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Uber Drivers Running on Empty


Takele Gobena behind the wheel.

Takele Gobena behind the wheel.

Twenty-six-year-old Takele Gobena is part of the “on-demand” economy, working full-time as a driver for Uber and part time for Lyft. The Ethiopian immigrant quit his job at the Seattle-Tacoma International Airport and purchased a new car to drive for the ride-hailing firms, believing it would make him a better provider for his one-year-old daughter. Instead, Gobena now finds himself in debt and, after expenses, making well below minimum wage. But because Uber and Lyft drivers are classified as independent contractors, Gobena is not protected by minimum wage laws.

Gobena’s plight is an increasingly familiar one. A new report from the National Employment Law Project, “Rights on Demand: Ensuring Workplace Standards and Worker Security In the On-Demand Economy,” highlights the problems so many on-demand workers face: “Characterizing workers as non-employees has serious negative consequences for them: non-employees have no statutory right to minimum wage, overtime pay, compensation for injuries sustained on the job, unemployment insurance if involuntarily separated from employment, or protection against discrimination.”

The authors of the report, Rebecca Smith, NELP’s deputy director, and Sarah Leberstein, senior staff attorney, call for workforce-wide enforcement of current and developing labor standards. “New technologies should not be allowed to displace existing protections for the many on-demand workers who are, in fact and in law, employees.”

Gobena is inclined to agree. In a phone interview with Capital & Main, he spoke about driving for Uber and Lyft.

Capital & Main: Why did you leave your job at Seattle-Tacoma International Airport to drive for Uber and Lyft?

Takele Gobena: I thought that I could earn a better income driving for these companies. Their ads led me to believe my pay would be $25 an hour.

Capital & Main: How does your airport job compare with working for Uber and Lyft?

Gobena: At the airport, I earned $9.47 an hour as a dispatcher and had health-care benefits. With Uber and Lyft, driving 37,000 miles in 2014, after all my expenses (vehicle financing, fueling, insuring and maintaining) I earn $2.64 an hour and have no health-care coverage if injured.

Capital & Main: Are you an Uber employee?

Gobena: No. I am an independent contractor for Uber. I work without company benefits, and when passengers phone me.

Capital & Main: Has Uber or Lyft retaliated against you for vocalizing displeasure with your treatment?

Gobena: On August 31, I shared my personal experience as an Uber and Lyft driver before the Seattle City Council, which the press reported. [Seattle Councilmembers Mike O’Brien and Nick Licata have introduced city legislation that would allow on-demand transportation drivers to bargain collectively with their employers.] Uber deactivated [my account].

Capital & Main: What happened next?

Gobena: I took a screen shot of the deactivation account [notice] and sent it out to the media. They called Uber about it. Then Uber reactivated me.

Capital & Main: How did you become a labor advocate?

Gobena: I worked with the immigrant Ethiopian community in Seattle, then with employees pushing to increase the minimum wage at Sea-Tac. I saw how difficult it is to live on the minimum wage, and began to speak out about that.

Capital & Main: In addition to NELP, who are your political partners?

Gobena: I do not have any. I speak for myself and the other on-demand workers like me who receive unfair treatment.

Capital & Main: Describe feedback that Uber and Lyft give you on your job performance.

Gobena: If customers complain, Uber gives me a warning that I must improve. However, the company does not tell me how or what needs improvement.

Capital & Main: Are you looking for another job?

Gobena: No. I have invested $14,000 in buying my car that I drive for Uber and Lyft. I must continue driving passengers in it to recoup my investment.

Capital & Main: What needs to happen next for on-demand workers employed with Uber and Lyft?

Gobena: We like the ride-hailing innovation and transportation for our city, but Uber and Lyft drivers need better treatment and livable wages. This issue affects riders and drivers alike.

  • dballance

    This guy has to be the worst person to profile in this story.

    He does warrant my sympathy though. The “Sharing Economy” has produced some of the worst modern hucksters since the “Work at Home and Get Rich” assholes.

    He made so many mistakes in his decision to become a driver. It makes me sad for him.

    It seems he never did the simple math about revenue vs. income vs. expenses. Simple math really.

    It really makes me sad about the USA when really nice, good people like him get f-ed over in schemes by assholes

  • Clybourn

    I have to say I really don’t have any sympathy for this guy.

    Ridesharing is not set up to be a primary source of income for people. It lacks a guaranteed income over hours, benefits, and it lacks a guarantee of work depending on the weather, the amount of other drivers on the road, as well as the day of the week and/or holidays. In Chicago, the North Side is practically devoid of pax’s on Holiday weekends, and by that I mean the whole weekend, 50% of the people on the North Side aren’t from here and a bunch of them go home. A large chunk of the usual barhopping crowd out of town = significantly less pings. Happened the year like clock work on Easter, Memorial Day, 4th of July and Labor Day weekends this year. People that rely on that weekend spike to feed their family are being foolish.

    While its a great source of supplemental income, (I take home $250-$300 a week), take note that Uber and Lyft have never made claims that they are full time employers. The people that try to turn it into a full time gig then complain when they can’t make ends meet are just a bunch of crybabies.

  • Derryl Hermanutz

    “Regular” taxi drivers do not earn high incomes. If Uber is undercutting regular taxi prices, then whose income is the lower revenue coming out of? Uber is a mega-billion dollar transnational corporation. Somebody is getting rich selling cheap rides. But it’s not the drivers who are providing those cheap rides.

  • obamagonian

    I commute about 30 miles one way to work. I am thinking about becoming a uber driver to help recoup my drive time expense. the question I have is as a driver can I pick and choose which customers I pickup based on their location and destination?

  • RutDog

    I’m a driver, and I support the efforts of the Seattle City Council to allow drivers to organize.

    But this guy, he’s done a lot wrong. Two biggest mistakes:
    1) He bought a car just to driver for Uber.
    2) He quit his full time job.

    These are the two worst decisions anyone considering rideshare driving could make. And some basic research would have exposed this, simply talking with other experienced drivers in person or in one of the many online communities of drivers.

    There are other things here — “passengers phone me”. Look, we all know this isn’t how it works. But it points to the driver’s English skills. His accent was heavy enough that KIRO added subtitles.

    “If customers complain, Uber gives me a warning that I must improve.” I’m sure the customers do complain. Passengers are frustrated if they can’t communicate easily with their driver. People with limited English will struggle in this business. I’m sympathetic, it must be difficult. But I’m confused why so many immigrants think this is such a great fit for them. It’s a service job, and part of that service is communication.

    It’s very difficult to provide top notch service as a driver. Throw in the language barrier and the stress created by really bad business decisions you’ve made, and you’ve got a recipe for failure. I’m sorry, but that’s the hard cold truth.

    My advice for Gobena:
    1) Get a regular job, with fixed pay and benefits.
    2) Sell the car, now. Even if you have to take a loss.
    3) Educate yourself. Learn about the true cost of doing business, and techniques to maximize profit. It’s not easy! A great resource is https://www.reddit.com/r/uberdrivers/
    4) Buy a car only when you can afford a car from the earnings of your regular job.
    5) Start driving again for Uber and Lyft on the side. Focus on providing top notch service. This is a business. It’s all about the customer.
    6) Don’t quit your regular job until you’ve covered all the bases, such as proper vehicle and personal insurance for starters.
    7) Keep involved with organizing. I totally support that. But you’ve got to see the difference between what you’ve done to yourself and what Uber does to all of us.

    • Pontifikate

      “1) Get a regular job, with fixed pay and benefits. ” NOT SO EASY ANYMORE!

      • RutDog

        Certainly, but he quit his full time job with benefits!

        Buying a car you can’t afford to drive for Uber is just digging yourself in a hole.

  • Take a look at the true face of Uber & Lyft on the Drivers’ Forum http://UberPeople.net You’ll be taken aback!

  • yogi-one

    Although many of the things Gobena is saying is true, the math doesn’t work out. I drive fulltime for one of those companies.my company computes your fares/hr based on your actual logged in time as available for trips. Mine is usually a little bit above $25/hr. If you take my daily avg (something around $150 in 8 hrs, including my time off the clock – besides lunch, just as an employee would at a regular job), it is still over $18/hr. I use $20/day in gas, my car payment works out to under $8 a day, my personal car insurance (not the company’s) to under $6/day. That’s about $35 a day. I spend up to $15 (usually less) on lunch, snacks/breaks, and coffee. That’s a max of $50/day. That’s leaves $100/day after all expenses. Fri and Sat I make avg $50 more than weekdays. But let’s forget about that and use the Mon – Thurs figures. That’s $12.50/hr AFTER all work related expenses. That’s 10 times Gobena’s figures.
    Now, consider than in an employee situation I might get the gas re-imbursed. But no employee-type driving job I have seen (and i have been doing this for decades) will pay anywhere near $25 an hour (you’ll be lucky to get much over $15, possibly $20 max).
    I have been tracking every single expense with an excel spreadsheet this year. I register all receipts – every cup of coffee, every bag of peanuts, etc, – tabulate all paychecks, and my company makes it easy to see my earnings on a day-by-day or weekly basis. So I think my figures (though estimated here) are more accurate.
    Although a lot of what he is saying about the driver experience is accurate, the adjusted hourly figure I think is not accurate. So that should be fixed to make the discussion more on track.
    That said, I basically agree with Gobena, other than the hourly figure. I think independent contractors should have organizing and collective negotiation rights because I believe all workers should. The right to organize workers and negotiate a contract is a basic worker’s right that is at the heart of any discussion about fairness in the workplace, whether the job is hotel busboy or computer scientist. It’s time our society stepped up and formalized that right for all workers.

    • Monika Dean

      Unfortunately, your figures are considerably off as well. Not sure what vehicle you’re using, but unless your driving a Prius, $20 doesn’t cut it for gas over a 8-9 hour day. I live and drive in LA and at $3.88/gallon for gas, even my VERY fuel efficient Mitsubishi economy car will use about $30 a night in gas!

      Here is a true and accurate account of my my expenses versus net income:

      Average Time on shift: 10 hours
      Average Gross Income for 10 hours on shift: $160
      Typical miles driven over 10 hours on shift: 260
      Typical Fuel Cost after returning home after shift: $36
      (yes, I top up my tank after each shift so I can accurately account for my fuel expenses)
      Car Insurance per day: $3.53
      Car Payment per day: $12
      Vehicle Maintenance Costs per day: $8.50
      (this accounts for Oil Service every 60 days, Brakes, Tune-up, Transmission Service)
      Vehicle depreciation at 260 miles/day, .18/mile (IRS Guidelines): $48
      Cash Expenses while out driving (meals, snacks): $20

      Total Expenses: $128
      Total Gross Income: $160
      Average Hourly Wage: $3.20/hour

      So, there you have it. It is the ugly facts that Uber/Lyft tries to gloss over. The fact remains, that if you take into account all the expenses, it’s not very pretty. Most people fail to take into account the vehicle maintenance and depreciation costs and that’s a HUGE factor. Driving 67,000 miles a year is going to make my vehicle worthless after 3 years and I’ll only be 2/3 into actually paying the auto loan off, so you MUST take that into account. It’s NOT a company vehicle they are providing, it’s your OWN personal vehicle (POV) and you have to replace that vehicle in the end.

      So, the gentleman’s not that far off actually.

      Sad…but true…. 🙁

      • Mercy Hatzis

        so basically whatcha is unless its a car you dont care about and wanna make some money on the side say if your studying or working part-time its ideal but not as a full-time only job. BTW Is that liquid petroleum gas

        • Monika Dean

          Bingo! That’s precisely what I’m saying. If you need a part time gig and you don’t mind running your car into the ground (or you’re just driving temporarily like me), it’s a good way to have your freedom to do your main job plus drive. BUT……if you’re looking to do this as your FT job, you’ll be sorely disappointed! Think about it, you’re taking on a full time delivery job basically with a company that provides no delivery vehicle! Could you imagine UPS doing that? “Ok, here you go guys, get in your car and deliver all these packages”! Oh….and by the way, don’t forget to fill up before you get going! Oh….make sure you’ve got money for gas! Nobody in their right mind would accept the job! And yes, that price was for Petrol unleaded gas. 🙂

          • M S

            The general conclusion that Uber is more practical for those who already own a car and would like to earn a little money driving part-time is valid. But your numbers seem off, too. Your expenses are high because you incur atypical maintenance costs, take generous depreciation, and treat your lunch and snacks as business expenses.

            Why are you even taking depreciation when you have already expensed the purchase of the car? Should you be reimbursed for 2 cars? Go ahead and take the IRS deduction if you can get away with it, but don’t count it as an additional cost. Let’s accept your high maintenance and other costs, and then, disallowing depreciation and lunches, your actual hourly rate is more like $10/hour. Not great, but not a terrible injustice.


            • Monika Dean

              Hi MS:
              Thanks for your feedback and input on this rather important matter.
              I understand it does look like we’re all painting a gloomy picture, but it’s not all bad.
              Just to clarify one further bit on the expenses for you. I take into account depreciation in addition to any car payment not because of anything I’m filing with the IRS, but because folks with normal commute type work are not putting 65,000 miles on their car every year. So, I take depreciation into account because at the end of 3 years I have to replace a vehicle that will be worth CONSIDERABLY less that someone who doesn’t do this kind of work. Therefore, the depreciation is a valid part of the equation and I DO count it as an added cost. Technically what it amounts to is that every Uber/Lyft driver should be putting away $40-$50/week into a separate savings account that will go towards down payment of a new car in 3 years.
              At the end of it all, we all must make an educated decision as to whether the benefits outweigh the costs.

              • M S

                The IRS may allow generous depreciation but that does not enter into this analysis. You purport to analyze your income and expenses to determine an effective hourly wage, and you have done that by itemizing your actual expenses and receipts.

                By itemizing your actual expenses, you have identified the cost to you of providing the car. By trying to claim depreciation as an additional cost in this analysis, you are pretending that you should be entitled to the value of a second car as well. If purchase, insurance, maintenance, and fuel are already accounted for, why should you also include loss in value as the car ages?

                By accounting for the actual costs, you have made a fair argument that Uber/Lyft is paying you approximately $10/hour. The fact that your vehicle will wear out faster is irrelevant because you have already deducted your actual costs and when the last car payment is made, you can roll the car off a cliff and go to the dealer and buy a new one, and your $10/hour conclusion will remain valid.

                You certainly should take advantage of any IRS rules that work in your favor.


      • Chuck Koos

        UberX/Lyft is for people that can’t do math. Once you do the math like Monika did, you’ll realize the only one making money on this deal is Uber/Lyft.

        • M S

          It seems that hating UberX/Lyft is also for people who can’t do math.

          If you do the math as Monika did, you’ll make illogical assumptions and reach a meaningless conclusion. Do consider the pros and cons, but try to do it fairly and rationally.

          A theme running through this thread is that driving people around in your car should be a high-paying job. This assumption also needs reexamination.


          • Chuck Koos

            If your “hating UberX/Lyft” comment was aimed at me, please reread my post; nothing I said implies that I hate either of them. If it was directed at the thread in general, so be it.

            I’ve been doing Uber and Lyft for a bit over a year and a half and over 1,600
            rides. Every ride has been recorded in a spreadsheet which allows me to sort X,
            XL and Lyft rides as well as factor in expenses and tax deductions. My
            conclusion based on 18 months of data is that in my market (Orange County, CA)
            I could make more money working at Target than I could driving UberX. Now,
            before someone makes a witty comment like, “Well then go work at
            Target”, read on. I drive almost exclusively in XL mode. And doing that, I
            can definitely make more money than working at Target, etc. See, no hate here.

            Now if you work in a dense urban area where you have a client in the car 55 out
            of every 60 minutes and all your pick ups are 1 mile or less, all the math
            changes. And of course surge also can’t be ignored. Given a good surge rate, I’ll
            drop out of XL only mode and take both X and XL requests.

            But, based on 1,600 lines of data over 18 months, in Orange County, UberX
            doesn’t make sense financially to me. YMMV

            • M S

              It would seem I owe you and Monika an apology. I guess I was thrown off by your complaints, supported by faulty math. Perhaps since Uber/Lyft apparently misled with false high earnings forecasts, you thought it appropriate to counter with false low earnings forecasts. I just thought that realistic rational forecasts would be better. My bad.


          • Monika Dean

            I certainly don’t hate Uber/Lyft either. They are a means to an end for a few “short term” financial goals I have set. Short term for a period of 2 years or less, it makes sense because I will gamble on the excess miles on my car and hopefully sell it late next year before it hits 100K and hopefully not lose my shirt in the sale.
            I think every driver should not just blindly drive around thinking they’re doing even OK in this gig without understanding what their financial goals are in coming on board to begin with.
            This weekend that we just had, I drove 18 hours between the two evenings. Both Sat and Sun morning I didn’t get my butt in bed until past 5am both mornings. No matter how hard I tried, I couldn’t break $300 and I drive in the busiest sections of LA (West LA, Hollywood, Downtown, Venice Beach). I made $290 for the weekend and spent $70 in fuel. If I take only fuel costs into consideration (which is just SO not accurate), I still only walked away with $220 for my next deposit. That is $12.22 in a city where the min wage is going to be $15/hr by the year 2020. No, you should certainly not think you’re going to get rich driving for Uber/Lyft, but to advertise that you’ll make up to $30/hr driving for a TNC is just nonsense and a bold face lie on their part.
            It’s a min wage kinda gig at best, and often comes with a great deal of costs associated with it.

            • M S

              It is a minimum wage kind of job only after you account for the costs associated with it. This is a smart way to think about it and anyone contemplating the job should weigh the pros and cons. But pretending that there are a great deal of additional costs is not reasonable, as it only falls to minimum wage after adjusting for the costs.

              You have a better argument that as an independent contractor you are responsible for your own health care and pension.