It’s an annual tradition, Uber rings in the new year with a resolution to lower rates across the board. As of January 8, 2016 Uber has cut rates in 80 cities. For passengers, this means even lower fares with Uber. For drivers, it means that when you sign in to the Uber app to drive in 2016 you will likely be earning less. According to Uber, lower rates means an increase in demand and higher earnings for drivers. While this may be true to an extent, your actual earnings per ride will be decreasing, a fact that is difficult to argue. So what does that mean for us drivers? Is driving for Uber still a means to earn a living? Or do rate cuts mean that driving for Uber may no longer be a reliable source of income? Some of this depends on which city you are driving in, rate cuts vary by location, with some cities getting hit much harder than others. Check out this article by TheRideShareGuy for more detailed information on the amounts of rate cuts in each city. For most of us this means we need to take a more serious look at the weight of our earnings to the expenses we pay for each mile that we drive. If you have not done so already, do it now. Vehicle maintenance, wear and tear, gas and insurance all add up. And depending on your location and driving habits you might be earning significantly less than what you think.
This grim news leads one to ask: what can I do to earn more as an a rideshare driver. First of all, keep your options open. Lyft is still a viable option, and they offer a power driver bonus (rewards drivers for driving more by letting them keep a larger percentage of the paycheck) as well as guaranteed rates during certain hours. At a time when rates feel like they’re anything but guaranteed, knowing that you will get paid $25 an hour during certain hours can be very comforting. The bad news is that Lyft has also decided to cut rates in 2016. After opting to keep rates the same in 2015, Lyft has apparently realized that they cannot remain competitive with Uber if they don’t also keep rates low. If you’re interested in driving for Lyft check out our Lyft sign up bonus and get some extra cash after you complete the minimum ride requirement.
There are also a few things you can do as an Uber driver to increase your earnings even in the face of rate cuts. First of all, avoid rush hour unless there is a significant surge price. We get paid more per mile than we do per minute, so sitting in traffic does not pay, and it actually costs more in gas expenses. Take advantage of surge pricing. Most of us drive part time, which gives us the flexibility of choosing our hours. Know the places and times in your city where your most likely going to see surge pricing, and drive during those times. I spend a decent amount of time turning my app on and off (quickly so that I don’t get a ride request I can’t fill) to check for surge pricing. If surge pricing isn’t there I focus my time on something else that is likely to earn me more money per hour (one of the many benefits of the flexibility that Uber offers). Find a way to take advantage of the referral program. Uber doesn’t take a cut from referral bonuses, which means you’re keeping a larger percent of your income. You still get taxed on those dollars at the end of the year, but that’s to be expected with any kind of money that you earn.
At the end of the day, most of us drive for Uber because we love the flexibility an being our own boss. While there are clearly disadvantages to this, sometimes enough to make us feel like we are anything but our own boss, the flexibility still beats a lot of other options out there. If you haven’t signed up to drive yet and you’re still interested after reading this, get an Uber sign up bonus when you apply with my referral code.