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Thread: UBER!!! Profits

  1. #1
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    Thumbs down UBER!!! Profits

    Wanted to share some numbers on profit for uber:

    let's assume an uber operator :
    * brings in roughly $1,700/week in uber revenue with roughly 60 hours of work/availabilty.
    * Purchased a new Navigator L 2014 (like the operator I seen at the dealership recently) with a mo. payment of let's say $1,300.00 over 48 mo. where the down-payment is $0 because the equivalant is returned as an asset (whatever's left of the car after 4 years of college-kids vommit).
    * All work was sedan work with only a 20% commission instead of 28%
    * The cost per dollar of revenue was roughly $0.25/in gas and maintenance/repairs
    * UBER offers I believe tags & insurance in PA for $100/week

    $1700 x 52 = $88,400.00 @ 80% = $70,720.00

    $1,300.00 x 12 = $15,600.00

    $1,00.00 x 52 = $5,200.00

    $0.25 x 88400 = $22,100.00

    bottled water
    chauffeur lic
    etc. $800/year


    Total Expenses would be $15,600.00 + $5,200 + $22,100 + $800 = $43,700

    Therefore revenue - expenses would be

    $70,720.00 - $43,700 = $27,020 divided by 52 weeks we get $520.58/week or roughly $8.67/hour assuming no-overtime, Can anyone tell me what I did wrong in the calculations? even after re-adjusting the number and this post. It still seems like UBER is a SCAM!!!.

    ** $0.25 cost/mile is an estimate based on 13.5MPG, $3.50/Gal, roughly $0.03/mile maintenance and a ratio of 0.86 miles per one billed dollar of revenue INCLUDING, idling and dead-heading (empty miles) to get there. the actual numbers are probably worse.

    [P.S. I already know it's garbage just wanted to share with these new "uber entrepreneurs"]
    Last edited by vflllc; December 12th, 2013 at 10:59 AM. Reason: errors

  2. #2

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    You hit the nail on the head. I even think your numbers are too optimistic. I place the net profit for the driver at closer to zero in the real world.

    Uber came up with quite the scam. Allow someone to take on the lion's share of the risk associated with a business and call them a "partner." Then sell their services for 20% below fair market value, then take a 20% commission. To add injury to insult, Uber goes out of their way to tell clients to not tip the driver! At the end of the day, the driver walks away with nothing.

    Uber is the worst kind of business. One that sells hope to small operators (or unsophisticated business people) who have very little to begin with and leaves them with nothing by letting them work and earn thousands of dollars only to stick them with the equivalent in bills. Many of the drivers have never had that much money pass through their hands so they feel like they are making a good living.

    They further hurt the industry by driving prices below fair market value, which clients then expect you to match.

    The good news is that I think Uber drivers are catching on and leaving. Uber is hurting for drivers to the point that they are advertising online for drivers on Facebook and even calling people to try to entice them to sign on with them. My drivers have been getting calls everyday this past week from Uber telling them to come on into their office to get signed up. I've already showed them how the numbers are a bunch of garbage. But without that sit down, they'd be all over it, with the promises of making all kinds of extra money this holiday season.

    The sad part is how much people that use Uber, love it. It shows that people will purchase a product that uses slave labor (or close to it) gilt free if they can get it cheap enough and remain willfully ignorant of how they get such great service at a bargain basement rate.

    If Uber would raise their rates to a reasonable level and add a 15 - 20% tip to the fare, I would give them a lot more credit. Or at least move them up out of the "evil" category.
    Last edited by Vintage Limos; December 12th, 2013 at 01:53 PM.
    Andrew Armitage
    Vintage Chauffeuring LLC
    Andrew@VintageChauffeuring.com
    www.VintageChauffeuring.com

  3. #3

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    Hey that reminds me of my upcoming first customer, she is providing the leads and selling the ride and taking half the profits, hmm wonder if she once worked for uber! If there are not enough tickets sold I end up making nothing yaaay! I think I'm gonna have to pass on the "opportunity" for her

  4. #4
    Senior Member cvclubs's Avatar
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    Wait a second... Let me get this straight...

    You are telling me I can go purchase a vehicle and appropriate insurance ect. and sign up for uber and have a revenue of $70,000 for doing nothing? That they take a 20% commission, which is a farm out standard, and you are calling it a scam?????? this seems like a great opportunity to me! Do no uber drivers have their own source of leads or clients? Do they just buy a car and rely on uber 100% to make a living? They dont do any marketing or anything at all? I just dont get how this is a scam. It looks to me like its the same as an affiliate who provides you with an additional $70,000 a year.

    Here is how I see it.

    Income from my own clients $200,000
    Expenses $50,000
    ------
    Total profit $150,000

    Sign up for uber
    Uber revene $70,000
    Uber expenses (using .25 per dollar as you stated)
    Uber Profit $52,500

    Total yearly profit $202,500

    If you rely on uber 100% then yes you will be working hard for barely anything however if you use uber as a source for guaranteed rides when you are not busy then its an extremely profitable partnership. I fail to see where the "scam" is unless it is contracted that you may not drive your own clients. If you dont have your own clients and have no plans to do the work necessary to get them then you should have never purchased a vehicle. Someone in this situation may as well have been a chauffeur at someone elses company because thats exactly what they are.... except they take on all the liability and expenses.
    Nick Groat
    Las Vegas, Nevada
    Nick@BellaVitaLimos.com
    Bella Vita Limousines

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    I'm confused on how it's a scam. They are very up front about their 20% rates. You get the money they promised you and since you are unable to profit they are somehow scamming you? They don't force you to take their work. If you want to get your own trips no one is stopping you but yourself. I used uber for the first time recently and they have some amazing technology. They deserve to be able to charge someone commission.

  6. #6

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    Lots of great reviews on the customer side but lots of not so great reviews on the operator side. I myself would let the car sit rather than work for nothing even if it's mixing in uber rides with my own clients as in the end once they receive the "cheap" price would they ever call you for your regular rate? Probably not so uber will get you ZERO new clients unless you want to give them the cheap price. I once had a short term finance company that charged crazy fees and gave us very little time or options kinda like the mob, this was for purchasing vehicles. Well they even would tell us we couldn't take a vehicle out of town or have it anywhere else but home base. We realized it was our business,paying all the overhead and insurance and they were reaping every reward because they were the only ones making any money! We caught on and canned their ass and guess what they are no longer around! These companies have GREED written all over them and in the end they all go away after enough wake up but in the meantime they make a boatload of money so it works out just fine for them...Bottom line for now days people are cheap and yes they only care about that "deal"
    Last edited by LoneLimo; December 13th, 2013 at 07:31 AM.

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    Super Moderator gunny's Avatar
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    UBER scares the piss out of Nanny State protected operations. It's an alternative for sharecropper cabbies paying big lease fees to Taxi Barons.
    Airport Limo Service Spring Hill, Brooksville, Citrus County FL
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  8. #8
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    Right on the money, if you are a small operator and have some free time why not work. Is this any different than Carey or Boston Coach or any other affiliate sending you work? If I was getting into the business I would want as many people sending work my way as possible.




    Quote Originally Posted by cvclubs View Post
    Wait a second... Let me get this straight...

    You are telling me I can go purchase a vehicle and appropriate insurance ect. and sign up for uber and have a revenue of $70,000 for doing nothing? That they take a 20% commission, which is a farm out standard, and you are calling it a scam?????? this seems like a great opportunity to me! Do no uber drivers have their own source of leads or clients? Do they just buy a car and rely on uber 100% to make a living? They dont do any marketing or anything at all? I just dont get how this is a scam. It looks to me like its the same as an affiliate who provides you with an additional $70,000 a year.

    Here is how I see it.

    Income from my own clients $200,000
    Expenses $50,000
    ------
    Total profit $150,000

    Sign up for uber
    Uber revene $70,000
    Uber expenses (using .25 per dollar as you stated)
    Uber Profit $52,500

    Total yearly profit $202,500

    If you rely on uber 100% then yes you will be working hard for barely anything however if you use uber as a source for guaranteed rides when you are not busy then its an extremely profitable partnership. I fail to see where the "scam" is unless it is contracted that you may not drive your own clients. If you dont have your own clients and have no plans to do the work necessary to get them then you should have never purchased a vehicle. Someone in this situation may as well have been a chauffeur at someone elses company because thats exactly what they are.... except they take on all the liability and expenses.
    I want to die while asleep like my grandfather,
    not screaming in terror like the passengers in his car.

  9. #9

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    if it makes you no money and you work for free why work? I will get back to my first client story, now they have hired another car so now 3 peeps getting a piece of the small pie lol. With gas and the number of hours I will be in the red big time. But hey they just sit and enjoy their event and show up in style while they make money with us doing all the work while losing money. But you see the customer "gets theirs" and that's all they care about so that is the only point I am trying to make. Working for nothing is not "smart" if you ask me but I'm just a newb so..

  10. #10

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    It's different than Boston Coach or Carey in that Uber charges about 20% less than fair market price. They take a 20% commission. And they go out of their way to tell clients to not tip you.

    How many small operators are operating at a greater than 20% profit margin where they can afford to give away 20% of their gross sales as a commission? My guess is less than .01%.

    It is really no different than the small time outfits that want a 20% commission for sending you jobs that are at give away prices. Uber is doing the same exact thing on a large scale.

    Why not just slash your own rates by 40%?

    I'd rather be broke and well rested than broke and exhausted.

    To touch on how is it different than Boston Coach... It's different in that their rates are commiserate with taking a commission and still having enough meat on the bone that the operator doesn't starve. In my area Boston Coach (no tipping policy as well) charges about $180 for a sedan to the airport. If they took a 35% commission (I have no idea what they ask for), that would leave the operator with $117 minus taxes of about $6. Most small operators around here with professional service will charge $90 plus tax and the driver will get a $15 - $20 tip. Those numbers put you pretty close to one another at around $110 total going to the operator. Uber skins you and leaves you with $80 for the job. Which after all your expenses equals pretty close to $10... For 3 hours of work more or less. If you want to work for below minimum wage, be my guest.
    Last edited by Vintage Limos; December 13th, 2013 at 01:23 PM. Reason: Further explanation of my stance.
    Andrew Armitage
    Vintage Chauffeuring LLC
    Andrew@VintageChauffeuring.com
    www.VintageChauffeuring.com

  11. #11
    Senior Member cvclubs's Avatar
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    Regardless of the discount the calculations shown above gave a revenue of $70,000 and a profit of $52,500 after gas. $52,000 is hardly working for nothing. Again I do not see uber as a source to make a living but an affiliate tool which provides farm out rides on a regular basis to supplement your current income. I would use this as a great source of income to fill my down time.

    If someone plans on doing nothing besides taking uber runs they are not an operator or a business owner they are an independent contractor for uber.

    As far as profit margin I am well beyond 20% and I dont believe I am the top .01%. However, if I did not work on my own marketing and promotions and relied on uber then I would be working for nothing like in the examples above.

    With the information I have reviewed the only way I would see uber as a "scam" is if I was not capable of running my own business and did not understand how to use uber as a tool instead of my only source of income. If someone told me they bought a vehicle and planned on using it strictly for uber as a full time job I would consider them a fool.
    Last edited by cvclubs; December 13th, 2013 at 02:35 PM.
    Nick Groat
    Las Vegas, Nevada
    Nick@BellaVitaLimos.com
    Bella Vita Limousines

  12. #12
    Senior Member cvclubs's Avatar
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    Quote Originally Posted by Vintage Limos View Post
    It's different than Boston Coach or Carey in that Uber charges about 20% less than fair market price. They take a 20% commission. And they go out of their way to tell clients to not tip you.

    How many small operators are operating at a greater than 20% profit margin where they can afford to give away 20% of their gross sales as a commission? My guess is less than .01%.

    It is really no different than the small time outfits that want a 20% commission for sending you jobs that are at give away prices. Uber is doing the same exact thing on a large scale.

    Why not just slash your own rates by 40%?

    I'd rather be broke and well rested than broke and exhausted.

    To touch on how is it different than Boston Coach... It's different in that their rates are commiserate with taking a commission and still having enough meat on the bone that the operator doesn't starve. In my area Boston Coach (no tipping policy as well) charges about $180 for a sedan to the airport. If they took a 35% commission (I have no idea what they ask for), that would leave the operator with $117 minus taxes of about $6. Most small operators around here with professional service will charge $90 plus tax and the driver will get a $15 - $20 tip. Those numbers put you pretty close to one another at around $110 total going to the operator. Uber skins you and leaves you with $80 for the job. Which after all your expenses equals pretty close to $10... For 3 hours of work more or less. If you want to work for below minimum wage, be my guest.
    Andrew i appreciate the time you took to explain this. I am trying to see your point of view and change my opinion if needed however I cant get myself to think this is as bad as it is made out to be.

    I think I should also point out that uber also charges customers by the mile.

    I would like to ask how you are only making $10 out of that $80? That seems like a crazy expense rate to me. Are you estimating $70 in gas? If you drove enough to have a $70 gas expense you really put some miles on the vehicle and your revenue would reflect that.

    I am assuming that an operator has their own source of income aside from uber. Meaning that insurance and other expenses are already covered. Uber rides would be supplemental with gas and time being the only expenses to account for. Please correct me if I am wrong.
    Nick Groat
    Las Vegas, Nevada
    Nick@BellaVitaLimos.com
    Bella Vita Limousines

  13. #13

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    Nick, there are more variable costs than fuel. In my case, Downtown Chicago or either of the airports are about 45 - 50 miles away. Figuring $20 for fuel (round trip) + $20 wear and tear / depreciation / maintenance / repair / vehicle replacement fund + $24 for the driver + $6 - $8 in tolls, taxes, airport stamps = right around $70 depending on gas prices. So yes, that leaves about $10 to go towards business overhead and hopefully net profit if I was working with Uber. So no thank you.

    Nick, I think you are including your salary in your business's profit.

    Using your own numbers as a rough guide, a 20% profit margin would mean that after all expenses including what you pay yourself, your business should have a growth of $40,000 a year in retained earnings or in acquisition of additional capital. If so, you are on your way to a very successful business! After 3 years, I am no where close to 20% profit margins and I pay myself nothing!

    Also, in spitballing here, the $70k a year you can make (I doubt it) was if you were working 60 hours a week with Uber. If so, you would have very little time to handle your own runs which I guarantee are more profitable.

    Please don't misunderstand me... I think Uber's technology is fantastic and their customers are fanatics. I don't think that they would lose many clients if they laid off the telling people not to tip. (Leave it unsaid, if people don't tip, okay, but many would have tipped their driver because for the most part, they do provide excellent service). Then raise their prices 15%. People are willing to pay for the convenience and quality. Upping the price $5 per trip will not drive most people using black car service back into a dirty taxi. I don't understand why they have a superior product and they insist on offering it at bargain basement rates at the expense of the drivers, the front line of their business.

    Nick, by all means try it out. You have nothing to lose, you already have the cars, insurance, etc. in place. Possibly in Las Vegas the numbers come out better. Maybe people are taking a 1 block rides for the minimum rate of $15 or so (whatever Uber sets it at in your area) and you can get 5 or 6 runs in an hour. If nothing else, you can see how the technology works and really figure out how you can apply what works to your business.

    I should be in Vegas in January for a friend's bachelor's party, I'll look you up if we need limo service.
    Andrew Armitage
    Vintage Chauffeuring LLC
    Andrew@VintageChauffeuring.com
    www.VintageChauffeuring.com

  14. #14

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    Quote Originally Posted by cvclubs View Post
    I think I should also point out that uber also charges customers by the mile.

    I would like to ask how you are only making $10 out of that $80? That seems like a crazy expense rate to me. Are you estimating $70 in gas? If you drove enough to have a $70 gas expense you really put some miles on the vehicle and your revenue would reflect that.
    Well, some factors here... When you drive someone 50 miles from your home base, you will in all likelyhood be driving home empty, so double your fuel expense. If I drop someone in Chicago, being that I am a suburban operator, I have certain barriers that prevent me from picking up another ride in the city unless that person is leaving the city. Here in Chicago, limos registered as Chicago businesses have different license plates than suburban companies (and they pay good money for them). Get caught encroaching in Chicago turf and the city will fine you thousands of dollars per violation.

    Uber looks good on the surface, much like a casino does. It looks like your getting a ton of money, but then they take some back, and then they leave you with the check, leaving you very little. How many people make a living off gambling at a casino? Probably the same amount that make money off of Uber.
    Andrew Armitage
    Vintage Chauffeuring LLC
    Andrew@VintageChauffeuring.com
    www.VintageChauffeuring.com

  15. #15
    Senior Member cvclubs's Avatar
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    Quote Originally Posted by Vintage Limos View Post
    Nick, there are more variable costs than fuel. In my case, Downtown Chicago or either of the airports are about 45 - 50 miles away. Figuring $20 for fuel (round trip) + $20 wear and tear / depreciation / maintenance / repair / vehicle replacement fund + $24 for the driver + $6 - $8 in tolls, taxes, airport stamps = right around $70 depending on gas prices. So yes, that leaves about $10 to go towards business overhead and hopefully net profit if I was working with Uber. So no thank you.

    Nick, I think you are including your salary in your business's profit.

    Using your own numbers as a rough guide, a 20% profit margin would mean that after all expenses including what you pay yourself, your business should have a growth of $40,000 a year in retained earnings or in acquisition of additional capital. If so, you are on your way to a very successful business! After 3 years, I am no where close to 20% profit margins and I pay myself nothing!

    Also, in spitballing here, the $70k a year you can make (I doubt it) was if you were working 60 hours a week with Uber. If so, you would have very little time to handle your own runs which I guarantee are more profitable.

    Please don't misunderstand me... I think Uber's technology is fantastic and their customers are fanatics. I don't think that they would lose many clients if they laid off the telling people not to tip. (Leave it unsaid, if people don't tip, okay, but many would have tipped their driver because for the most part, they do provide excellent service). Then raise their prices 15%. People are willing to pay for the convenience and quality. Upping the price $5 per trip will not drive most people using black car service back into a dirty taxi. I don't understand why they have a superior product and they insist on offering it at bargain basement rates at the expense of the drivers, the front line of their business.

    Nick, by all means try it out. You have nothing to lose, you already have the cars, insurance, etc. in place. Possibly in Las Vegas the numbers come out better. Maybe people are taking a 1 block rides for the minimum rate of $15 or so (whatever Uber sets it at in your area) and you can get 5 or 6 runs in an hour. If nothing else, you can see how the technology works and really figure out how you can apply what works to your business.

    I should be in Vegas in January for a friend's bachelor's party, I'll look you up if we need limo service.
    When youre out here give me a call or message me for sure!

    As far as uber in vegas it will not happen. Our rates are regulated strictly and ubers system would never be allowed. I am discussing this strictly for informational purposes as I am unbiased and it will not effect me.

    In your case where an airport is 45-50 miles away I agree that uber will not work. I do not think it will work not only due to the inconvenience for you but because uber clients are looking for any luxury vehicle on the spot. When I was in LA and tried it out there was a car to the door within 5 minutes every time. It was very nice! Should I had to wait 45 minutes I would nto have used it at all. My impression of the service was that you are basically using a lucury taxi service that works out to about the same rates as an hourly service. We used SUV's and we paid about $70 per ride which each lasted about 30 minutes. I was told by the driver that he was charged a 20% commission so that left him $56 which is the same I would expect from any farm in ride. Should we have been farther away our tab would have been much more as we were charged per mile. As far as the tipping goes uber states that a 15% gratuity is included in the rate. I never came across anything that said do not tip. We of course gave extra because I do nto believe 15% is adequate for the services provided.

    I see exactly where you are coming from based on your market however in an urban area where pickup requests are near I see it as a decent resource for additional income.

    However, I do agree with you that $70,000 is a high estimate. I do not think uber will make you rich but it will help pay the bills.
    Nick Groat
    Las Vegas, Nevada
    Nick@BellaVitaLimos.com
    Bella Vita Limousines

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