the brake! Upon further review, it would have been impossible to do so without running myself over! So, it appears someone may have tampered with it. Regardless, lesson learned - don't leave the car on the street with the top down EVEN in front of the house.
The shop that had my car for over a month was some 25 miles away. I took advantage of Allstate's 'authorized' shop network - this was the closest one even in densely populated NJ. They even sent a wrecker as a courtesy as the vehicle was undrivable.
When it finally emerged, bright, shiny and honestly good as new, I hailed an Uber to make the trek. And had an interesting conversation with the driver. I'm not going to use her real name for reasons that will become obvious. We'll call her Nancy.
Nancy has been driving for several months. She drove a well-used vehicle of Asian descent. Turns out, she leases said vehicle from Uber. The cost - $300 per week, all in.
As a Coach, I ask a LOT of questions. How much did she drive in an average week? 70 hours, 10 hours, 6 days a week. What are her gross revs? Around $1000. How did she spend in gas and tolls? I don't know, she said.
I did some rough math for her in the car and the result wasn't pretty. Now that I have a computer at my disposal, I was able to do a better guestimate. Assuming an average travel speed of 25 MPH - taking into account stoppage (0 MPH) and highway (60 MPH) - current gas prices and the efficiency of her vehicle, her gas cost calculates to $140. Add an estimated $60 for tolls leaves a take home of $800.
Thus, her hourly rate is $11.42. Very similar to what I came up with assuming no wear and tear to my X4. But wait! We must subtract $300 for the lease! Thus the actual take home is $500 or $7.14 per hour. The US minimum wage is $7.25!
So, it's a $24k yearly wage. But it gets better! That's GROSS. Nancy was driving under her social so she will get a 1099. So will the Gov't. Having just done this exercise with my eldest son, assuming similar deductions, she's looking at a minimum $5k tax bill!
Even more worrisome and the reason for the name change is she is currently on DISABILITY! So, should she be discovered to be working, she would put THAT in jeopardy. I didn't have the heart to ask what the disability was for or how much. But it was clear she knew that driving for pay might render her ineligible for said payments.
She asked me if she should incorporate. Specifically as a means to shield herself like a Russian oligarch buying a $100 million apartment. I advised that it is generally prudent to use a corporation to insulate yourself from LIABILITY. It may not shield her from any negative consequence with regard to potential complications with her disability coverage but best that she consult an attorney.
At this point, the horse is already out of the barn. Uber will issue a 1099 so there is a clear record of earnings. Like Mr. K, I wish her well...
Finally, when I related all this to an entrepreneur friend and shared that the whole idea of working so many hours at such high risk for so little money, he shrugged. For large swaths of our populous, he said, this is the best they can do. I have to admit, I was taken aback. Not so much by what he said but by the realization that I live in a fishbowl! Gobsmacked is more like it...
Is that as good as it gets for many people on the lower socio-economic rung? Am I THAT naive?
Guess it's time to find out...
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