OT: Any Uber Drivers Among Us?

[SpokeValley]

I use Uber all the time when I travel and I like it a lot.

Our kids are now out of the house and Mrs. Valley was looking to do something but really didn't find any jobs she liked. So, I suggested Uber and we set her up driving. The tech at the company is really something; very dialed in with nav, ride and earning reports, and the help desk is super responsive.

You will not get rich, but the cash flow helps and she generally likes the riders and works when she wants to. She averages $10-20/hour depending on demand. Keeps her occupied and out of my hair :rolleyes:. I'm waiting for a juicy mileage write-off.

Any others out there?

[Ken Robb]

I use Uber all the time when I travel and I like it a lot.

Our kids are now out of the house and Mrs. Valley was looking to do something but really didn't find any jobs she liked. So, I suggested Uber and we set her up driving. The tech at the company is really something; very dialed in with nav, ride and earning reports, and the help desk is super responsive.

You will not get rich, but the cash flow helps and she generally likes the riders and works when she wants to. She averages $10-20/hour depending on demand. Keeps her occupied and out of my hair :rolleyes:. I'm waiting for a juicy mileage write-off.

Any others out there?

As far as I know your write-off will be a deduction from her gross earnings on a Schedule C so you will still have increased taxable income overall.

[jtakeda]

Get ready for your bill from the irs!

Uber 10-99s their employees and wait for these law suits to hit and see how drivers are impacted re:insurance etc.

[SoCalSteve]

As far as I know your write-off will be a deduction from her gross earnings on a Schedule C so you will still have increased taxable income overall.

But I wonder how much you can offset the taxable income with insurance, fuel, mileage and maintenance deductions. I'd keep really good records for everything. Also, wonder if the standard mileage deduction is better than all the other expenses. And, can you choose one over the other???

Probably time to see a CPA...:confused:

[Ken Robb]

You keep track of all auto expenses for a tax year and every mile driven. You take the percentage of business miles vs. personal miles and you deduct that percentage of total automobile expenses from your total automobile expenditures to get the "auto expense entry/deduction" for your schedule C.

[alancw3]

i would be more concerned about the potential danger to my wife picking up strangers in the world we live in today. perhaps my ignorance of uber, having never used it. hopefully they have some built in safeguards to protect drivers with a screening process for customers.

[2LeftCleats]

I assume she's an independent contractor which means she'd pay both ends of social security. That's a big gouge into her income.

[SpokeValley]

You keep track of all auto expenses for a tax year and every mile driven. You take the percentage of business miles vs. personal miles and you deduct that percentage of total automobile expenses from your total automobile expenditures to get the "auto expense entry/deduction" for your schedule C.

Exactly.

[54ny77]

not in my worst nightmare would i ever want my wife to drive a cab or uber. no way whatsoever. there's too many whacko's out there.


i would be more concerned about the potential danger to my wife picking up strangers in the world we live in today.

[sandyrs]

i would be more concerned about the potential danger to my wife picking up strangers in the world we live in today. perhaps my ignorance of uber, having never used it. hopefully they have some built in safeguards to protect drivers with a screening process for customers.

I think the danger, while small in either direction, is more significant for the customer than for the driver.

http://www.whosdrivingyou.org/rideshare-incidents

[austex]

What's the insurance situation as you understand it? Locally, State Farm will NOT COVER vehicle/liability while in commercial use. Do you have to get commercial insurance? Does Uber cover driver/vehicle under a corporate policy?

[velomonkey]

What's the insurance situation as you understand it? Locally, State Farm will NOT COVER vehicle/liability while in commercial use. Do you have to get commercial insurance? Does Uber cover driver/vehicle under a corporate policy?

Uber covers you while you are logged in (i.e., willing to accept requests) and then covers you even high when you accepted a ride and are on your way to pick up the party - and then cover you even more when you start the trip.

They had an issue where some dude killed a kid in a cross walk going to pick someone up - they claimed they weren't responsible - not a wise move - it's since been changed.

[likebikes]

Get ready for your bill from the irs!

Uber 10-99s their employees and wait for these law suits to hit .
the lawsuit was settled already; uber can continue to 1099 their employees.

edit: nyt article: http://www.nytimes.com/2016/04/22/technology/uber-settles-cases-with-concessions-but-drivers-stay-freelancers.html?_r=0

[jtakeda]

the lawsuit was settled already; uber can continue to 1099 their employees.

Wow.

I can't believe this. This exact same thing happened to the messenger industry and the verdict was that the messenger companies had to treat their workers as employees.

Uber has a lot more money and sway though.

[DfCas]

If she is considered self employed the tax burden will be very heavy maybe 40-45% total.

[likebikes]

Wow.

I can't believe this. This exact same thing happened to the messenger industry and the verdict was that the messenger companies had to treat their workers as employees.

Uber has a lot more money and sway though.

it's a little different with messengers though, if you turned your radio off to do whatever else during the middle of a busy day or didn't call in on monday you wouldn't have a job. with uber you can do that.

not a lawyer but i understand the laws & the legal process very well.

(used to work for a messenger company that was repeatedly sued by the lawfirm representing the uber drivers in the above article due to breaking labor laws)

[jtakeda]

Good point.

I'm not exactly sure how uber works but I suppose if you have to actively accept every job that means you're choosing to work and accepting the rate.

So I guess that makes sense.

The next thing that confuses me is how uber gets away with having commercial taxis without paying for taxi cab licenses and drivers don't have commercial plates.

[Ken Robb]

If she is considered self employed the tax burden will be very heavy maybe 40-45% total.

The main difference between independent contractor versus employee is the I.C. has to pay both sides of
social security taxes as there is no contribution from the employer. The income tax rates will be the same. It may be easier to write off auto and other expenses on a Schedule C than as unreimbursed expenses incurred by an employee.

[velomonkey]

The big issue is that Uber will hit you for a job that's 15 minutes away - sometimes more than 20 minutes away - and not tell the driver the destination of the ride.

You will routinely accept jobs that are 10 or more minutes away and then get a fare of $3 as the person is going 2 miles down the road. Now the driver has spent almost 20 minutes for $3 and is no longer at their previous location.

Obviously Uber never pays for driving to pick up a rider or driving back home from wherever you end up.

[verticaldoug]

The big issue is Uber loss ($1.7b) on $1.2b of revenue last year according to Bloomerg. They keep raising additional funds to keep the rapid capex spend going. Eventually, the wheels will come off. UBER definitely feels like it is mispricing the service thinking at some magical economy of scale, they make money..... at that magical level of algorithmic scale, UBER will be the worst place in the world to be a driver.

[54ny77]

Uber will join the graveyard of internet startups that spectacularly failed.

[velomonkey]

The big issue is Uber loss ($1.7b) on $1.2b of revenue last year according to Bloomerg.

excusez-moi, s'il vous plaît - Uber made 10B in revenue in 2015. (http://www.businessinsider.com/uber-revenue-projection-in-2015-2014-11?op=1)

Say what you want, that is some crazy high revenue. With almost 300 full time people working on driverless cars I can almost guarantee uber will be profitable. They keep 30% of the revenue just by running their marketplace - put in driverless cars and that number increases potentially to 100%.

10B for a 5 year old company is crazy.

[rwsaunders]

I see their cars all over town...they look like a regular black Ford sedan with a spinning radar like device on the roof. As they develop this technology along with other firms, they'll replace the drivers who helped to start the company and essentially "drove" their revenue. What a viscous cycle.

Note in the article that Uber partnered with CMU (Carnegie Mellon University) in developing the driverless technology and eventually they commandeered 1/3 of CMU's Robotics Institute's staff. Another viscous cycle indeed.

http://fortune.com/2016/05/19/uber-self-driving-car-pittsburgh

[verticaldoug]

excusez-moi, s'il vous plaît - Uber made 10B in revenue in 2015. (http://www.businessinsider.com/uber-revenue-projection-in-2015-2014-11?op=1)

Say what you want, that is some crazy high revenue. With almost 300 full time people working on driverless cars I can almost guarantee uber will be profitable. They keep 30% of the revenue just by running their marketplace - put in driverless cars and that number increases potentially to 100%.

10B for a 5 year old company is crazy.

Business Insider is such click-bait. Maybe I get a different link, but the article is from Nov-2014 and uses a qualifier that by the end of 2015 the company is expected to have a run-rate of 10 B. With 70-80% of revenue going to the driver, the bloomberg article quoting a $1.2B revenue is probably not far off. If UBER was not burning cash so fast, they would not need to continually raise new equity.

If Uber actually does a debt raise here, they will probably have to disclose more info on financials than they have in the late round equity raises. If they don't, it really means the debt markets are going back to the bad old days of no doc, cov-lite etc etc ..

Uber can be profitable, but will that profitability support current valuations? I don't know, but I do know there are some ugly reset structures in late round equity raises and these will become problematic if the company gets repriced which often happens.

[velomonkey]

Business Insider is such click-bait. Maybe I get a different link, but the article is from Nov-2014 and uses a qualifier that by the end of 2015 the company is expected to have a run-rate of 10 B. With 70-80% of revenue going to the driver, the bloomberg article quoting a $1.2B revenue is probably not far off. If UBER was not burning cash so fast, they would not need to continually raise new equity.


Uber did 10B of gross revenue in 2015. (http://www.reuters.com/article/us-uber-tech-fundraising-idUSKCN0QQ0G320150821) Their net revenue was around 2B. Driverless cars are going to massively increase Uber's net. If 10B of revenue in 5 years doesn't earn some validation I'm not sure what will.

[verticaldoug]

Uber did 10B of gross revenue in 2015. (http://www.reuters.com/article/us-uber-tech-fundraising-idUSKCN0QQ0G320150821) Their net revenue was around 2B. Driverless cars are going to massively increase Uber's net. If 10B of revenue in 5 years doesn't earn some validation I'm not sure what will.

Uber is a really interesting company. I am not saying it isn't. My point is regarding valuation.

Uber has a big revenue number, but it comes with a very big cost of revenue number. You mentioned facebook before. FB 's (okay very different model) but FB cost of revenue is about 20% as opposed to Uber's 70-80%.

If Uber goes to driverless cars, they have two potential models: 1. keep existing business models and just allow owners of driverless cars todeploy their vehicles, 2. buy and run the fleet themselves.

For scenario 1: the revenue and cost of revenue model doesn't really change.

For scenario 2: Uber will be able to lower the cost of revenue number, but the business expense lines will explode- cost of technicians to maintain the fleet, fuel, etc not to mention the large capex needed for the fleets. Maybe they can be clever and package the fleets and sell the bonds to investors. But again nothing is frictionless.

After writing this, even after being pounded for 2 years, Hertz is probably still a short. :eek:

[velomonkey]

For scenario 1: the revenue and cost of revenue model doesn't really change.

For scenario 2: Uber will be able to lower the cost of revenue number, but the business expense lines will explode- :

Valuation of a private company is a bunch of art and some science. Is their current valuation correct? Not sure. I will say this - I'm not a fan of uber eats and stuff like that.

Only thing to add is on scenario 1 - I think the revenue model does change for better for both parties. If I were to have a driverless car and I knew I was going to be home getting loaded having a good time for the next 10 hours - why not rent out my car to uber for 50% rev split? Hell, I'd do it - as long as the payout is more than the cost of ownership it works. The converse is what we have right now - paying for the use of my car AND the driver's time where the driver has to remain sober and can't be home.

I could rent my driverless car when I'm home partying - when I'm away on vacation - when I'm sick - when I'm sleeping - all times that I would be unable to drive for uber. That's the big change - it's like Netflix as a DVD mailer company versus Netflix as a online media company. Now when everyone has a driverless car and everyone wants to rent them out - that's something different, but uber is doing a relatively decent job of balancing pricing with driver pay (though I will say they take advantage of people's naive understanding of financing (i.e., you're not actually earning $15 an hour once you factor in COGS and depreciation).

[gemship]

But I wonder how much you can offset the taxable income with insurance, fuel, mileage and maintenance deductions. I'd keep really good records for everything. Also, wonder if the standard mileage deduction is better than all the other expenses. And, can you choose one over the other???

Probably time to see a CPA...:confused:

I'm willing to bet that the standard mileage deduction is easier to deal with but probably better to itemize expenses. I think it may depend on how dedicated one is to being a Uber driver. If one drove full time then it maybe worth it to itemize but if it's part time then probably just take the mileage rate.

[fiamme red]

Interesting article and graphics: https://www.nytimes.com/interactive/2017/04/02/technology/uber-drivers-psychological-tricks.html.

Uber helps solve this fundamental problem by using psychological inducements and other techniques unearthed by social science to influence when, where and how long drivers work. It’s a quest for a perfectly efficient system: a balance between rider demand and driver supply at the lowest cost to passengers and the company.

Employing hundreds of social scientists and data scientists, Uber has experimented with video game techniques, graphics and noncash rewards of little value that can prod drivers into working longer and harder — and sometimes at hours and locations that are less lucrative for them...

[thegunner]

Only thing to add is on scenario 1 - I think the revenue model does change for better for both parties. If I were to have a driverless car and I knew I was going to be home getting loaded having a good time for the next 10 hours - why not rent out my car to uber for 50% rev split? Hell, I'd do it - as long as the payout is more than the cost of ownership it works. The converse is what we have right now - paying for the use of my car AND the driver's time where the driver has to remain sober and can't be home.

I could rent my driverless car when I'm home partying - when I'm away on vacation - when I'm sick - when I'm sleeping - all times that I would be unable to drive for uber. That's the big change - it's like Netflix as a DVD mailer company versus Netflix as a online media company. Now when everyone has a driverless car and everyone wants to rent them out - that's something different, but uber is doing a relatively decent job of balancing pricing with driver pay (though I will say they take advantage of people's naive understanding of financing (i.e., you're not actually earning $15 an hour once you factor in COGS and depreciation).

the thing that's unclear is whether or not they're actually planning of being in the business of renting other people's cars in the long term (which doesn't seem to be the way their business model is moving).

fwiw - i think the numbers are always going to be a bit fudged with a private company, but they're burning through VC https://techcrunch.com/2016/12/21/uber-losses-expected-to-hit-3-billion-in-2016-despite-revenue-growth/ i'm not sure where the positive revenue numbers are coming from outside of their own projections.

they basically got ousted from china and france after failing to compete with the local taxi services to cut their losses, so it's not like all is peachy there.

[rkhatibi]

Uber did 10B of gross revenue in 2015. (http://www.reuters.com/article/us-uber-tech-fundraising-idUSKCN0QQ0G320150821) Their net revenue was around 2B. Driverless cars are going to massively increase Uber's net. If 10B of revenue in 5 years doesn't earn some validation I'm not sure what will.

Article is dated Aug 2015 and says "projected to rise threefold." I don't believe any public numbers have been released. Best is leaked numbers which state of revenue of 3.6B in first half of 2015.

http://www.nakedcapitalism.com/2016/11/can-uber-ever-deliver-part-one-understanding-ubers-bleak-operating-economics.html

[hokoman]

Off topic - I would like to see big cities like SF and NYC disable uber and lyft and all those other companies for a week to see what impact it makes to traffic and quality of life. When I lived in SF, I hated them because they pull over at all the wrong place looking for their rides.

I have gone into SF twice this past week and it would not surprise me if more than half the cars on the road were lyft and uber cars. There is a place for it in the subarbs, but dense cities is not it.

Btw, valuation is stupid high in my opinion.