Today saw the release of a fascinating White Paper on driving for UberX in New York. It is bad news for UberX drivers and great news for the taxi medallion financial business. “Towards A Cost Estimate of A NYC UberX Driver“, by Lawrence Meyers, provided some crushing data for UberX drivers.
According to the paper, which broke down an UberX driver’s expenses, the cost is 37 cents per mile. When added to the 20% Uber commission, the 8% sales tax in NYC, and 2.5% Black Car Fee, an UberX driver loses 68 cents on the first dollar-per-mile of revenue.
It isn’t much better as revenue increases. Even at $2 per mile, which I doubt most UberX drivers make in NY, they still lose 49% of revenue. These numbers don’t even include taxes!
This confirms what I’ve always suspected, which is that driving for Uber is not such a great deal after all, and that anyone who thinks they are just milking an asset they already have for cash isn’t seeing the whole picture.
There are other conclusions that are also good for the taxi medallion financial industry. The paper also talks about how most UberX drivers are under-insured, and that if they have an accident when not carrying a passenger, they are on their own. The big scare is that insurance companies are going to find out that the driver does rideshare, and can cancel the policy, even if there was an accident when the app is off.
There is also data showing the average driver is 50% more likely to cause an accident that a professional driver, i.e. a cab driver.
The taxi medallion financial industry has been getting a lot of bad press from short-sellers and CNBC, but this is the kind of data that should wake them up to a few realities.
I suggest you read “Towards A Cost Estimate of A NYC UberX Driver” by Lawrence Meyers if you in the taxi medallion financial business, drive a cab, or are thinking about (or driving) for Uber.