Uber Economics, finance, and strategy is complicated. It’s complicated enough that I don’t know where to start. I deliberately avoided it.
But there is an actual reader question in this wasteland of a blog! I have to try.
Context: My answers are likely wrong for many drivers. I am an unusual Uber driver. Most notably:
- I drive an electric vehicle. Many of the usual costs and downsdies don’t apply to me. I actually make a small profit every mile through the magic of tax deductions!
- I don’t work full time. I pick my own hours. For example, Friday and Saturday nights are very profitable. But I am usually sleeping or doing my own things at night. Drunks are more profitable, but riskier and I usually don’t like dealing with them. I tend pass on the most profitable hours.
- I don’t need the money to pay rent. It’s a sideline.
On to your questions!
What percentage of riders tip?
This is heavily dependent on the kind of trip.
My focus is airport trips. Maybe 60% tip. I try to get passengers traveling for business. Everyone is generous with their company expense account. Passengers who are dealing with a big vacation costing thousands of dollars put me in the same mental bucket as valet parking and such, a mandatory tip. Generally prosperous professionals and I always have something to talk about and that conversation drives tips.
Many flyers don’t tip you when the ride ends. They are busy catching their flight. But the next time they open the app they get a prompt. I often get tips a few days after the trip itself. This is nice – to make a few dollars on a day I’m not working! It’s like finding a ten dollar bill in your pants pocket.
But for most regular intown trips, maybe 30% tip. And they are smaller tips.
Worst tippers:
- I often drive kids to or from school. Kids don’t tip. Sometimes the parents come along. These are not generally people with a lot of money, they have to pay someone twice a day, there’s not much tipping. (But always very nice people.)
- Medical passengers / Seniors. Many of them are 3rd party rides. That means the organization (hospital, nursing home, etc) books the ride on the seniors behalf. The person who booked the ride isn’t in the car, is already busy doing something else for their job, they aren’t paying attention, and of course they never tip. Many drivers categorically refuse these rides. The independent older folks that book for themselves also love to talk and socialize, but rarely tip. When they do tip, the amount is appropriate to the Kennedy administration.
Can you accurately predict tip based on the route requested?
Sometimes. I can put them in one of the categories above (and others). The other big factor is how well we bond during the trip. When I connect with a passenger and we enjoy the ride together tips are very likely. When it’s dead silence throughout the trip (even if they requested the silence) – who knows.
What % of your average hourly take is tip based?
Funny, I never stopped to estimate. It’s so variable! Maybe 20%?
What is the furthest from home you have found yourself after a stint of Uber driving?
Great question! A driver quickly learns to avoid “dead-heading”. In Uberland, this is slang for driving without a fare. It’s giving away time and miles that could be earning profit. Example: Uber might offer a 90 minute trip to nowhere. The trip fare itself is profitable, but then I have to drive back, almost certainly without a passenger. It’s a bad deal. When I started I would often find myself several towns away from Atlanta (Jonesboro, Douglasville, Peachtree City) wondering what happened. Now I know better and avoid those fares.
The worst I had was from the airport. It was to go to Spring Street in Atlanta and it had a generous fee. I accepted it. I picked up the passenger and we set out and as I looked at the navigation it dawned on me that we weren’t going to Spring Street in Atlanta. It was a Spring Street near Macon – an hour and a half away. Oh geez. Macon!? I wanted to cancel, but we were already on the road. Instead, I mentally shrugged, “Why not? I have nothing better to do today. He’s certain to leave a great tip, sure.” We did have a good drive, I did get him there on time. I listened to a history podcast on the way back. It was a fun morning. But the jerk didn’t tip at all. Some people.