The Challenge of Uber and Lyft

Honestly, Uber and Lyft are totally brilliant.  I don’t mean this as a compliment.  There is no denying that the mobile application is clever.  It makes getting and paying for a ride easy and painless.  The algorithms that figure out surge pricing so drivers are incentivized to work in certain parts of town to ensure coverage, are the dispatching innovation everyone in the world of logistics wants to get their hands on.  It is even genius, the way they skirt regulation and avoid overhead and liability.

These reasons are also why these ride hailing services suck.  First of all, more people on Uber, fewer people on the bus.  Can we all just admit to how spoiled we in the car class are?  I admit it.  I’m a life-of-bike girl.  As a 10 year bike messenger, bikes were religion, culture, work, play, romance, EVERYTHING.  My bikey friends frowned on me and shook their heads in derision when they found out I had a car to drive me to places far away.  There were buses, trains and planes for that sort of thing.

Ride hailing services are inherently wasteful.  I know this because I currently support myself driving for Skip the Dishes.  Skip the Dishes is Uber for food, minus the incentive pay and the friendly conversation.  As a bike messenger and infrequent dispatcher, I understand how this business works, but a lot of my fellow independent contractors do not.  You pick one thing up and deliver that one thing.  You get paid by the order, be it pizza or human, you get your cut depending on distance mostly, sometimes subsidies.  The average is $6 per job.  If it takes me 30 minutes on average to pick up and deliver, that is potentially $12 per hour.  Only, it really isn’t $12 per hour.  Granted I might pickup and deliver 4 things in one hour so I potentially could make about $25 per hour.  This doesn’t happen much.  I spend a lot of time reading and waiting.

IRS Official Guidelines Employee vs. Independent Contractor

Companies have to cover their work.  So they have to have enough drivers.  Since you are an independent contractor, it’s a lot easier for the dispatcher to say, “Sorry we don’t have anything you’ll have to wait.”  If the company is on the hook to pay a steady hourly rate, the employer will be more efficient.  Otherwise they will lose lots of money.  So when I sit around, I’m the one losing money.  Plus that gross pay of let’s average it and call it $18 per hour.  Well that turns into about $14 after taxes because I’m self-employed.  Then it keeps going down when you figure in cell phone fees, gasoline, car repairs, insurance and any moving or parking violations.  I drive a little car and I’m sneaky so my other overhead isn’t high, but still $12 an hour is not great money.  Also, I can never deliver more than one thing at a time.  As a messenger I could have 6 envelopes in my bag, each of them earning me anywhere from $3-$25 apiece.  This significantly balances out my expenses and my sitting time.  All businesses have slow times.

The worst thing about Uber and Lyft is that it is a false solution to a very complicated problem, transportation.  Putting people in cars as opposed to buses and trains is a gigantic waste of space.  Basically, you pay for entitlement.  Buffalo, as a city, is having a really hard time bridging its inequality gaps.  Uber and Lyft will exacerbate an already poor transportation system, particularly when the ECIDA (Erie County Industrial Development Association) thinks $100,000 of public funds is better spent on a marketing campaign for Uber and Lyft than on adding bus routes for our friends on the East Side who could really use them.  Uber and Lyft don’t solve the transportation problem, they only mask it.

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