As carpooling prices skyrocket, Uber and Lyft take bigger bite of the cake

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One weekday afternoon in July, I booked an Uber at my home in Visitacion Valley, a 2.5 mile trip for about $ 17.16. My driver – we’ll call him Ryan – showed me how much he made: $ 7.54.

Uber has long claimed that the amount it takes off fares on average, known as the “take rate,” is around 25% – yet the driver only received 44% of my payment. A quick Google search can quickly bring up screenshots that show this isn’t new, and plenty of media have collected data to better understand business participation rates.

What is new is the growing appetite of ridesharing companies. Not 25 percent satisfied, they now seem to need or want more – often half the fare, and in some cases nearly three times the advertised take rate, based on the end result of 20 recent trips.

Perhaps the most comprehensive attempt to track prior appetite came in 2019, when outlet Jalopnik looked at 14,756 tariffs and concluded that Uber kept 35% of revenue, while Lyft kept 38%. (Uber and Lyft disputed these analyzes but did not provide Jalopnik with datasets upon request demonstrating otherwise.)

However, as the supply of carpooling drivers declined and prices skyrocketed, the split became unseemly. The driver’s remuneration is determined by a base amount, the duration of the journey, its distance and the price of the potential surge, as well as incentives such as making a certain number of journeys within a period of time – and is do not determined by what customers pay.

We decided that another attempt to track corporate take rates was in order. Mission Local booked 20 trips in San Francisco with drivers who shared their pay for our trips. Drivers said demand was indeed back and prices were higher, but none said they noticed higher pay per ride.

Unscientific sampling showed that over 10 trips, drivers with Uber averaged 56% of what I paid; out of 10 with Lyft, drivers average 47% of what I paid. Of the 20, drivers took home an average of 52% of what I was billed.

Mission Local booked 20 trips and noted the number of drivers. On average, drivers pocketed 52 percent of what was paid. (Graphic by David Mamaril Horowitz)

To calculate how much Uber and Lyft are making, there are certain fees that need to be considered.

For Uber, airports aside, their share comes after city tax at around 3.25%, typically less than a dollar in San Francisco.

Lyft does not show drivers a per-trip charge breakdown beyond what they do. In an email, the company explained that it had replaced drivers’ single-trip breakdown with a weekly snapshot of how much drivers pay per week. They do this, Lyft wrote, to highlight aggregate income and information rather than individual ride details, which the rideshare company says can be misleading.

Unaccounted money

One of my Uber drivers, PJ, showed me on his phone that he was being paid $ 11.47 for a 10 mile ride.

He was given access to a cost breakdown that showed a driver’s salary of $ 11.47, an Uber service commission of 44 cents, and city fees of 59 cents, all representing a “customer price” – 12.50 $.

But wait my The Uber app reported that I paid $ 15.79, or about 26% more Huh? That would have given Uber $ 3.73 – not the above 44-cent service commission.

A comparison of my Uber app with that of driver James Allen which shows a deviation from the amount I paid. We made two trips together, the first shown here and a second described in the article. (Video by David Mamaril Horowitz.)

In five out of five Uber trips where the drivers accessed the price breakdown, I paid Uber more than the amount Uber showed the drivers that I paid. What I paid was 19.6% -26.3% more than what the driver said by Uber. That would be about $ 3 more per trip.

In five out of five Uber trips where the drivers accessed the price breakdown, I paid Uber more than the amount Uber showed the drivers that I paid. What I paid was 19.6% -26.3% more than what the driver said by Uber. That would be about $ 3 more per trip. (Graphic by David Mamaril Horowitz.)

Eric Dryburgh, field director of the rideshare advocacy organization Rideshare Drivers United, said he saw or heard of five or six such cases.

But keeping track is difficult, as drivers typically don’t ask to see drivers’ phones, he noted.

Three drivers who have been with the company for several years commented on the missing money, and their response was the same: From their experience, this is not surprising. Added driver with over 15,000 trips: “I’ve always known things aren’t always what they seem.”

Uber did not explain the price difference after three email requests for an explanation.

Zahid Arab, a regional public affairs representative for Uber, answered further questions, confirming how drivers are paid. He added that “Uber’s median turnout has stayed the same” at around 25%.

Arab also tied a Twitter feed from company CEO Dara Khosrowshahi disputing the narrative that drivers did not get a bigger discount as travel costs rose.

But the drivers on the 20 trips we took certainly weren’t getting a bigger cut – Uber was getting it.

A follow-up question again asking for missing money was not answered; this article will be appended if and when it is.

High service fees

Back to corporate take-out.

Looking at the last 30 trips on driver James Allen’s Uber app, it looks like the company took an average of 24.7% per trip.

This would be in line with Uber’s calculation of 25%, but it also uses the inaccurate customer price that Uber has consistently shown drivers on our trips.

As an example, if Allens’ claim is to be believed, he kept $ 12.33 of the $ 16.46 Uber reported as billed, or 75% of my payment. Still, I paid $ 19.76, or 62.4% to the driver, 34% to Uber, and 3.6% to the city.

If we assume that the money from the gap went to Uber – where else could it go – and subtract the city fee by about 3.25%, the company pocketed an average and median of 42% in the trips I have taken. In a single tariff, its share was equal to or less than 25 percent, and that was exactly it.

On the average I was getting at the time, Allen, a driver rated at 4.99 with over 4,000 rides, said, “I just want full transparency on how much Uber is taking. They have a lot of overhead, so I’m okay with them taking a 25 percent cut, but I just want to know what the numbers are.

James Allen, an Uber driver rated at 4.99 with over 4,000 rides, poses for a photo. He said he was grateful for the work Uber provided, but hopes to see more transparency on how much the company is taking per trip. Mission Local found a discrepancy between what Uber tells drivers a customer pays and what customers actually pay. (Photo by David Mamaril Horowitz)

Rondu Gantt, an Uber and Lyft driver for the advocacy platform Gig Workers Rising, said he has long been known for high turnout.

The Bay Area driver said 10 to 20 customers have complained this year about the price of his ride, which he will ask how much they pay.

Usually when this happens, Gantt says, less than half the price goes to him, and about half the time he gets a third.

“The fact that two-thirds are going to Uber or Lyft feels like a seizure of money that doesn’t seem intuitively just to drivers or drivers,” he said.

The problem is something that Eric Dryburgh of Rideshare Drivers United has said drivers disagree with.

“Drivers are very confused at this point even what the commission is,” he said. “We spoke to the drivers, and what we heard from the drivers is that… the fares that the passengers pay are much higher than the actual payment that the drivers receive.”

A driver who asked to be called Molhado, who has worked for both companies for about seven years, also wants to know, so he frequently asks customers about their rates. He said that from what he noticed, companies kept about 50% of almost all the trips he asks about, and sometimes 60 to 70%.

“All the time they are changing the prices, sometimes customers are complaining, ‘Why are they charging me double or triple? ” “, did he declare. “Not for me – for me it’s regular.”

He dropped me off and we checked our rates: he got about half.

“Does that sound like 25% to you?” ” he said.

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