Recently, I took a very pleasant group of people to a small city by the water. Their final destination was approximately 50 minutes away. I picked them up at the airport. They were here in Michigan to spend the week of July 4th by the water.
This trip inspired me to share a little more about the financials behind long rides and talk a little about why the tip is more important on these. Here are the items I will take you through:
- Uber Payout: What did the passenger pay, and what did I make as the driver?
- Actual Payout: What are my earnings after my operating costs (time, gas, and ongoing vehicle maintenance)?
- Return Trip “Fee”: What does Uber say about upfront return trip reimbursement requests?
- Final Thoughts
So as I stated, I picked them up at the Grand Rapids International Airport and drove them to Douglas, Michigan (please see attached image).
As you can see from the trip log, the ride was 47.13 miles and it paid me $55.43 without tip. This group was awesome because they tipped me $10.00 on the app and gave me an additional $20.00 in cash. My take was $85.43 for this ride.
Most rideshare drivers calculate their hourly earnings based on these numbers.
Minutes Driving: 49 one way, or 98 minutes round trip. I could have stayed in Douglas and received requests, but I decided to head back towards the airport in hopes of getting another long ride.
Most drivers would calculate their earnings based on the money made divided by the number of minutes driven
$85.43 / 98 Minutes = $53.30/Hour
Now let’s look at it without the Tip:
$55.43 / 98 Minutes = $33.93/Hour
A full time driver should also include the amount of time spent waiting for the incoming ride request. In this case I waited approximately 50 minutes before I was pinged to this ride. In those 50 minutes I did receive other requests, but decided to stay at the airport, hoping for a long ride. This is obviously a business decision. Now let’s make the same calculations with the added 50 minutes:
$85.43 / 148 Minutes = $34.63/Hour
Without the Tip:
$55.43 / 148 Minutes = $22.47/Hour
Now, some will say, that $22/hour is not a bad hourly rate. However, we still have not taken my operating costs into consideration, which are my gas and vehicle wear & tear.
Before we get into that, my rider paid $81.13 for the ride before tips. Uber’s service fee was $25.70 or 31.67% (Before Uber changed to upfront pricing, their take was 28% - but that is a different story for a different time.)
Gas and wear/tear
According to https://www.fueleconomy.gov/trip/ the gas cost of this trip is $10.24 there and back.
According to https://www.rideshare.com/calculators/commute-cost-calculator.html wear & tear is approximately $0.17 per mile for my vehicle, meaning the cost for this ride is (94.26 miles): $16.02. FYI: wear & tear is defined as vehicle depreciation, tires, and ongoing vehicle maintenance.
Now let's do the same calculation as before, knowing that I spent $10.24 in gas and $16.02 in wear & tear, or a total of $26.26.
$59.17 ($85.43-$26.26) / 148 Minutes = $23.98/Hour
Without the Tip:
$29.17 ($55.43-$26.26) / 148 Minutes = $11.80/Hour
Return Trip Fee
Knowing that operating costs eat into the apparent “profits” of long rides, some rideshare drivers ask their passengers to pay a “return fee” since the driver is far out of their home city. This is negotiated before the ride starts, and some passengers have refused to pay such a fee.
Is it against the rules to request an upfront “return fee?” The short answer - nobody can be sure. Uber’s Terms of Service are vague when it comes to this. Uber also recently changed their verbiage about fares, tolls, and fees. Compare what the Terms of Service said in 2017 to the current verbiage in 2018.
So can you be deactivated for asking passengers to cover your return trip costs? We at GR Rideshare Adventures have not heard of this, but we do not know for sure. We spent a considerable amount of time digging through Uber’s policies and could not find a clear cut answer.
If you request a “return fee,” be prepared for the passenger to say no and exit your car to request a ride with someone else. If the passenger reports you to Uber, you may risk being deactivated.
I realize there are still things I have not taken into consideration, such as mileage reimbursements, taxes, etc. Mainly I left those out because they are really hard to decipher on a single trip level. We may follow-up on this article by looking at an entire month and/or year.
I do think though that these numbers show how significant the additional tip/return fee is. That being said: It is my opinion that a tip should be based on service level.
To provide the highest level of service to your passengers, ensure you create a comfortable environment, especially on longer rides:
- Keep your car clean and decluttered
- Offer charging cables
- Offer water or offer to stop if the rider requests it
- Keep your car smoke free (that’s just showing respect to your rider)
- If you play music, let your rider pick the music type
Remember, this is a service industry, and if you expect a tip, make sure you do your part!
Other Articles about Tipping and Rideshare
How to Tip on Uber/Lyft