# Grand Rapids-MI, fledgling market to incur rate reductions of 22%



## optyman (Apr 23, 2015)

Uber Grand Rapids, MI just announced that effective today at noon, UberX & UberXL fares will be reduced 22%. They claim that when they did the fare reduction earlier this year, that ridership and hourly fares went up. We are still a relatively new market, and I feel that there were underlying circumstances that contributed to that (i.e. increased ridership due to service knowledge). Now, fares are $1.25 base, $0.75/mile, $0.15/minute. Factoring in the government specified driver's tax deduction of $0.575/mile, one is making pennies per mile after Uber's cut. As an example, on a 4-mile 5-minute fare, this is what you get and expend:

Revenue:
$1.25 Base
$3.00 Mileage (4 miles @ $0.60/mile)
$0.75 Time (5-minute @ $0.15/minute)
--------
$5.00 Total Revenue

Expenses:
$1.00 Uber Safety Fee
$0.80 Uber Cut (20% after Safety Fee deduction)
$2.30 (Tax Deduction @ $0.575/mile [gas, wear and tear])
---------
$4.10 Total Expenses

Net Profit ($5.00 less $4.10): A whopping $0.90 (and this does not include the time and mileage arriving at your pickup location). If you traveled more than 1.5 miles to your pickup location, you lost money! This also does not factor in "downtime" when you are sitting waiting to be pinged.

Notice that the so-called "safety fee" that Uber collects did not change and is still $1.00/fare.

Wow!


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## Kalee (Feb 18, 2015)

Since the rate decreased here in January, the 25% decrease in rates led to a 60% decrease in my weekly pay. Even though Uber math said the decreases would lead to higher earnings.
Uber continues to use that lie.
Welcome to the club.


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## optyman (Apr 23, 2015)

Uber is touting this as a "temporary" measure, with no expiration date. Any situations where they actually returned to previously higher rates, or is this just another ploy?


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## jiwagon (Feb 19, 2015)

Uber is garbage


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## Oc_DriverX (Apr 29, 2014)

optyman said:


> Uber is touting this as a "temporary" measure, with no expiration date. Any situations where they actually returned to previously higher rates, or is this just another ploy?


Ask someone in San Diego. I think their rates returned to $1.10/mile.


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## optyman (Apr 23, 2015)

When does it make sense to relinquish a fare? I saw that one indicated if the fare is more than 5 minutes away, ignore the ping. I may agree with this reasoning, based upon this latest actual fare with the most recent reduction in fares. I guess the real question is if you are spending more than what the government allows you to deduct, does it really make sense to participate?

The Math.......

Time to Pickup:
9m
Distance to Pickup: 6.1 Miles

Fare Time: 13m
Fare Distance: 7.1 Miles

A. Fare Total: $9.33
B. Less Safety Fee ($1)
C. Less Uber Cut (20% $1.66)
Net Revenue (A - B - C =): $6.64

Expenses (based upon tax deduction of $0.575/mile:
D. Pickup Expense (6.1m * $0.575): $3.51
E. Fare Expense (7.1m * $0.575): $4.08
Net Fare Cost (D + E = ): $7.59

As you can see, I just lost $0.95 on this fare when taking into consideration the mileage deduction for both the pickup mileage and the fare mileage. Does nto take into consideration returning mileage back to my "hot spot".

Time to screen pings?


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## Taxi Driver in Arizona (Mar 18, 2015)

At $0.75 per mile, you're literally working for nothing.


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## Brady (Oct 6, 2014)

Taxi Driver in Arizona said:


> At $0.75 per mile, you're literally working for nothing.


I wouldn't say it's working for nothing but it is now working for well below the state minimum wage once business operating costs are factored in. My operating costs (depreciation, gas and maintenance) were 32 cents on every dollar earned before the recent rate cuts. Now, they're 42 cents on every dollar earned once the additional miles are calculated to earn the same wage. As a result, I'm significantly decreasing my driving in Grand Rapids to only higher guarantee hours and typical surge pricing times and driving instead on weekends in Chicago where hourly compensation is significantly higher. I'm driving a pre-owned Toyota Prius. People with higher value vehicles getting lower fuel economy are making significantly less.


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## Lidman (Nov 13, 2014)

optyman said:


> Uber is touting this as a "temporary" measure, with no expiration date. Any situations where they actually returned to previously higher rates, or is this just another ploy?


In the past two years uber has been true to its word when they say the "whatever rate" is temporary. Meaning that whatever rate it was reduced too, (was temporary) and that eventually the rate was cut further and further.


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## Fauxknight (Aug 12, 2014)

A few cities rebounded after winter, primarily places where the rates dropped so low they lost nearly all their drivers (KY).


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## TimmysUberCar (Mar 31, 2015)

Your math is effed. You tell me you put $2.30 worth of gas and wear and tear on your vehicle on a 4 mile drive??


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## optyman (Apr 23, 2015)

You need to factor in empty arrival time and mileage, and empty return time and mileage back to the hot spots. If you are lucky, you'll get a return fare.


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## Raider (Jul 25, 2014)

If all drivers would wisen up and not drive at these shitty rates uber will be forced to raise the rates. Even the riders would want to raise the rates so that they can reliably get a car without getting dicked around by smart drivers.


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## Like...are you my uber? (Jun 11, 2015)

I one star every employee I drop at uber headquarters in SF because they implement these policies. It's my only revenge.


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## America (Jun 8, 2015)

I seriously dont know how you guys do it. $.75 cpm is stealing money from you and making you sacrifice time and effort to have it stolen. In Grand f'in Rapids, too? What's the surge like there? 1.5x before all the drivers lose their collective shit and descend like locusts into the surge zone effectively ruining it? 

That's crazy. I dont keep up too much on the goings on outside of Illinois and NW Indiana, so I didn't know they were actually willing to go that low. ****ed up.


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## Dierwolf (Oct 31, 2014)

Welcome to the world of Uber where down is up and up is down, where lowering the rates will raise your income. They did the same thing to us here, we are a collage town with 35 to 40 thousand students, unfortunately the same week Tech let out Uber dropped the rates 20%. Talk about getting kicked in the nuts, went from making $500 a week to $100 over night. "Oh you will make more money" Uh no, not when 95% of my clientele just left town for the summer. Tried to tell them that but of course, we're just the drivers that drive day in, day out in this town so what the hell do we know compared to some jackass behind a desk 1500 miles away.


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## optyman (Apr 23, 2015)

Just noticed on the rider app that Uber just lowered fares for a couple of surrounding cities around Grand Rapids (Kalamazoo [yes, in the songs] and Lansing, Michigan) by 33% and 20% respectively. I wondered why these city fares were higher, but realize they just hadn't caught up to Grand Rapids yet. Now we all are the next best thing to a bus fare.


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## MKEUber (Aug 20, 2014)

optyman said:


> Uber is touting this as a "temporary" measure, with no expiration date. Any situations where they actually returned to previously higher rates, or is this just another ploy?


They rarely if ever return to the earlier rates. They will bump the rates back up after a while in some cases, but it will only be a percentage of what was originally cut.


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## Jarhead (Aug 25, 2015)

Reading all these posts makes me second guess if I really want to do this. I'm in the Grand Rapids area and am currently waiting for my background check to be completed. Is there really no money to be made in this?? Any advice or suggestions would be extremely helpful!!


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## MKEUber (Aug 20, 2014)

Jarhead said:


> Reading all these posts makes me second guess if I really want to do this. I'm in the Grand Rapids area and am currently waiting for my background check to be completed. Is there really no money to be made in this?? Any advice or suggestions would be extremely helpful!!


If your car is old and already such a POS that you don't care about running it into the ground, then you may be able to clear around $10 an hour after expenses if you work the busy times, but that is about it. But you have to work the busy times, the common misconception of new drivers is that they can just turn on the app any time they want and make money. That simply is not true. There are a lot of hours of the day where you won't get a single ride request.


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## poopy (Jun 28, 2015)

Advice to Jarhead:

Run!

That is all.


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## Yuri Lygotme (Jul 27, 2014)

optyman said:


> Uber is touting this as a "temporary" measure, with no expiration date. Any situations where they actually returned to previously higher rates, or is this just another ploy?


Sorry to crush any hopes you might have left, but the truth is It will NEVER go back to a higher rate.

Six months ago Uber decreased the rate in Orlando from $1.10 to $0.75 without notice, to - and I quote Uber - "beat the winter slump", because we all know nobody is vacationing in Orlando during winter.... well as of today it is still winter.

In the end, all markets will be lowered to $0.75 (except of course highly regulated markets like NYC).

GO FIND ANOTHER JOB/GIG!! Don't delay!


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## Jarhead (Aug 25, 2015)

MKEUber said:


> If your car is old and already such a POS that you don't care about running it into the ground, then you may be able to clear around $10 an hour after expenses if you work the busy times, but that is about it. But you have to work the busy times, the common misconception of new drivers is that they can just turn on the app any time they want and make money. That simply is not true. There are a lot of hours of the day where you won't get a single ride request.


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## Jarhead (Aug 25, 2015)

Thank you for the reply. I drive a 2012 Fusion and I get around 430 miles/tank and about 32-34 mpg.


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## optyman (Apr 23, 2015)

I know that this is almost a year later, but I got a recent notice (earlier this month - April 2016 [see screen shot below]) that in Lansing, MI the rates returned to $1.00/mile. This is my first proof after more than a year that rates can go back up, but ever so slightly. I think that smart college students that also drive for this blood-sucking company in Lansing got out of the business once Uber lowered the rates. Of course, Uber only raised the per mile rate to $1.00/mile from most recently $0.85/mile. Last October, the rates were $1.20/mile. This new rate is only a 17.6% increase from prior (Uber made a mistake stating it was only an 8% increase in the screen print), but this new rate is still down 16% from late last year.

It is astounding that in another nearby market, Grand Rapids, MI, the rates are much lower, and there is no lack of drivers. In Grand Rapids, we must be really dumb! See a new post that I will do on that....


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## Brady (Oct 6, 2014)

optyman said:


> It is astounding that in another nearby market, Grand Rapids, MI, the rates are much lower, and there is no lack of drivers. In Grand Rapids, we must be really dumb! See a new post that I will do on that....


I've been a driver in Grand Rapids since September 2014, about six weeks after Uber started in the Grand Rapids market. We have had two rate cuts since then, a cute down to $1/mile in January 2015 and a cut to $.75/mile in April 2015. Grand Rapids was not impacted by 2016 cuts that affected other Michigan markets.

I am also a Uber driver in Chicago. I was activated in Chicago shortly after the first Grand Rapids rate cut in January 2015. Back at the time, rider demand and surges were much more common in Chicago than Grand Rapids. Over the past year, rider demand in Grand Rapids has grown to the point that Grand Rapids drivers are now receiving ride requests as frequently as Chicago drivers during the majority of the week. Surge rates in Grand Rapids are now much more common and often exceed those in Chicago. Lansing is very dissimilar from Grand Rapids and Chicago in that demand is far lower, rides are shorter, and demand is seasonally affected by college schedules much more so than in other cities.

The key to driving in Grand Rapids is using an Uber efficient vehicle (high MPG and low depreciation and maintenance costs), and driving during the right times of the week in the right areas to maximize revenue while minimizing mileage and time spent online. Most of the drivers I see complaining are doing dumb things like using a poor vehicle for Uber, driving evenings when there are many other drivers out and downtown where there are a lot of minimum fare rides.


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## optyman (Apr 23, 2015)

So you are saying that you are fine with the rates as they are? That the new drivers getting even lower rates are just complainers. I have not been driving as long as you, but am short by only a few months. I 've also driven in every city in Michigan except K-zoo. The key to driving today in GR is by not accepting 100% of your fare requests (push that 80% acceptance rate to the limit), go online when there is a surge and off when there is not, stop driving when it gets too crowded and you aren't getting any requests. Driving only during bar closing times has gotten even tighter nowadays, as the high surges used to be from about 1:45Am to 2:45AM, now it lasts only from 2AM to 2:30AM, and the surges are not nearly as high as they used to be. I'd be lucky to get two good back-to-back surge fares during that time frame. Mind you, a 2.0 surge today is essentially a 1.0 surge back in January, 2015. That is what I tell my customers that are reluctant to accept a surge rate. 

Uber will continue to squeeze more and more out of it's drivers until the drivers state that they have had enough. I suspect that Lansing drivers did just that.

Yes, there are more fares as Uber promised there would be, but now there are more drivers and since the rate cuts, the surge is not as meaningful as it used to be.

Just call me a complainer, but a complainer with facts behind him!


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## Brady (Oct 6, 2014)

optyman said:


> So you are saying that you are fine with the rates as they are?


I'd love for rates to be $10/mile and $2/minute if there were no impact on supply and demand. But that's not realistic.

If you think there are a lot of drivers now and the surges aren't high enough and for long enough, it would be much worse if rates would be increased back to what they were a year ago. You'd would see a lot more drivers out and even less riders willing to take a ride at surge pricing. I've driven back when we routinely waited 45 minutes on average between rides. Now, I average 3 rides an hour. In Lansing, many drivers have a problem getting two rides in an hour during peak guarantee periods. Lansing is very different as a market from Grand Rapids.

I see drivers ***** all the time about "fake surges" because they aren't getting requests when they drive into an area at a 2.2x and then the surge goes away. They apparently have no understanding of the concept of supply and demand. Complaining is pointless. Instead, you need to adapt to the economics and develop a strategy that will work for you. If you can't make driving Uber worth your time, don't do it.


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