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Comment by taneq | Hacker News Reader

Maybe you can explain something that I've never understood. I see drivers saying "driving for Uber is terrible and a waste of money". I see them saying "after expenses I'm basically working for free." But they keep doing it. They keep driving for Uber even though they know that they're basically just working for free, in order to make money for Uber. If you take vehicle depreciation into account, you're probably not even breaking even.

Why? Why do that? My guess is that it's easy work to get and it gives you some immediate cash, and so it's more appealing than spending the time hunting for a 'real' job, but I've never heard an Uber driver actually admit that.

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The implied social judgment whenever Uber drivers come up is a bummer.

Yes, people prefer to make a little bit of money instead of not having money. This is surprising?

And when someone earns a little bit of money, they might wish that they made more money. Again--not news.

I think before getting critical about why Uber drivers are so dumb, it's worth thinking about why you don't drive for Uber. The answer probably starts with "because I don't feel like I have to." It does for me.

If someone has a great highly-paying full time job and still drives for Uber, then sure, question that person's judgment. Most Uber drivers are not in that situation though.

But the comment you're replying to is saying what's the point in working literally for free or at a loss? Sure, if you're not making much, that's one thing, but actually making zero is what they were talking about.

The post above that one (the actual Uber driver) says that their hourly rate is about $8, not $0.

Nobody wakes up in the morning and says "today I'm going to drive for Uber literally for free." Of course not. Let's use a little common sense here.

Uber drivers expect, plan, hope to make money. The point is, they don't make much, and sometimes it's very little (like on a long fare).

So the question is, then why do they keep doing it? And I'm just suggesting that maybe a lot of them don't have a higher-paying alternative that they are dumbly choosing against.

> I'm just suggesting that maybe a lot of them don't have a higher-paying alternative

This still doesn't make any sense. If you are losing money working for Uber, then you do have access to a higher paying alternative - which is literally standing in your house and doing nothing. Because zero is greater than a negative amount.

I think there are really three explanations that make sense:

People are not literally losing money working for Uber, or maybe they are sometimes but not overall at the end of the month, and they're just rhetorically exaggerating in frustration.

People are literally losing money working for Uber but only when you include depreciation of their car, and that is a long term cost, so people are effectively taking a loan from their future selves.

People are literally losing money working for Uber but morally feel that they should be working rather than not working, even if there is no economic reason for them to do so, and they just hope their situation will improve in the future.

>> People are literally losing money working for Uber but only when you include depreciation of their car, and that is a long term cost, so people are effectively taking a loan from their future selves.

I believe this is it. They need money now, Uber is better than a payday loan but yes, they are mortgaging assets to make some cash now.

A fourth:

People are literally losing money working for Uber but enjoy driving as a hobby, and Uber helps them recoup at least some of the costs of driving around all the time.

(yes, I've had drivers tell me they do Uber/Lyft for fun because they love driving)

I love to drive, and while being a taxi/uber sounds like fresh hell to me, I know I would represent myself as 'driving because I love it' in my shitty ford to save face when I am trading the equity in my car i am still paying off for food in a downward spiral of depression and poverty. People who love to drive, drive sports cars, not taxis.

thank you for being empathetic

They're not making $0. They're trading $8/hr now against the cost of depreciation that they'll be able to "pay" later. Is that short-sighted? Yes. Do people feel like that's necessary when they have looming bills that need to be paid right now? Also yes. It'd be nice if people in that situation could afford to be more future-minded, but that's easy to say when the income from your primary job easily covers your expenses. Not so for many people.

I'm not being judgemental, and I'm not saying they're stupid to drive for a small immediate profit instead of doing nothing.

I'm just perplexed when they say they're losing money (or making so much less than minimum wage that they may as well be) but they keep on doing it instead of stopping. If they're not just blowing off some steam with hyperbole, they would literally be better off staying home on the couch.

> I'm just perplexed when they say they're losing money (or making so much less than minimum wage that they may as well be) but they keep on doing it instead of stopping

Most people don't drive Uber as a job. It's a second or third job. Make-you-own-hours is what makes that possible.

> If they're not just blowing off some steam with hyperbole, they would literally be better off staying home on the couch.

I mean, ditto for payday loans -- you're better off not having the money. Unless you actually need the money to make rent. Then you're screwed.

Uber is better than payday loans, but if you're depreciating your car at a faster rate than you're making money, you're still up against a negative expected value.

Even with -EV on vehicle cost you are gettig cash in hand. -EV long-term, +EV short-term by paying rent.

The same thing is true for payday loans...

If you drive for Uber could you partially count the depreciation of your car (for the miles you drover for Uber) on your taxes? At least then you'd get some benefit in the form of a reduced tax bill that could offset the losses.

Landlords use depreciation to have low taxable income despite being cashflow positive. I don't see why Uber drivers shouldn't be able to. They're making business use of a physical asset (their car).

My understanding is, yes, you can deduct the IRS per-mile (54 cents per mile driven) as a business expense, which will reduce the amount of taxes paid. At least one Uber driver I rode with told me he did this. In fact, not doing it would be missing out on a huge tax benefit!

Example 10-mile trip: 1.25 base fare + (10 miles * 1.15 per mile) = 12.75 * 80% (driver's share) = $10.20 revenue - 5.40 deduction for mileage = $4.80 revenue reported. For somebody in 20% tax bracket, this could yield $1.08 in savings.

Although using the per-mile deduction negates the ability to deduct line item expenses, such as gas, car washes, etc.

I was thinking more like depreciating the value of your car according to whatever depreciation schedule the IRS allows, prorated by the proportion of the miles you drive for Uber.

Something like - your car cost $30,000 and depreciates over 10 years, so $3,000 per year (just making up numbers, no idea if/how the IRS depreciates a car). So you'd have a $3,000 loss in the value of the car per year until it drops to 0. If the car was used 40% of the time for business (driving for Uber) you could claim 40% of the depreciation - $1200. I guess then you'd have to separately itemize all the gas, maintenance, etc.

But if you're actually losing money on the Uber-driving endeavor when that is factored in, whatever revenue you get should be tax-free. Of course, I suppose that only works if you're an independent contractor / business, and Uber drivers fought so hard to get treated as employees instead. Oh well. Employees get screwed when it comes to taxes.

$.40 per mile is not too far off from the federal rate of $.535 per mile, which does include depreciation. This is the number any driver should be using, short of crunching the actual numbers for your vehicle.

https://www.gsa.gov/portal/content/100715

I drive for Uber part time even though it pays literally 8x less than my day job. It's relaxing and gives me an excuse to drive my car while someone else pays for the gas and mileage.

Are you making enough to pay for the new car you'll need after this one wears out?

Given they're basically saying they drive for fun and this is a way to cover some of the costs, that seems kind of moot. Nobody's paying me enough to buy a new motorcycle after mine wears out, but I'm still gonna take it out and ride it.

Yes of course. Looking at my records it's something like $0.65/km driven in revenue, which is well over the $0.54/mile quoted by the IRS for all-in vehicle costs.

Interesting idea! Maybe when Uber finally comes to BC I'll give it a try too.

Because they're exaggerating to put pressure on Uber to give them a better deal. Everyone does this. Waiters, union workers, teachers, actors, firefighters, etc. Complaining makes you feel good and has a small chance of making things better for yourself. Why not do it more.

It's because I can drive for like an hour at 9 PM when the traffic isn't bad anymore and I can make $10 an hour and I can decide when to clock out.

So you are saying it is worth it for you? So that is good?

I haven't done it in months now, I just don't feel like it anymore considering how little I make.

So you're saying it's not worth it for you? So that is bad?

I force myself to get inside my car and start my app. There are no people who want a ride next to my house right now. I may be waiting for some time before I get a request that takes me to San Jose or another populated center. Or at least next to a hotel or something.

I drive around, worrying that I don't get dragged into Los Altos (nobody wants rides OUT of Los Altos late at night - they're all coming home). Sometimes I will drive for a few minutes picking someone up before they cancel. If I didn't get far enough to pick them up I get no money for this. I finally pick up the person and try to make conversation with them. They're not always willing to talk, but I understand.

After driving for a while it gets too late to get too many requests. I start late because driving in traffic is a horrible hourly rate.

I had to deal with app crashes, the maps app being wrong due to changes, people putting the wrong address, people not finding my car and calling me in a noisy place etc. Some people don't like this because they think I'm a full time driver and I'm supposed to know how to deal with these situations. I'm not a professional. I never received any training by Uber. I don't know every single street in your neighborhood. I don't even have enough experience doing it to know how to deal with every situation.

So I would use the odometer to see how much I actually drove (Uber doesn't count picking up as distance - a hold-over from taxi companies). I calculate my profit using the amount of miles, and minutes (I time when I start, not when I make my first pick-up). When I see a single digit number it makes me disappointed yet again. Even when I'm driving at football games it's still more like $12 an hour because of the damn traffic. It's 3x more expensive, but it takes very long to get out of the parking lot and to get into it.

Don't even let me get started on star ratings... giving an Uber driver 4 stars basically says "this person shouldn't be driving with Uber" since the minimum rating is like 4.3

Taking depreciation into account is a red herring unless the car is only used for Uber driving.

There is significant utility in owning a car. So much so, in fact, that many people are willing to take on the entire cost of ownership without ever earning direct income as a result of their driving.

This is not the type of Uber driver I want. I don't want someone complaining about their life choices when I'm paying for an agreed service from A to B.

I've had some drivers straight-up tell me that they enjoy driving for fun, and they drive for Uber/Lyft just because it gives them an excuse to do it. And I'm sure that even if they don't make a profit, driving for Uber/Lyft is less expensive than just driving around and not getting paid at all.

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