Why Uber Is A Scam – Math Explains

Why Uber Is A Scam – Math Explains


okay so I was looking at this graph that was put on Ruby’s website today and I thought it looked too good to be true how amazing that uber drivers make more money than any other type of transportation driver but I knew from my own experiences as a rider that uber didn’t cost that much so it seemed weird that uber was really cheap as a passenger but yet uber drivers make so much money how’s that work well we did some math to find out the facts that uber doesn’t want you to know her so here’s the sad truth about the type of driver that is on the road for uber right now this is an image from uber of the rates that drivers make in LA ninety cents per mile now uber has cut paid to drivers in Detroit all the way down to 24 cents a mile but we’re gonna stick to the 90 cents LA example for now so I wanted to calculate how much uber drivers actually get to keep out of that 90 cents per mile let’s have a look so first of all Hoover takes 25 percent of the cut for new drivers drivers that sign on to drive for uber from q3 2015 so now we’re down to 67 point 5 cents per mile then you have to deduct tax because uber doesn’t withhold tax on your behalf so in some la counties sales tax is as high as 10% and since Ruby doesn’t withhold taxes for you the drivers are responsible for keeping this money aside to pay the tax department come April so with the 10% deducted we’re now down to just over 60 cents now we need to factor in depreciation of a car so a car is an asset like anything else and will eventually wear out and you’ll have to buy a new one every mile you drive decreases the value of your car and brings you that much closer to needing a new one this is a big problem if you drive for a living you’re going to need to buy a new car every 2 or 3 years and the cost of a new car is pretty significant the IRS estimates that the cost to drive a vehicle for work purposes is 54 cents per mile and this is broken down into fuel cost at an average of 12 cents per mile depreciation at 24 cents per mile repair tires and maintenance to about 9 cents per mile and insurance license registration finance fees all that stuff averages out to about another nine cents per mile so with the 54 cents depreciation repairs and fuel accounted for we’re now down to just over six cents per mile that actually goes into the hands of an uber driver now given that uber also asks its drivers to pay for things like bottles of water and gum and thrown charges for its passengers we can say for certain that driving for uber pays well below minimum wage or even worse costs drivers money as is seen directly in this actual fare that uber charged one of its drivers so given that the math is so bad why would anyone want to drive for uber so here’s an example of a post and uber driver put on Facebook he was four hundred dollars behind in the rent and he needed to make that money up really quickly and in a way Bubo is kind of like a learned scheme this driver gets four hundred dollars in his hand but he doesn’t realize that come text time he’s gonna need to give some of it to the taxman and he hasn’t factored in fuel costs or the cost of repairs all the cost for buying a new car in the future this is exactly the type of driver that uber wants they’re desperate for cash and they don’t know enough about how uber works to set aside some money for taxes and vehicle expenses for these sort of drivers uber might be a good deal they get cash in hand today and sure you’re going to need to pay some of that back in Texas and car costs but you get immediate cash to solve your immediate needs so who cares so for some people in desperate circumstances that six cents a mile that uber is offering might be an acceptable deal but for most people driving for uber is a waste of time I wish urbe would be more honest with people by our calculations the amount you’re making an hour driving as an uber driver is nowhere near $19 per hour if you drive 30 miles per hour at six point seven five cents per mile you’re only making $2.00 per hour by far the worst choice of any transportation job and this number is not just my maths it’s also supported by the sight not cool uber who have tracked hourly earnings to around two dollars and eighty nine it’s per hour and after vehicle fees are taken into account that number is around zero now I’m not against car pooling services we all need transport and I know that I’m a frequent user of uber and lyft but I think goober is going about it in an unethical way which makes me unethical for supporting them as a customer uber could easily fix this situation by reducing their commission or by making rates more reasonable or by giving riders the option to tip their drivers like we do in hospitality or just by being more transparent but that would mean admitting that they’ve generated significant revenue from effectively exploiting their drivers so the truth is uber benefits from maintaining this status quo it was currently reported to be making ten billion dollars a year in revenue and that money has to come from someone just don’t let that someone be you but what do you think are you an uber driver an uber passenger what’s your opinion have you got horror stories of your very own let us know in the comments below we’d love to hear from you hi everyone I’m Jade Louisville resident science nerd on the young turks network you’re watching SCI Q and we know you don’t want to miss an episode so please click the subscribe button down below

About the Author: Michael Flood

100 Comments

  1. It's not a scam. It's a ride share app that profit both the driver and the passenger .it wasn't designed as full time hustle but at beginning with the demand people worked full hours and made more money than their own jobs .as a full.time career it's a loss but it's great if you already have a car and a job but looking to make extra money for some emergencies instead of borrowing from western union or cash money your gas, car payment or other small bills

  2. A better ride share concept that will enable pro drivers to survive: https://www.gofundme.com/f/mytaxi-saving-professional-drivers?utm_medium=email&utm_source=customer&utm_campaign=p_na+share-sheet&rcid=d525c14438664237a3a6a1c7f361accd

  3. uber depends on a large number of ppl being cash desperate . ..so this works reall well in the usa. just need a car you can sleep in

  4. This video is a scam and complete BS click bait. I make $1,500/week with $175/week gas cost. Car paid off, free oil changes, warranty on tires; just got a nail, paid $20 boom new Fn tire! Set up my Uber driving as a business, all expenses are tax write offs, plus I make extra money with Cargo. Gig economy is taking over, employers are terrified, jobs and W2s are joining dinosaurs!

  5. Damnit! I was going to start tomorrow. Now I'm wondering about all the YouTubers I've listened to… They claim to be making money for years. I don't doubt your statistics. And indeed there is always someone waiting to take advantage of you. That profit margin is Shameful!!! I never knew they took THAT much! So….how about Lyft? I'm afraid to ask.

  6. I've never used Uber or Lyft so I can gladly say that I'm not contributing to the exploitation of the American worker.

  7. If you have a brand new car, then it comes with a warranty and certain number of miles or kms per year.

  8. +SciQ Hold up! Why are we deducting 54 cents per mile based on "depreciation" when things like vehicle registration, insurance, are included in that sum. If you do not drive for Uber, but you still intend to drive a vehicle lawfully in this country, you still have to pay for vehicle registration, insurance, at some point you'll need to pay for an oil change and new tires, etc. That portion of those expenses is constant whether you drive for Uber or not; it's called owning a vehicle. If you're going to walk to work, then fine. Otherwise, that portion of the depreciation calculation should be calculated as income.

  9. If you are smart and write off your miles,the tax savings will pay for gas and depreciation. This requires drivers to purchase used, low mileage vehicles at substantial savings to new prices,plan on putting two hundred thousand or more miles on the vehicle, handle basic vehicle maintenance and repairs yourself, and so on. A $15,000 car with $5,000 worth of maintenance and repairs over 200,000 miles comes out to $0.10 amile. If that vehicle is a hybrid that gets 50 miles to the gallon, then gas is about $0.08 per mile. Since taxes on earnings over about $40,000 are 22%, social security is about 14%, and Medicare is I believe 4% and state taxes in California or about 9%, this makes your tax savings per mile $0.25

  10. Her math doesn't seem correct. She says the IRS determines that the expense is 54 cents per mile. She deducts that amount from a driver's income. In fact, you can deduct 54 cents a mile from your tax liability. What this means is your taxable income will be reduced by this amount so it provides a tax savings. Ex. 100,000 miles x 54 cents = $54,000.00 deduction or reduction in your taxable income. In addition, she talks about car depreciation like the value of the car you use goes to zero but that isn't the case. Lets say you purchase a quality used car for $15,000 and then drive it for a year putting 100,000 miles on it before you sell it. You will probably be able to resell that car for $9,000 – $11,000 if you have maintained it properly. While I have no doubt the Uber site gives a rosy view of potential earnings I also have to think a properly run & well documented RideShare driver business would have a much better earnings outcome than what she is estimating.

    I would love to see actual numbers from someone who has worked this industry, managed their expenses properly and documented them in QuickBooks, and logged their mileage and received their maximum about of tax deductions allowed.

  11. While I do not think people can make a good salary out of driving Uber, but I do not think the Maths in this video is right unless someone uses a new V6 car to drive UberX. If it is an older small seden, the per mile cost would be a lot lower

  12. What a thief company, they just don't give a fuck about the drivers plus they take almost 50 percent believe it or not

  13. Don’t like Uber drive for TRYP keep 100% of the ride money and tip. And scale your business with referring other people. Be aware the Disruptors are coming.

  14. Fucked up and sucks like a hell to drive in uber, all the fuckn money you make goes to gasoline, car care and a bit small for your stomach to eat and drink because ofcoure you will fuckn drive almost 10 hours or more to do that above. I put from my money to what I got from uber to just live Like a shit. Thus, the biggest winner here is the uber it self but not the drivers at all and believe or not, you will hate it in just a month if you work it.

  15. Uber is a piece of trash company. I doubt they'll exist for too many more years given all their scams and driver rapes. I predict the feds will ultimately pull the plug on their despicable company.

  16. Automation is coming and Uber & Lyft is just buying time!! Why don't most people understand that these jobs are just a part time and a quick fix to make a buck!!🤭🤪 Long term is not the solution wake up everyone!!!!!

  17. Worst decision is drive for companies like Uber and Lyft that don't have your back when riders damage your car and uses riders' recommendation rants to deactivate your account without factual evidence.

  18. Uber relies upon people who cant hold a job for whatever reason. Old rich guys trying to buy sex from passengers. And drug addicts who would work gladly for 25cents per ride.

  19. People, I beg you. please. wake up.

    Don't do Lyft/Uber. You definitely have no power against them after you realize at month 2, that Lyft/Uber have been using you .  And you only have $99 left in your pocket.
    This system would never get you any savings, they sell your valuable lifetime for dirt cheap to attract people and get that money constantly from you, and you will feel sad for the car. your car hates the fact that you bought her or him.

    Many of them don't take the shower, and your back seats will get that nasty ass smells.

    I have a question for you. would you pick me up for $3? at rush hour? who in the world would do it except for the friends?
    and they are using that 20% coupons and special free rides coupon codes on holidays? so who cover that costs? you will be.
    Do you think they will raise the booking price for you? no, it will decrease the number of users. The target is always you. not the passengers, not the staffs.

    when you are near at month 4. they want you to quit for other fresh drivers who barely complain.

    Lyft/Uber takes average 40%. the half of a month time you will be pissed off I guarantee that. when everybody get pissed off and strike, then pay you a little more for 2 weeks then everything rolls back quietly, you again get that shit pay then the cycles over, they repeat this frequently.

    I BEG YOU. do something else productive when you have free time. you realize that you can survive in any other ways that's always better than Lyft/Uber.

    You will undervalue yourself and get confused. but at the end you will accept the wrong deals they play and lose ability to filter what goes right and what goes wrong.

    at month 4, they do not want you anymore. even though you have 5 stars all the time. having you over 4 months is negative profit for them(i heard this from IPO webpage i don't know why). so they pay so much less than before and those cut goes to the new drivers.

    You will feel sadness that someone used you for money, and you can't do anything about it. That damages your mentality which would cost you more money in an entire life. That's permanent damage. I'm sure those two company will collapse within two years, better engineers will make much better app for the people, that is open sources that anyone can take part and every drivers and passengers will use it. which makes driver and the passenger both happy without the man in the middle with that 40% of your income.

  20. 😭 😭 😭 😭 I’ve been driving uber for the past 2.5 years and not even covered my expenses after i left thanks god i am well now

  21. Damn, I sure am losing money at $25-$35/hr and my tax deductions are about 50% of my earnings but my car isn’t a fucking Land Rover so the miles and gas and oil changes don’t cost much. You couldn’t have cherry picked data any more.

  22. i don't get it. do people think that only fleet drivers have to do car maintenance, pay taxes, and maintain car insurance? everybody has to do that, including people with high paying cushy jobs. if they make enough money they can afford the expenses. I've been delivering for almost 10 years and while i'm not filthy rich(no one should expect any entry level job to make them rich or even upper class) i'm able to pay my bills just fine. heck I made enough money to buy another vehicle when my old one got totaled. who buys new cars every 5 years anyway besides rich people? you can get a quality used vehicle for $4000 and if you drive a fuel efficient vehicle that's easy to maintain or you have mechanical skills and can do it yourself, you can save tons on car maintenance.

    you also can't beat not having to deal with inside work, annoying co-workers and bosses, and being able to make your own schedule and start and stop when you want.

  23. "You're going to need to buy a new car every 2 or 3 years" was the most retarded statement on this video. Yeah, if you drive a Saturn or Kia! 😭

  24. Thats why I tried to boycott the app but I no longer have a car. People who arent for this job shouldn't do it. When I first heard about the company I thought it was legit until i figured it out .

  25. Your calculations do not account for tips, referrals, and self promotion that can be done via social networking. You are correct that you are trading the future value of the car for cash. But again, you do not account for the fact that cash in hand is more valuable than the future value of the car.

  26. Uber is a scam and passengers know it but a little cheaper than taxi and dont feel guilty not tipping ubers drivers

  27. you forgot to said there is 1.34 base fare plus promotions and surge and other earnings not just cents per mile..still bad anyway

  28. Also people use whatever car they have. Honda and Toyota surpass every other auto maker for constant use. my 01 tacoma didnt even start having problems until the 280,000s.

  29. Uber and Lyft are basically being crowd funded by drivers.I have watched the You Tube videos and always draw the same conclusion.

  30. That is dumb I have an uncle who works full time in Uber and makes more money than when he owned a papa johns. This is not a well though out video I’m sorry

  31. I Pay extra Cash at 20% for every trip, which hopefully covers some of the costs. The Net income analysis is very real!

    Vehicle time cost, tire, fuel and consumables cost, tax, insurance, license fee etc., I have been told by Uber drivers that they drive for nearly 14 hrs a day. Lawmakers have to intervene to stop this exploitation of Drivers/Cab owners by aggregators like Uber.

  32. I calculate my earnings after expenses and taxes on a daily basis. My net earnings fluctuate between 7 and 15 per hour averaging around 10. I live in a mediocre city for Uber and have a sub optimal vehicle.

  33. This lady is an idiot. Check out The Simple Driver or The Rideshare Professor to learn that the truth is you can get rich as a driver if you see all the angles

  34. uber is not a scam, the US regulations are, uber is just doing what most companies do which is playing on the borderline of legality

  35. I’ve done the math also. You’re actually loosing money by driving through Uber/Lyft! It’s all a scam!!

  36. Driving for uber is a joke, should put on a clown suit driving for this company, or just go live in your car, because you will be homeless with nothing with these slave wages.

  37. I'm just curious when you figured out all the math did you also consider the fact that you can deduct $0.54 a mile as well as other expenses such as your car wash and so forth? That actually brings the cost down quite a bit. No looking at that myself and others average about a hundred and fifty and night take home and maybe only have to do one tank of gas at around $25. I'm not saying you'll get rich but most people do average around 10 to 20 an hour and if you know how to give great service you can also get tips. To make up the difference you also have to look at it side gigs such as the cargo box or music apps that pay you for playing their music to Riders. Yes some people are not smart enough to set money aside but if you were smart you would figure 30% of all the money you make should immediately go into a savings account which would cover taxes should you have to pay anything which most people don't or pay very little because of the reduction in mileage but that also helps with depreciation of your vehicle should you need to get a new one. I've also seen where people I need to lease a vehicle and you can actually get the cost of the lease reimburse if you hit a certain number of write each week which saves you quite a bit in the long run. Uber isn't necessarily a scam as long as you do it in a way that smart but it also does take the right kind of person to be able to make it work

  38. the only way that you make money is working 70 hours a week hitting the bonus and you don't have a life you always tired this is good for them but not for the drivers

  39. I totally agreed with you, I cannot understand why people still working for Uber and Lyft, they’re robbing both sides driver/passenger

  40. Thanks for sharing this. This is most sure for most Uber Drivers a new Thing they never thought about it. As Long as the flow of new Drivers Keep comming, this scheme can continue. I have listened to an southamerican Uber Driver who Claims as well it's not worthed driving for Uber in his Country. Other US Uber Drivers Claim an net income of about 4% while in that southamerican Country the net income was about 25% – but still well below the Minimum wages – the net income as an Uber Driver was about 33% of the Minimum wages in that Country.

  41. I make over $700 – $1000 a week driving for both Lyft and Uber. Right now though Lyft guarantees new drivers will earn no less than $1000 driving in the first month with Promo Code. This is a guaranteed base pay of $1000 not including tips and time is limited. Start driving part time now. If you don’t enter a code upon starting your application, you won't be eligible for this promotion. use Promo Code: OFFICIALPROMO to earn a guaranteed $1000 driving for your first month when signing up with Lyft. To qualify for the bonus in your city if you want to drive for Uber you can use Promo code: ChristyJ232OUI to qualify for promotions with Uber.

  42. I’m sick of you people bashing Uber's, if you’re not happy just move on to something else, I’m sure whatever it is you’re going to complain about it SO JUST MOVE ONE!
    ScIQ looking at your channel is there anything satisfies you? Negative, Negative, Negative,

  43. I love THIS lady. I got into the cab business in 1997 and did really good. I have been telling people for years that these companies weren't going to do well.

  44. Be an uber baller. Llc then file scorp buy a cheap car depreciate it pay yoself a fair reasonable wage and stack cash in a separate bracket than your day job wages. Full time uber is dumb. Its gotta be a side gig.
    Pick up eats and amazon 2hr and declare earns under the same company.
    Form 2553 pimp.

  45. Averaging $15 to $20 every 4 hours of waiing and driving. I am very disappointed. Right after the guarantee my trips were cut by more than 50%

  46. It's true they charge customer more but don't paying the driver . This happend after the Muslim takes over 🐀

  47. I do uber eats ..I do about 3 trips about 4x out the week and I give that money to my 11 year old niece. She comes with me and helps. She wanted to make some extra money so I figured why not. I stay maybe an hour a day. I dont see how anyone could do this for a livinng

  48. This math is so wrong I don't even know where to begin. This isn't how taxes or mileage deductions or depreciation works. I can't even….

  49. Uber is a scam, because as soon as you get smart enough to see it, you get deactivated. Click thumbs up who had this exact experience

  50. So parts of this are just wrong.
    First of all idk about LA but here in Dallas we keep all .90c per mile (60 here) but you get my point.
    Also .24c per mile for depreciation GTFO.
    Let's say you buy a used Civic for 17000 with like 30k miles. (Yes I looked and in my area that's how much they go for in Dallas) .
    That car will last till 150k miles easy. So you drove 120k miles and depreciation is at 28,800 so apparently the car is worth -11,800.
    Also insurance title fee's is stuff you will have to pay for whenever you have a car whether you use it for Uber or not.
    Disclaimer: I have not done Uber full time I've done it on the side a little while back.
    Either way it's not good or great money but definitely something you could do as a side hustle.

  51. Let's see you pay for taxes(doesn't matter if you work full time or part time), ride insurance twice the price of regular insurance (yes you have to if not I pray you don't get into a accident without a passenger I know this first hand your insurance won't cover you and ride share will only cover you for half), gas which is expensive where ever you live, depreciation of your vechicle(if you rent your still paying for the depreciation of the company your renting thru), wear and tear of vechicle( tires, dents, etc), riders don't respect your personal vechicle( not all but majority by not having car seats for children, eating and drinking in vechicle, over privilege), time (ride sharing started on the premise of giving some a ride on the way to your destination not theirs so when you have to drive back home/or where your destination is with no passenger you pay for it not them), acceptance and driver rating( your a private contractor this should not reflect on you it's your vechicle and time), hustle (for those that say this is a good or great side hustle….a hustle is when( making money under the table no taxes, making more than your current job or minimum wage, and something that makes your time worth the money), ignorance is bless( keep doing ride sharing increasing traffic, accidents, giving corporations money for your hard work and time, and giving me a cheap ride with pool while I go and get drunk knowing I didn't have to worry about parking or driving and it only costed me $5 bucks.

  52. IRS's estimation is a bit overblown there at 57 cents/miles, I'd like to see how they came up with that. When I do the math I get around 23 cents per mile. That's with a $10k car

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