# Why are rates per mile so different?



## evboy (Nov 12, 2014)

I was reading that in orlando its 75 cents per mile and LA is 1.00 but its 1.50 in or more in other cities. why does uber think orlando is only worth 75 cents and LA is only worth 1.00 a mile but some other city is worth 1.50. It cant go by cost of living because LA is expensive and orlando isnt much cheaper. what is the method to their setting rates. im confused. If the IRS says its 57 cents a mile to drive a uber than shouldnt rates be at least double to make a fair wage. 1.15 should be bare minimum.


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## elelegido (Sep 24, 2014)

It's all about the maturity of each market. When Uber starts in a new market it sets relatively high fares. Then, as more pax and drivers become active in the market, fares are adjusted progressively lower.


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## evboy (Nov 12, 2014)

elelegido said:


> It's all about the maturity of each market. When Uber starts in a new market it sets relatively high fares. Then, as more pax and drivers become active in the market, fares are adjusted progressively lower.


how do u make a profit on 75 cents. if i owned a restaurant and it costs 57 cents for a pasta side, i am not going to charge 75 cents for it.


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## elelegido (Sep 24, 2014)

evboy said:


> how do u make a profit on 75 cents. if i owned a restaurant and it costs 57 cents for a pasta side, i am not going to charge 75 cents for it.


I don't think you do. I think you work the bonuses until they expire, and then look for something else to do.


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## evboy (Nov 12, 2014)

elelegido said:


> I don't think you do. I think you work the bonuses until they expire, and then look for something else to do.


why not do the circuit and move to a city with the highest per mile rate, and then when they lower rates move to the next city. that should keep u busy for a couple years at least.


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## elelegido (Sep 24, 2014)

evboy said:


> why not do the circuit and move to a city with the highest per mile rate, and then when they lower rates move to the next city. that should keep u busy for a couple years at least.


Because although fares are high in new cities, volume of rides is low.


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## evboy (Nov 12, 2014)

elelegido said:


> Because although fares are high in new cities, volume of rides is low.


as uber becomes mainstream, do you see it at 75 cents a mile in every city. for that to work, u would have to drive someone from a to b and then have someone waiting for a ride at b and drive him to c, and then have someone at c after u drop off b. otherwise you have to pay for gas to get back to the main area.
let me get your opinion on this. at 75 cents a mile, if i buy a used car for 4k that meets the minimum year, could i make a decent profit since depreciation wont have a big effect, since it only cost 4k. i cant imagine paying 12k for a car to drive around at 75 cents.


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## elelegido (Sep 24, 2014)

evboy said:


> as uber becomes mainstream, do you see it at 75 cents a mile in every city. for that to work, u would have to drive someone from a to b and then have someone waiting for a ride at b and drive him to c, and then have someone at c after u drop off b. otherwise you have to pay for gas to get back to the main area.


That's Travis' vision.


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## evboy (Nov 12, 2014)

elelegido said:


> That's Travis' vision.


are the drivers in LA getting that kind turnover of pax. they are probably the busiest city and most mature.in defense of travis, there are so many people that dont know who or what uber is. when 80% of the population uses uber, maybe it could be profitable at 75 cents, with the turnover it would generate.


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## Guest (Mar 28, 2015)

elelegido said:


> I don't think you do. I think you work the bonuses until they expire, and then look for something else to do.


Maybe go shopping for dash cams


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## Txchick (Nov 25, 2014)

evboy said:


> I was reading that in orlando its 75 cents per mile and LA is 1.00 but its 1.50 in or more in other cities. why does uber think orlando is only worth 75 cents and LA is only worth 1.00 a mile but some other city is worth 1.50. It cant go by cost of living because LA is expensive and orlando isnt much cheaper. what is the method to their setting rates. im confused. If the IRS says its 57 cents a mile to drive a uber than shouldnt rates be at least double to make a fair wage. 1.15 should be bare minimum.


LA is .90 cents a mile which is s big joke. We have the same rates in Dallas as LA.


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## Txchick (Nov 25, 2014)

evboy said:


> are the drivers in LA getting that kind turnover of pax. they are probably the busiest city and most mature.in defense of travis, there are so many people that dont know who or what uber is. when 80% of the population uses uber, maybe it could be profitable at 75 cents, with the turnover it would generate.


Drivers are not making money at .75 cents per mile. Not profitable at .90 cents per mile. Uber not making money after dropping fares drops in Jan 2015.


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## docswife (Feb 24, 2015)

Txchick said:


> Drivers are not making money at .75 cents per mile. Not profitable at .90 cents per mile. Uber not making money after dropping fares drops in Jan 2015.


How much were rates in Dallas before they cut them?


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## ReviTULize (Sep 29, 2014)

evboy said:


> how do u make a profit on 75 cents. if i owned a restaurant and it costs 57 cents for a pasta side, i am not going to charge 75 cents for it.


You just have to start buying cheaper pasta, eliminate/reduce ingredients and cut quality. Sound familiar? Eventually you get butter and pasta!!


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## Txchick (Nov 25, 2014)

docswife said:


> How much were rates in Dallas before they cut them?


$1.20 per mile $5.00 minimum before that 1.45 per mile $6.00 minimum. Prior to that $1.70 per mile. I quit Jan 2015 @ .90 cents.


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## Michael - Cleveland (Jan 1, 2015)

evboy said:


> I was reading that in orlando its 75 cents per mile and LA is 1.00 but its 1.50 in or more in other cities. why does uber think orlando is only worth 75 cents and LA is only worth 1.00 a mile but some other city is worth 1.50. It cant go by cost of living because LA is expensive and orlando isnt much cheaper. what is the method to their setting rates. im confused. If the IRS says its 57 cents a mile to drive a uber than shouldnt rates be at least double to make a fair wage. 1.15 should be bare minimum.


You are thinking like a driver/worker/employee (good for you!)...
but that's not how corporations 'think'.

Fares and the availability of cars are the only thing that differentiate one ride-share company from another.
Now that Uber has moved so far ahead of its competition in 'brand' and users, it can use its only means of differentiating itself to drive competition out of the business entirely, by making it unprofitable for the others to operate head-to-head with Uber.

We can only hope that once whatever milestones, goals and objectives Uber has set for a market, that they will then raise rates again.

But in the meantime, *fares (and couponing/promo-codes) are the only real tools Uber has to build it numbers in both customer count and frequency of use* - and drivers are the pawns sacrificed to accomplish that strategy.


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