Introduction

Hello! I am Randy, better known as 'Uber Man,' and I have been in the rideshare industry for nearly five years. I currently work with Mystro, an Android app company that helps automate driving for ridesharing. In this article, I will delve into the intricacies of how Uber and Lyft drivers are currently compensated and explore a hypothetical scenario of if they were paid per passenger.

Current Payment Models of Uber and Lyft

Uber and Lyft Compensation Structure

In the current model, both Uber and Lyft drivers are paid based on the number of miles driven and minutes spent transporting passengers. The typical rate in cities like Oklahoma City (OKC) is 0.64/mile and 0.11/min, which fluctuates based on demand. Unlike a traditional wage, these payments are only received while a passenger is in the car. This payment structure can be stark and less lucrative than many would imagine, especially given the high costs of operating a rideshare business.

Uber's Extortionist Practices

It's worth noting that Uber is one of the most unethical and greedy corporations in the rideshare industry. In the Minneapolis market, Uber takes 45-69% of every fare. Additionally, there are exorbitant fees for drop-offs or pick-ups at airports, amounting to $3.09 per instance. Drivers also have to pay for airport permits to conduct business, further draining their earnings.

Drivers' Perspective on Pay Structure

Divers who are currently working within the system often wonder why they don't get paid more efficiently. The idea of being paid per passenger sounds appealing as it could potentially increase earnings, but it is essential to consider how such a change could be implemented and the potential pitfalls that might arise.

Hypothetical Pay Per Passenger Scenario

Addressing the Question: Would Drivers Be Paid Per Passenger?

From a theoretical standpoint, if Uber and Lyft drivers were paid per passenger, it could indeed streamline the payment structure and possibly increase earnings. However, it's crucial to understand the potential downsides and how these companies might manipulate such a system to their benefit.

For instance, under a per-passenger payment model, drivers would start earning a fixed amount per pickup, regardless of the number of miles driven. This would eliminate the variability and uncertainty associated with the per-mile and per-minute rates.

Let's take the example of a typical Uber or Lyft ride to visualize this. Suppose a driver picks up a passenger for a short trip of 3 miles, the driver would earn the initial amount for the first passenger, and no further earnings would be generated until another passenger is picked up. In the case of UberPool and Pool Express, the initial setup would be different, as the driver earns an additional 0.60 bonus when a second passenger is picked up.

A Detailed Breakdown of UberPool and Pool Express Payment Structure

UberPool and Pool Express

In the UberPool and the newer Pool Express models, the payment structure works slightly differently. Once the first pool rider is picked up, the driver starts earning the set per minute and per mile rates. For UberPool, this applies even if the pool is a solo rider or a rider plus one. When additional passengers join, the driver earns a 0.60 ‘bonus’ to fetch the next rider. This bonus is the same whether a pool request is a single rider or a rider plus one. Once the car has four passengers, no more riders can be added, and each additional ride earns another 0.60 bonus.

The driver continues to earn based on time and distance from the start of the trip until the last pool rider exits. This can range from a 20-30 minute trip to a longer 90-minute trip as riders come and go. The payment is calculated on a single pay line, which means that the driver's earnings are determined by the duration and number of passengers, rather than the distance driven.

Short Ride Exception

It is worth noting that there is a minimum fare in most US cities, and for short rides, the earnings are the same as for longer distances. If multiple riders join via UberPool, only the additional 0.60 bonus applies.

Challenges and Possibilities of a Per-Passenger Payment Model

Implementing a New Model

Implementing a per-passenger payment model would likely require significant changes to the current system. It would need to be carefully designed to ensure drivers don't suffer financially and that the company doesn't exploit the system. For instance, Uber could implement a cap on driver earnings per minute or per mile once the maximum number of passengers is reached. This would prevent drivers from earning excessively high amounts for short rides.

Consumer Market Considerations

Additionally, the consumer market would also need to be considered. If taxi services lowered their prices to compete with rideshare companies, it could lead to a price war, ultimately hurting both drivers and the companies. A careful balance would need to be struck to ensure sustainable earnings for drivers and fair competition for customers.

Conclusion

While a per-passenger payment model seems like a straightforward and potentially profitable option for drivers, it would be essential to implement it carefully. Uber and Lyft, notorious for their unethical practices, would likely find ways to manipulate such a system to their advantage. It is important for the companies to consider the long-term implications and work towards a fair model that benefits everyone involved.