# Why Uber Is A Scam - Math Explains



## Enriquillo (Jan 11, 2015)

Math Explains Why Uber Is A Scam (click for video)





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Ok so I was looking at this graph put on Uber's website today and thought it looked too good to be true. How amazing that Uber drivers make more than any other type of driver. 
But I knew from my own experience as a rider that Uber didn't cost that much. In fact, Uber is pretty cheap if you're a passenger. 
Sooooo&#8230;. how can uber be so cheap, and yet the drivers make so much money???

Now Uber has cut pay to drivers in Detroit to 24cents a mile , but we're going to stick to the 90c for now. 

Uber takes 20% of the total fare from the driver for older drivers. Newer drivers get 25% taken. 

So we're down to 67.5c per mile. 

Then you have to deduct tax: 
In some LA County's, sales tax is as high as 10%, and Uber doesn't withold taxes for you. The drives are responsible for keeping this money aside to pay the tax department in April. 

So with the 10% deducted, we're down to (just over 60 cents) 60.75c

Now we need to factor in depreciation of the car. A car is an asset like anything else, and will eventually wear out and you'll have to buy a new one. Every mile you drive decreases the value of your car and brings you that much closer to needing a new one. This is a big problem if you drive for a living, you're going to need to buy a new car every two or three years and the cost of a new car is significant. 

The IRS estimates vehicle cost to drive a vehicle for work at $0.54 a mile . 
Broken down into 
Fuel costs @ an average of 12c per mile 
Depreciation at $0.24c per mile. 
Repairs, tyres, & maintainence at 9c per mile
Insurance, licence, registration, finance, fees - average out to around 9c per mile

So with 54c depreciation, repairs, and fuel accounted for, we're down to just over 6c per mile that actually goes into your hands of drivers. 

Given that Uber also asks its drivers to buy things like bottles of water, gum, and chargers for it's passengers, we can say for certain that driving for Uber pays well below minimum wage or even worse, costing drivers money (as is seen directly in this actual fare uber charged one of it's drivers). 

So given the math is so bad, why does anyone drive for Uber?
Here's an example of a post an Uber driver posted - he was $400 behind on the rent, and needed to make up some quick cash. In a way, uber is kind of like a loans scheme. 

Now for some people in desperate circumstances, what Uber's offering might be an acceptable deal. But for most people, driving for Uber is a waste of time. I wish Uber would be more honest with people. By our calculations, the amount you're making as an uber driver is nowhere near $19 per hour. If you drive 30 miles per hour at 6.75c per hour, you're only making $2.00 per mile - by far the worst choice of any transportation job. 

This number is supported by Not Cool Uber, who have tracked hourly earnings to be around $2.89 and, after vehicle fees are taken into account, $0. 

Now - I'm not against car pooling. We all need transport, and I know I am a frequent user of Uber & Lyft. But I think that Uber is going about it in an unethical way, which makes me unethical for supporting them as a customer. 

Uber could easily fix this situation : by reducing their commission, by making rates more reasonable, by giving riders the option to Tip their drivers, or just by being transparent. But that would mean admitting that they've generated significant revenue from effectively exploiting their drivers. So the truth is, Uber benefits from maintaining this status quo. Uber is currently reported to be making $10 billion in revenue per year - and that money has to come from someone. 

Just don't let that someone be you.


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## Lando74 (Nov 23, 2014)

Her math is wonky. She assumes the IRS deductible as a cost, not a tax credit. Smart drivers can use mileage to pay very little tax. Each vehicle has different total operating costs, older cars have a much lesser degree of depreciation, albeit more repair and maintenance costs. Insurance cost would be incurred whether or not we drove uber. It doesn't go up with mileage unless you have a hybrid policy, and even then you would only consider the added expense. Not every market charges drivers sales tax. Her example of a 61¢ net fare is probably a glitch - I've had the same type of glitch on that screen but the actual amount paid was correct. She also doesn't factor surge pricing. If you took only surge in LA, you would be making much more than 90¢/mi. She assumes flat pricing 100%.

This video is hyperbole or just insufficiently researched. There are likely drivers who aren't making nearly as much as they think they are, but you'd have to drive 10 minutes for each fare & every fare would have to be minimum without surge to make nothing at all.


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## JustPayMe (Sep 26, 2015)

The math is close enough to be considered accurate


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## Lando74 (Nov 23, 2014)

Fupayme said:


> The math is close enough to be considered accurate


Only if you just haphazardly drive around without a care. Drive surge only, wait for 2x. Yes, it's boring and you can feel like you're wasting time. But it's wasting time and miles if you do 60 trips at regular fare when you could've made the same money in 30 trips and driven half the miles. For the month of April I averaged a net billed mile of $1.54 for 280 trips. In my market assuming an average speed of 30mph, I get 64¢/mile at base rate. So I essentially averaged 2.4x for every ride. Yes, the rates suck but you have control of what price you drive for.

Drive surge only, don't roam, don't accept pings from locations likely to produce a minimum fare, turn your car off when parked, use the fuel card to get the discount, fill up after every shift when gas prices are going up, go as low on the tank as possible when prices are coming down. Maximize your income per mile and minimize expenses. Quality over quantity. Master the math, don't be a victim of it.


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## UbieWarrior (Apr 15, 2015)

There is no sales tax for Uber drivers, this video is dumb. She should stick to just making boob videos.


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## Uberboob (Dec 15, 2015)

Lando74 said:


> Only if you just haphazardly drive around without a care. Drive surge only, wait for 2x. Yes, it's boring and you can feel like you're wasting time. But it's wasting time and miles if you do 60 trips at regular fare when you could've made the same money in 30 trips and driven half the miles. For the month of April I averaged a net billed mile of $1.54 for 280 trips. In my market assuming an average speed of 30mph, I get 64¢/mile at base rate. So I essentially averaged 2.4x for every ride. Yes, the rates suck but you have control of what price you drive for.
> 
> Drive surge only, don't roam, don't accept pings from locations likely to produce a minimum fare, turn your car off when parked, use the fuel card to get the discount, fill up after every shift when gas prices are going up, go as low on the tank as possible when prices are coming down. Maximize your income per mile and minimize expenses. Quality over quantity. Master the math, don't be a victim of it.


Any time spent waiting for the surge, even with the app off, is still time on the job and should be factored into your hourly rate. Not everyone can sit in their livingroom waiting for the surge. I try to drive surge only but include waiting time as on the job time.


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## Uberboob (Dec 15, 2015)

UbieWarrior said:


> There is no sales tax for Uber drivers, this video is dumb.


Depends what your state laws are.


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## Lando74 (Nov 23, 2014)

Uberboob said:


> Any time spent waiting for the surge, even with the app off, is still time on the job and should be factored into your hourly rate. Not everyone can sit in their livingroom waiting for the surge. I try to drive surge only but include waiting time as on the job time.


I factor that as well. However the logic still applies. You can either take one $20 trip in an hour or two $10 trips in an hour. Either way the hourly rate pans out and costs are still less.


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## Ubernic (Apr 24, 2016)

Uberboob said:


> Any time spent waiting for the surge, even with the app off, is still time on the job and should be factored into your hourly rate. Not everyone can sit in their livingroom waiting for the surge. I try to drive surge only but include waiting time as on the job time.


You're a business owner, stop counting your hours. You should only be concerned with how much ahead you are after operating expenses and taxes. If you want an hourly job go apply at Target.


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## Ubernic (Apr 24, 2016)

Joan owns a Tommy's restaurant on the corner of 5th and Vineyard and is losing $200 a day. Marcie also owns a Tommy's restaurant, hers is on the corner Grand and Jubilee, she is making a profit of $300 a day.

Joan believes the Tommy's franchise to be a scam, Marcie also has heard many things about Tommy's restaurants being a scam, no one could possibly make money with a Tommy's restaurant. Marcie continues to count her money while every one else tells her she can't because mathematically it shouldn't be possible.

Moral of this story?

You are a business owner, you are responsible for yourself, you need to manage your Uber program properly to make money. Just plugging in the app and waiting for money to pour in is not necessarily going to work well for you, just like simply opening a restaurant on a random corner isn't going to necessarily work well either. Just like with a restaurant, you want a good location where business will be good, go where the money is. Don't try to make a living on non surge X rides unless you are getting some sort of promotion $ as a result.

You know what, nevermind, you're right, it's impossible to profit from Uber, everyone quit please.


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## uber strike (Jan 10, 2016)

uber wants ignorant drivers that do not calculate expenses. uber just wants you to drive and think that your earnings are actually your earnings. that is why majority of uber x drivers are high school drop outs, ex military, and people that do not even know the english language.


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## renbutler (Jul 25, 2015)

Lando74 said:


> Her math is wonky. She assumes the IRS deductible as a cost, not a tax credit. Smart drivers can use mileage to pay very little tax. Each vehicle has different total operating costs, older cars have a much lesser degree of depreciation, albeit more repair and maintenance costs. Insurance cost would be incurred whether or not we drove uber. It doesn't go up with mileage unless you have a hybrid policy, and even then you would only consider the added expense. Not every market charges drivers sales tax. Her example of a 61¢ net fare is probably a glitch - I've had the same type of glitch on that screen but the actual amount paid was correct. She also doesn't factor surge pricing. If you took only surge in LA, you would be making much more than 90¢/mi. She assumes flat pricing 100%.
> 
> This video is hyperbole or just insufficiently researched. There are likely drivers who aren't making nearly as much as they think they are, but you'd have to drive 10 minutes for each fare & every fare would have to be minimum without surge to make nothing at all.


Seriously, we need a hacktivist to get into Uberpeople's system and replace ALL of the hyperbolic posts with this.


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## dnlbaboof (Nov 13, 2015)

what is she talking about sales taxes, even if there were there the rider would pay for them, i think she means payroll taxes. plus business licenses, but some good points in the video.


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## LindaB (May 14, 2016)

In my view, this isn't black & white. The income is better than a lot of min wage jobs out there, and what makes it perfect for those with unpredicatable availability for work (such as you came down with the flu or your wife is in the hospital for a few days or you are a student with irregular schedule, etc) you can totally pick your hours and won't get fired for you or your family getting sick which is really big these days. The pick your own schedule is huge for some. Car depreciation really only counts hugely in the first 2 years therefore if your car is already a couple of years old and gets good fuel economy, then your true expense is much less than someone who buys a new car and uses it for Uber. The mileage tax allowance is set by the IRS and includes fuel allowance, depreciation, maintenance etc. Actual taxable income is likely to end up low at year end after mileage tax deductions, but have to factor in social security payments based on gross.

Ultimately, those who diss Uber apparently make better than poverty wages each year OR work for the taxi industry. Am thinking Uber base rates need to be bumped up a little though for short trips to be lower cost but more competitive with taxi industry. Consumers prefer Uber over taxi because cars are nicer and they can track their driver via app with net less wait time. Win win. No need for Uber in city trip to be less than a beer at the bar riders are being transported to.


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## uberdriverfornow (Jan 10, 2016)

There is no sales tax on service. I'm confident this is anywhere in the US. There may be very rare situations where there is a tax on service but it certainly wouldn't apply to Uber. However, the rest of the math seems atleast close to being accurate.


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## Plethora (May 7, 2016)

None of you are business owners. You work for an employer that wants to avoid the duties of employing people. They set your rates, create the rules and even manage your marketing. You are pawns to an organization that should be investigated by congress for duping so many people and investors too. Their false advertisement and predatory tactics are obvious. They are constantly raising capital to keep these cash negative companies afloat, as they pay the new drivers bonuses to get them on board. Most of their marketing goes to duping their own employees.

I make a six figure income and had several employees sign-up to do this over a county fair weekend. I was curious and they were excited. I could tell that later on they were a bit disillusioned. I went ahead and signed-up and worked two days to test the theory. I worked ten hours and drove 336 miles. In that time, I gave about 18 rides. The net to me after commissions was about $170.00. Wow, I made $17.00 per hour. But wait... two car washes $12.00, gas $46.00, now we are looking at $11.00 per hour. Or, I can use the IRS calculation which is now $57.5 cents per mile. In this case, it cost me with depreciation on my vehicle, $193.20. Darn, now I lost $20.00. Even if I was making minimum wage, I would have to see another $120.00 in revenue. To make the $20.00 per hour guarantee, I would need an additional $320.00 in revenue.

They know this, this is no big secret. This is a predatory business practice. The objective of these companies is to invest as much as they need to, in order to break the local cab companies and supplant them. Then they will raise the prices and cull the drivers herd down. You are basically getting paid to depreciate your vehicle. I am sure that under special and amazing circumstances you can make some money, but this is totally ludicrous. I would describe this as Obamanomics. It is the Bernie Sanders generation trying to be entrepreneurs. Also, this is dangerous work. Crazy people who you drive, accident potential, and the chance of getting a citation make this the biggest loser I have ever seen. Personally, I would not hire Uber, Lyft or any of these services. I feel safer in a cab, or a limo. Some young driver trying to navigate on a cell phone is not my idea of a safe way to go.

Sorry to throw cold water on some of your dreams, but this is reality. These companies really are "the man", they have just hidden it in cool, gitchy garb, so you will not recognize it. I know there are no jobs, so hang in there and let's hope the economy turns around, or maybe just go back to college.

Here is the local cab rate - They charge this for a reason... I do not work in the cab industry or in a transportation field. This is just too obvious.

$2.50 Flag Drop, $0.50 SRA Surcharge
$3.12 per Mile
$24.00 per Hour
$2.50 Airport Pickup
$3.00 Commercial Airport Pickup


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## ChortlingCrison (Mar 30, 2016)

Plethora said:


> None of you are business owners. You work for an employer that wants to avoid the duties of employing people. They set your rates, create the rules and even manage your marketing. You are pawns to an organization that should be investigated by congress for duping so many people and investors too. Their false advertisement and predatory tactics are obvious. They are constantly raising capital to keep these cash negative companies afloat, as they pay the new drivers bonuses to get them on board. Most of their marketing goes to duping their own employees.
> 
> I make a six figure income and had several employees sign-up to do this over a county fair weekend. I was curious and they were excited. I could tell that later on they were a bit disillusioned. I went ahead and signed-up and worked two days to test the theory. I worked ten hours and drove 336 miles. In that time, I gave about 18 rides. The net to me after commissions was about $170.00. Wow, I made $17.00 per hour. But wait... two car washes $12.00, gas $46.00, now we are looking at $11.00 per hour. Or, I can use the IRS calculation which is now $57.5 cents per mile. In this case, it cost me with depreciation on my vehicle, $193.20. Darn, now I lost $20.00. Even if I was making minimum wage, I would have to see another $120.00 in revenue. To make the $20.00 per hour guarantee, I would need an additional $320.00 in revenue.
> 
> ...


I think it was when they had lowered the rates in Detroit to 30cents/mile, I was getting a pretty good idea that maybe uber wasn't on the up and up. But thanks for the editorial.


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## Ubernic (Apr 24, 2016)

Plethora said:


> None of you are business owners. You work for an employer that wants to avoid the duties of employing people. They set your rates, create the rules and even manage your marketing. You are pawns to an organization that should be investigated by congress for duping so many people and investors too. Their false advertisement and predatory tactics are obvious. They are constantly raising capital to keep these cash negative companies afloat, as they pay the new drivers bonuses to get them on board. Most of their marketing goes to duping their own employees.
> 
> I make a six figure income and had several employees sign-up to do this over a county fair weekend. I was curious and they were excited. I could tell that later on they were a bit disillusioned. I went ahead and signed-up and worked two days to test the theory. I worked ten hours and drove 336 miles. In that time, I gave about 18 rides. The net to me after commissions was about $170.00. Wow, I made $17.00 per hour. But wait... two car washes $12.00, gas $46.00, now we are looking at $11.00 per hour. Or, I can use the IRS calculation which is now $57.5 cents per mile. In this case, it cost me with depreciation on my vehicle, $193.20. Darn, now I lost $20.00. Even if I was making minimum wage, I would have to see another $120.00 in revenue. To make the $20.00 per hour guarantee, I would need an additional $320.00 in revenue.
> 
> ...


Lol

I guess bitter cab drivers do exist here. If you aren't making money on Uber, you aren't doing it right, plain and simple.


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## UbieWarrior (Apr 15, 2015)

You can make money in Uber in most cities if you keep your expenses low.


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## Michguy01 (Feb 13, 2016)

On my first day of Uber on about my third trip or so, I realized this was basically a scam. Now I realize it's different in every market, you can make more in some area's that you can in others. For a large percentage of drivers it's simply not profitable, most people are just to dumb to realize it I guess.

In the last 6 months I'd say about 95% of my trips are on surge, it's the only way to make a profit. And Uber is doing all they can to kill that....


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## Undermensch (Oct 21, 2015)

Enriquillo said:


> Math Explains Why Uber Is A Scam (click for video)
> 
> 
> 
> ...


This video is garbage.

54 cents / mile is not what it costs to operate a vehicle.

Check my post for details: https://uberpeople.net/threads/54-cents-mile-usa-driver-truthers-listen-up.78860/


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## UbieWarrior (Apr 15, 2015)

Undermensch said:


> This video is garbage.
> 
> 54 cents / mile is not what it costs to operate a vehicle.
> 
> Check my post for details: https://uberpeople.net/threads/54-cents-mile-usa-driver-truthers-listen-up.78860/


When you do the math the 54c a mile comes out to only 5.4c a mile cash savings you actually get. (10% tax bracket)

Drive 30 miles that is only $1.62 which is less than the cost of 1 gallon of fuel.


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## DieselkW (Jul 21, 2015)

People!! 54¢ per mile is a TAX DEDUCTION, not a cost to operate your vehicle.

Figure it out for yourself. Some cars cost more than others, some people figure they need insurance anyway, so why include the cost of insurance in their vehicle cost calculation. 
Do it yourself. If you're driving 1000 miles a week and your Uber deposit is less than $700 you're driving too many dead miles.

If your Uber car is your mother's and you don't pay anything for it besides gas, you can make money.
If your Uber car is a Tesla and you accept UberX rates, you're an idiot.
If your Uber car is the family mini van you must understand that it will be worth exactly squat after 2 years of 1000 miles a week.

Know your costs. 
Know your income.

Subtract costs from income and Uber only if it makes sense.


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## UberHammer (Dec 5, 2014)

Lando74 said:


> Her math is wonky. She assumes the IRS deductible as a cost, not a tax credit. Smart drivers can use mileage to pay very little tax.


She was talking about sales tax. The IRS has nothing to do with sales tax. State and local governments are the ones who use sales tax as tax revenue. Most Uber drivers don't pay sales tax even though the law says they owe it. New York City is one of the few cities that has implemented a system to make sure Uber drivers are paying the sales tax that is due on the fares.


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## Blake Seven (Jun 11, 2016)

DieselkW said:


> People!! 54¢ per mile is a TAX DEDUCTION, not a cost to operate your vehicle.
> 
> Figure it out for yourself. Some cars cost more than others, some people figure they need insurance anyway, so why include the cost of insurance in their vehicle cost calculation.
> Do it yourself. If you're driving 1000 miles a week and your Uber deposit is less than $700 you're driving too many dead miles.
> ...


I'm sorry, but if you're driving a Tesla whilst accepting uberX requests, you're actually going to make more money. You know why? Because an uberX ride is going to almost guarantee a high rating. While a nice fare is important, the ride itself is equally important. Trust me, riders are both happy and surprised when they get to do an uberX trip in a fancy car versus a beat up Toyota. The only thing that can make them less than appealing is if a driver-partner is in a Tesla who offers shitty service.


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## DieselkW (Jul 21, 2015)

Blake Seven said:


> I'm sorry, but if you're driving a Tesla whilst accepting uberX requests, you're actually going to make more money. You know why? Because an uberX ride is going to almost guarantee a high rating.


Perhaps you can explain how a "high rating" translates to "make more money". That's news to me, since I never got paid for stars. Yeah, I'm sure the over entitled little snots that get lucky enough to have a Tesla pick them up for 80¢ a mile are big tippers as well.

If I had a $70k car to pay for, it would cost me $1200 a month in interest and principle for 5 years. So I could allow strangers in my back seat, for a little more than bus fare, at UberX rates it would take 2 weeks out of every month just to make the car payment. Recharging a Tesla after 200 miles costs about $8, so add another 50 bucks a week in cost.
For UberX rates?

Next time you get a 5 star rating, don't forget not to spend it all in one place.


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## Blake Seven (Jun 11, 2016)

DieselkW said:


> Perhaps you can explain how a "high rating" translates to "make more money". That's news to me, since I never got paid for stars. Yeah, I'm sure the over entitled little snots that get lucky enough to have a Tesla pick them up for 80¢ a mile are big tippers as well.
> 
> If I had a $70k car to pay for, it would cost me $1200 a month in interest and principle for 5 years. So I could allow strangers in my back seat, for a little more than bus fare, at UberX rates it would take 2 weeks out of every month just to make the car payment. Recharging a Tesla after 200 miles costs about $8, so add another 50 bucks a week in cost.
> For UberX rates?
> ...


It's about demand. UberX will ALWAYS get more requests than anything else, pure and simple. And ratings DO ostensibly mean more money. You can have a sweet ass BMW or said Tesla, but if your rating is a 4.4, any savvy rider will cancel your ass and move on. If drivers think they can make shit-ton of money doing strictly SELECT, avoiding POOL , uberX and nothing else, they're crazy. And drivers don't seem to give a shit about ratings until their account is suddenly deactivated because it dropped below the minimum requirement.

And really: no one tells these people to drop $70k to do what's pretty much meant to be a side gig, in the first place. Honestly, some of those drivers-partners are as 'entitled"as the so-called brats you mentioned earlier.


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## DieselkW (Jul 21, 2015)

You can't have it both ways Blake, and a 5 star rating does not require a luxury vehicle - I'm at 4.93 with a 3 year old VW. Those 5 star ratings are because it's clean, it smells good, I carry the conversation, I make them laugh, a ride in my car is enjoyable, both to the bar and back home. Black on black with tinted windows, it's a tiny little Limo I can run for 35¢ a mile.

If you actually think a passenger is going to cancel a driver because of a low rating you are marinated in the Uber Kool Aid. What about the new guy with a dozen rides that had the misfortune to drive a drunk college kid back to the dorms; they think it's "funny" to drunk rate a good driver with a "1". Ha Ha, laugh it up, that guy would give the Tesla driver a 1 for extra funny yuck yuck. 

Personal experience Blake, thousands of rides later, a "1" affects me not one bit, but when I was new, I had a 3 rating over a holiday weekend and not one single passenger cancel. They were surprised I didn't show up on a P.O.S car, but they don't want to "wait for the next one". They asked, I told them some people think "1" is better than "5" when they're blitzed after midnight.

I don't know how long you've been driving, what you're driving, or how many rides you've given. You can't eat a 5 star rating, and if you're letting drunk college kids in your $70k car for less than $1/mile, you're an idiot. There are far more profitable ways to keep your rating over 4.9 without having to drive two thousand miles just to make the car payment.


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