# Why is the per-minute rate so low?



## CTridz (Feb 20, 2017)

The per-minute rate that is part of the fare calculation is ridiculously low in my opinion. In the market where I drive, it is 10 cents per minute before uber takes its 25% cut. That works out to about $4.50/hr. When passengers ask the driver to make a stop along the route of travel, we are only getting $4.50/hr for the time we spend waiting. That barely covers the cost of the gasoline that is burned during the same period of time if the car is kept idling to maintain a comfortable interior temperature. Ride Austin (which I consider to be the gold standard) charges $0.25/min for time on a standard vehicle and up to $0.50/min for a luxury class vehicle. If uber took a 25% cut of $0.25/min, that would amount to about $0.18/min or $11.25/hr going to the driver. That way, drivers would still be making a small profit even when waiting around for a passenger to do whatever they need to do.


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## entrep1776 (Nov 3, 2016)

Because Uber said so.


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## CherylC (Dec 5, 2016)

It's .13¢/min here and this is what Uber thinks a drivers time is worth.


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## Jagent (Jan 29, 2017)

And this is why no one waits on pax or takes them through the drivethru. Uber thinks super cheap rates help their business, but in reality it results in horrible customer service.


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## charmer37 (Nov 18, 2016)

Exactly, That's one of the reasons the uber platform is going down hill, When uber don't pay drivers enough money customer service suffer and passengers have a not so good experience. Cheap rates equal cheap customer service, As rates decrease good service goes along with it.


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## Lee239 (Mar 24, 2017)

CherylC said:


> It's .13¢/min here and this is what Uber thinks a drivers time is worth.


They actually think a driver's time is worth 13 cents an hour.


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## Greguzzi (Jan 9, 2016)

It's almost certainly some percentage of the minimum wage in your state. In Uber's mind, you are a minimum-wage burger-flipper whom they cannot wait to replace with a self-driving car. Once you realize that, it all starts to make sense, and it frees you to game their system


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## Mars Troll Number 4 (Oct 30, 2015)

Greguzzi said:


> It's almost certainly some percentage of the minimum wage in your state. In Uber's mind, you are a minimum-wage burger-flipper whom they cannot wait to replace with a self-driving car. Once you realize that, it all starts to make sense, and it frees you to game their system.


No it's not...

the Orlando rate is 11c a minute rate with 8 going to the driver which translates to $4.20 per hour or way way way less than minimum wage.

These rates are not set with minimum wage in mind


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## Lee239 (Mar 24, 2017)

Greguzzi said:


> It's almost certainly some percentage of the minimum wage in your state. In Uber's mind, you are a minimum-wage burger-flipper whom they cannot wait to replace with a self-driving car. Once you realize that, it all starts to make sense, and it frees you to game their system .


Federal minimum wage is about $8 an hour. Uber does not care about minimum wage which is why I mad one ride yesterday with 5.5 hours online and made about $1,20 an hour. You are an independent contractor and immune from minimum wage laws.

Their fares and per minute rates must be based on the local taxi rate but 1/3 or less of their rate.


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## wk1102 (Dec 25, 2015)

Here's the thing, the per minute isn't a wait time in the sense that you're talking about. The per minute rate runs regardless if you you are sitting do r an hour or traveling 70 mph. 

The per minute is just to slightly increase the rate. It's the perception game, kind of like how retail stores price items $9.99 instead of $10.00. You basically wait for free at your discretion. Do not look at the per minute as wait time, it's part of the fare. .95/.15 @ an average speed of 30mph =1.25/mile - 20/25% =1.00/.94mile. Any wait is free.


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## jfinks (Nov 24, 2016)

Greguzzi said:


> It's almost certainly some percentage of the minimum wage in your state. In Uber's mind, you are a minimum-wage burger-flipper whom they cannot wait to replace with a self-driving car. Once you realize that, it all starts to make sense, and it frees you to game their system .


Ain't no one getting replaced by self driving cars any time soon. 5-10 years maybe.

I do think in very select markets and certain parts of cities in those markets there will be some self driving cars in 1-2 years.


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## Greguzzi (Jan 9, 2016)

Lee239 said:


> Federal minimum wage is about $8 an hour. Uber does not care about minimum wage which is why I mad one ride yesterday with 5.5 hours online and made about $1,20 an hour. You are an independent contractor and immune from minimum wage laws.
> 
> Their fares and per minute rates must be based on the local taxi rate but 1/3 or less of their rate.


LOL.



Mears Troll Number 4 said:


> No it's not...
> 
> the Orlando rate is 11c a minute rate with 8 going to the driver which translates to $4.20 per hour or way way way less than minimum wage.
> 
> These rates are not set with minimum wage in mind


Based on. Some achieve it. Some don't. You apparently don't.


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## Cableguynoe (Feb 14, 2017)

Lee239 said:


> They actually think a driver's time is worth 13 cents an hour.


They probably do. but it's actually 13 cents a minute


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## Lee239 (Mar 24, 2017)

Cableguynoe said:


> They probably do. but it's actually 13 cents a minute


Minus 25% and less in some other markets.


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## jfinks (Nov 24, 2016)

The time factor isn't there to create income, it is just a buffer to smooth out traffic situations. Sure it does create some income, but is a small percentage compared to the milage.


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## Lee239 (Mar 24, 2017)

Also its' not really a waiting time rate which is what they should have in case someone wants to make a stop or go thru a drive thru, it's part of the calculations per mile and per how long it will take to go there as far as how much Uber will charge the pax.


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## Mars Troll Number 4 (Oct 30, 2015)

Greguzzi said:


> LOL.
> 
> Based on. Some achieve it. Some don't. You apparently don't.


Ok let's go from the swan Hotel in Orlando to Kennedy space center visitor complex. Let's assume 20c a mile in operational costs...

1 hour 61 miles on the uber clock, for a grand total of $50-65 on uber.. let's call it 60.

Let's assume 10 minutes total to load/unload/waiting for them to walk outside...

1.16 hours
$60
62 miles at 20c a mile
$12.40 in mileage expenses
$2.20 in booking fees
$14.40 in ubers cut...

Leaving you with...
$31 for 1.16 hours or $27.41 an hour, with perfect efficiency...

Not bad math...

But I just want to go home and I don't know the area, so i turn around to go home...

-2.25 in tolls
-12.40 in mileage

$12.76 for 2.16 hours or...

$5.90 an hour...
IT ISN'T JUST ME

Let's compare this in a taxi

$175 fare
-$5.50 in tolls
-$5 in gas
-$73 in cab lease fees
-$8 in credit processing (5%) (or not)
15% tip +$25

$83-$106 in profit assuming It's THE ONLY fare i have the entire shift is the above that nets $12.76 to an uber driver.

Something is wrong here...


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## jfinks (Nov 24, 2016)

In a changing market are there enough of those $175 fares to go around for all cabs drivers?

I imagine if pax were given a tipping platform or suggestion a 20-30 tip would help out some for the uber.


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## Cableguynoe (Feb 14, 2017)

jfinks said:


> In a changing market are there enough of those $175 fares to go around for all cabs drivers?
> .


Not anymore. Why would they take a taxi when uber is so freaking cheap and probably be there faster than a taxi


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## Greguzzi (Jan 9, 2016)

Mears Troll Number 4 said:


> Ok let's go from the swan Hotel in Orlando to Kennedy space center visitor complex. Let's assume 20c a mile in operational costs...
> 
> 1 hour 61 miles on the uber clock, for a grand total of $50-65 on uber.. let's call it 60.
> 
> ...


LOL.


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## Mars Troll Number 4 (Oct 30, 2015)

jfinks said:


> In a changing market are there enough of those $175 fares to go around for all cabs drivers?
> 
> I imagine if pax were given a tipping platform or suggestion a 20-30 tip would help out some for the uber.


nope but 10-18 miles is pretty common

$14 driver cut after uber fees and tolls Disney to the airport.

$60-$75 for me, (2 of those will cover my daily expenses and put me into profitable...)

UCF to the downtown clubbing/drinking area is $45 in a taxi (2 to break even)
$10-11 driver payout for uberX

Universal studios to Disey is about $10 driver payout for uberX or about $35-45 for a taxi.. (2-3 to break even)

Not exactly "rare" events.


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## Cableguynoe (Feb 14, 2017)

Mears Troll Number 4 said:


> nope but 10-18 miles is pretty common
> 
> $14 driver cut after uber fees and tolls Disney to the airport.
> 
> ...


Those are insane numbers! 
When you can get ride this cheap, it's crazy that anyone would even consider taking a taxi.


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## Mars Troll Number 4 (Oct 30, 2015)

The number i listed are the driver payout... so that would include losing out tolls, the booking fee, and ubers commission.


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## Trafficat (Dec 19, 2016)

10 cents a minute BEFORE Uber cut?

That sucks.

In my market is it is 20 cents before their cut, 15 cents after. That works out to $9/hr which is more than what I make driving due to vehicle expenses, so I prefer to sit and wait.

Minimum wage in my state is $7.25 with benefits or $8.25 without benefits. So it isn't based on minimum wage since in my state wait time is paid more than minimum wage whereas for many of you it is less than your minimum wage including in states where min wage is higher than in my state.

If they ever reduce the wait time pay in my market like in your markets, I'm going to stop waiting.


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## Cableguynoe (Feb 14, 2017)

Trafficat said:


> 10 cents a minute BEFORE Uber cut?
> 
> That sucks.
> 
> ...


Even if you're OK with$9 per hour, isn't it better to finish ride as soon as possible, and hopefully get another one?


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## Trafficat (Dec 19, 2016)

Cableguynoe said:


> Even if you're OK with$9 per hour, isn't it better to finish ride as soon as possible, and hopefully get another one?


Not based on my estimates.

On a typical busy night, I can maybe make $12-18 per hour doing rides, but usually most of that goes into vehicle expenses, because that reflects somewhere between 20-35 miles per hour, which to me I estimate at somewhere around $7-10 per hour in expenses, or about $5-8 per hour effective net pay, compared with the $9/hr I could get by waiting.

And during not-so-busy times, sometimes I might only get a fare per hour or so and my average fare before expenses is less than $9, also.

So basically, I've decided that I'm always better off waiting with the app on than I am driving. If it is busy the vehicle expenses kill any benefit to ending the fare early, and if it is not busy, the chances of losing out on another fare are low anyway so I may as well maximize the amount of time I spend with a person in my vehicle.

In my market, the only way I can see a benefit to ending the fare early is if there is a high surge that happens while you are in mid-ride, or you can reduce your vehicle expenses compared to what I am estimating at about 30 cents a mile. Otherwise the math doesn't work out since during non-surge I'm always making less than $9/hr average due to expenses. Therefore any time spent at $9/hr due to no expenses is raising my average.

I personally haven't seen a surge above 1.5x in a couple of weeks, and even then such surges have lasted about 30 minutes, tops.


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## Mars Troll Number 4 (Oct 30, 2015)

Trafficat said:


> 10 cents a minute BEFORE Uber cut?
> 
> That sucks.
> 
> ...


It won't just be the time they reduce.. it will be everything across the board but the booking fee...that will go up.


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## Cableguynoe (Feb 14, 2017)

Mears Troll Number 4 said:


> It won't just be the time they reduce.. it will be everything across the board but the booking fee...that will go up.


Considering how much of pie UBER takes from each ride, you would think raising fares would be just as profitable to them as raising the booking fee, maybe more


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## Mars Troll Number 4 (Oct 30, 2015)

No it's not..

Orlando rates are

65c a mile 11c a minute



Brevard county fl (Northeast of Orlando)

1.15 a mile 15c a minute

Cocoa beach (Directly east)
1.15
.15

Miami
85c mile
13 a minute



Have any other theories?


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## uberpete (Mar 22, 2017)

Mears Troll Number 4 said:


> No it's not..
> 
> Orlando rates are
> 
> ...


I have a ton of theories. What topic would you like to hear about?


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## Trafficat (Dec 19, 2016)

Maybe each city is an experiment with Uber.... they are experimenting to see how rates effect behavior. For instance, in my market with the 20 cent per minute wait rate, I happily wait. While you guys who get 10 cents per minute wait do not happily wait.

Maybe they are doing some sort of a study to determine the best way to optimize driver behavior.

Kind of like how they allow cash in Denver. Each city is like their own little test tube. 

They probably just try every combination until they figure out what combos are most profitable.

On paper accepting cash is more profitable... but only if they don't lose too many drivers to murders and peeps that quit because they don't want to get murdered, for instance. So they test it in Denver for a year as well as the other couple of cities... control for variables... if they make more than maybe next year every city accepts cash where not legally forbidden. If they make less, maybe they end the experiment or simply stop introducing new cash markets.


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## sidemouse (Apr 2, 2017)

Unfortunately 65 cents a mile isn't a whole lot better...
Some people might think it is but I suspect most of them have not fully realized the true expense of operating a car.


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## Kalee (Feb 18, 2015)

CTridz said:


> The per-minute rate that is part of the fare calculation is ridiculously low in my opinion. In the market where I drive, it is 10 cents per minute before uber takes its 25% cut. That works out to about $4.50/hr. When passengers ask the driver to make a stop along the route of travel, we are only getting $4.50/hr for the time we spend waiting. That barely covers the cost of the gasoline that is burned during the same period of time if the car is kept idling to maintain a comfortable interior temperature. Ride Austin (which I consider to be the gold standard) charges $0.25/min for time on a standard vehicle and up to $0.50/min for a luxury class vehicle. If uber took a 25% cut of $0.25/min, that would amount to about $0.18/min or $11.25/hr going to the driver. That way, drivers would still be making a small profit even when waiting around for a passenger to do whatever they need to do.


Why does Uber set rates so low, you ask?
Answer: "Because we can".
https://www.google.com/amp/s/amp.businessinsider.com/uber-cfo-because-we-can-2015-5


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## CTridz (Feb 20, 2017)

Lee239 said:


> Their fares and per minute rates must be based on the local taxi rate but 1/3 or less of their rate.


That is the horrible thing about this business. Uber trips should be priced at 1/3 to 1/2 of the local taxi rate, IMHO. But, as soon as you have competition like Lyft it becomes a race to the bottom - rates are cut without a second thought. However, I'm not suggesting that it would be better if Uber had a monopoly. I just think that people would still use the service if it cost 1/2 of a taxi fare instead of 1/4 of the taxi fare. But what do I know. I'm just a driver-bot.


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