# White Paper: NYC UberX Drivers Lose 68% of Revenue to Expenses



## Hal Green (Sep 19, 2014)

White Paper: NYC UberX Drivers Lose 68% of Revenue to Expenses "A terrible deal, with substantial insurance risk," says author. .cf_arrowtail{ visibility:hidden; }














NEW YORK, June 15, 2015 /PRNewswire/ -- In the first-ever white paper examining expenses of a New York City UberX driver, policy and financial analyst Lawrence Meyers estimates a cost of 37 cents-per-mile for the average UberX driver, far exceeding what most candidates anticipate.

"Towards a Cost Estimate for a NYC UberX Driver" appears at: http://bit.ly/1Sc7o5w

The paper found that operating costs, plus 31% in commissions, taxes, and fees, caused UberX drivers to lose 68% of pre-tax revenue on the first $1-per-mile of earnings, and 55% on the first $1.50-per-mile.

Meyers says, "Driving UberX in NYC is not the value proposition naive drivers assume, and explains why veteran hacks return to fleet driving after sampling UberX."

The data, collected from third-party resources, suggests that, "Candidates are lured with the promise of supplemental income without being alerted to ridesharing's substantial costs," Meyers asserts. "An automobile is a depreciating and physically deteriorating asset. Full-time rideshare driving can shorten a car's useful life span by as much as 66%."

Besides drivers' unfamiliarity with operating costs, Meyers expressed concerns about the risk drivers take without holding commercial liability insurance. Such insurance is often prohibitively expensive, so drivers rely on rideshare company liability policies when ferrying passengers. However, limits are negligible when not carrying passengers. Furthermore, carriers can void policies if they discover their client rideshares, even casually, and even if an accident occurs when the rideshare app is off.

"Drivers risk 100% of personal assets if they rideshare without commercial insurance. Virtually every personal auto policy explicitly declares that any commercial use whatsoever voids the policy. In a serious accident, adjusters are thorough with their investigation. You will be discovered."

Statistics show regular drivers are 50% more likely to cause an accident than professionals. Consequently, Meyers cautions that, "New Yorkers are at the mercy of 16,000 UberX drivers who, if they crash into you when they aren't even ridesharing, will have coverage voided. You'll be saddled with medical bills, property damage costs, and zero recourse."

Consequently, Meyers said, insurance companies need to innovate with hybrid policies. Until then, he advises current and prospective rideshare drivers to put their career ambitions on hold unless they obtain commercial insurance.

"The costs and risk associated with being an UberX driver in New York City are significant. Let the driver beware."

SOURCE Lawrence Meyers


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## Backdash (Jan 28, 2015)

Good god man!
Somewhere around 50% of that article (if you posted the whole thing) talks about how NYC Uber drivers


Hal Green said:


> risk drivers take without holding commercial liability insurance.


Now we all know here in the big apple you are not a licensed FHV without the required commercial insurance and if you not a licensed FHV driver with a licensed FHV you cannot legally drive for Uber or anybody else. Kinda takes the credibility away from everything else that was written, true or not.

Edit: Oh there's 21 pages... Lemme go see after dinner


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## Backdash (Jan 28, 2015)

Hal Green said:


> "Towards a Cost Estimate for a NYC UberX Driver" appears at: http://bit.ly/1Sc7o5w


its there...


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## UberHammer (Dec 5, 2014)

> *White Paper: NYC UberX Drivers Lose 68% of Revenue to Expenses*




That's actually not a bad percentage wise. Grocery stores operate at 97% of revenue to expenses. The problem with Uber is the rates so low that the revenue is ridiculously low, which means the 32% drivers keep is peanuts.


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## chi1cabby (May 28, 2014)

UberHammer said:


> 32% drivers keep is peanuts.


Book $350 in 12 Hours.
Keep $112 in pre-income tax earning.


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## UberHammer (Dec 5, 2014)

chi1cabby said:


> Book $350 in 12 Hours.
> Keep $112 in pre-income tax earning.


Exactly. In NYC where the Uber rate is $2.15/mile, it's possible to average close to $30 in fares per hour like that. For the rest of the country getting $15 in fares per hour is considered good.

If it results in peanuts for NYC drivers at $2.15/mile, then it results in "half of peanuts" for the rest of the country whose rates are half of NYC's. Some are even a third of NYC's.


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## ecmic (Apr 16, 2015)

The paper goes so far as to say:

_It seems reasonable to assume that UberX drivers are not likely to carry FHV-level _
_insurance, as the implied reason for driving rideshare is to enhance one's income._

You hit the nail on the head when you said this raises a credibility issue.

Also, that 68% figure is based on an assumption that a driver grosses $1 per every one mile driven. that sounds super low. I'd guess you'd have to be dead heading around 75% of the time to approach those abysmal numbers.

The paper also assumes the average NYC driver spends 25% of their "work" miles commuting and is driving a brand new 2015 Camry. That seems ridiculous.


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## Backdash (Jan 28, 2015)

ecmic said:


> That seems ridiculous.


Its a bunch of hooey, yup.

Lawrence Meyers
http://seekingalpha.com/author/larry-meyers
http://townhall.com/columnists/lawrencemeyers/


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## Uberman8263 (Jan 11, 2015)

This article is on the money 90 per cent of the time. It overstates certain items, but it understates the ware and tear of driving in NYC. Front end work is a constant problem, brakes have half the life of brakes in the rest of the country. I did not see any mention of TLC fees also no mention of parking and moving violation tickets you incur in NYC. NYC taxis used to be Crown Vics which came with a heavy duty police package, no way a Camry will reach 200k in NYC.


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## TransportJourno (Jun 10, 2015)

This is Lawrence Meyers, author of the White Paper. I want to first address that, yes, I mistakenly said that UberX Drivers do not need FHV insurance, which is wrong.
I have revised and corrected that information in the paper.
For others here who have criticized the work, please offer constructive criticism by challenging any individual assertions. Blindly dismissing the work doesn't give you much credibility.


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## Backdash (Jan 28, 2015)

I don't know if you are Lawrence Meyers. You do realize that I could say I'm the King of Siam.

Considering that the white paper is titled "Towards a Cost Estimate for a NYC UberX Driver", page 24 "Insurance risks of the UberX Driver" is in no way specific to NYC. That section is inaccurate in regards to NYC TLC regulations.

Section 10 does include the correct insurance information. Section 24 while accurate for some or most areas outside NYC, should not be included in the discussion since it is not relevant to NYC.


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## TransportJourno (Jun 10, 2015)

That's all well and good, although yes, I am Lawrence Meyers. But I'd like to move off the insurance matter for now and get people's reactions to the costs, which is the point of the paper.


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## ecmic (Apr 16, 2015)

The 3:1 work miles to commuting miles ratio seems way too low for the average UberX driver, though I don't know if anyone tracks data to prove or disprove it.


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