Monday, February 06, 2017

Uber Vs. Lyft

I have been driving for Uber since October 2016 (nearly five months now). Recently (about three weeks ago) I was accepted to also drive for Lyft. Simultaneously, I was certified to drive in King County, Washington, as well as my native Pierce County, for both Uber and Lyft.

Many people have asked: Which do I like better, Uber, or Lyft? And what's the difference? I thought I might use this blog post to try and answer that question.

Driving for Both Uber and Lyft

I can drive for both Uber and Lyft because I am an independent contractor, a driver for hire. Each company has very similar requirements, though in this county, Lyft is probably more stringent. (They require licensing in both Seattle and Tacoma, whereas Uber just requires Tacoma. Lyft also requires a Washington State business license; Uber does not. Both require a federal defensive driving course certificate, and also city knowledge courses, as well as passage of a vehicle inspection and background security check.)

The Seattle business license is more than twice the price of the Tacoma one. But now that I have a driver for hire business license in both Tacoma and Seattle, I can pick up riders in both Pierce and King Counties. Which means I don't necessarily have to "deadhead" it back from an airport fare, but can pick up riders on the way back. (This sounds great in principle, but I have yet to find any riders returning from the airport. There is a long queue for both Uber and Lyft drivers at the airport.)

Both Uber and Lyft use sophisticated apps for drivers. It is easy to tell the app you are available for riders. I typically turn both apps on at the same time, and wait for my first rider. If the pickup is within 20 minutes, I accept the fare, and turn the opposite app off for the duration.

What I Like About Driving for Both Uber and Lyft

Both services give you a great deal of flexibility. If you want to work, you simply turn on the app. When you are done, you just turn it off, and that's that. As an independent contractor, you are basically your own boss.

With both services, I've found you have the potential to make between $10 and $20 per hour. They both advertise that more is possible, but I have yet to figure out how to actually make more. So much simply depends on the luck of the draw: The fares you get, how quickly you get them, how far away they are (your drive to the fare's pickup location is totally on your own dime), what kind of gas mileage your vehicle gets (you pay for your own gas), whether or not the fare is picked up in a "surge" area (more about surging later), how far the fare is traveling, etc.

What I Don't Like About Driving for both Uber and Lyft

My main frustration about both services is that neither tells you (until your fare is in the car) exactly where you are taking them. For all you know, they're going to Montana, and once they are in your vehicle and you discover this, you are pretty much committed to taking them there. This is (obviously) a major problem for drivers.

One Sunday afternoon I wanted to do a little driving. My first fare was to the SeaTac airport, a 45-minute ride up from Graham. I got paid (minimally) for the 45 minutes up, but the 45 minutes back were at my own expense. (This is called "deadheading.")

My next fare wanted to go to Seattle. I made a little bit more on the ride up, but now the deadheading back took an hour.

I decided to take one more fare, and prayed it would be local. It was nearly dinnertime and I was quite tired. But they wanted to go to a restaurant north of Seattle. It took more than an hour to get there, and at least that much time (unpaid) back.

I had invested more than 5 hours of driving the three fares. I made a little over $100, but my gas was probably $30, so $70 for 5+ hours of driving. Barely over minimum wage, and I was exhausted.

What's worse is when you drive out a half hour to puick someone up, only to discover they want to go 2 miles. (They could have walked.) You make the five or ten-minute drive with them, get paid about $5, then have to drive a half hour back to your point of origin. You've invested over an hour (plus about $5 or $10 in gas) for a $5 fare.

This could all be prevented if both Uber and Lyft would simply tell you (before you accept a fare) their destination. But neither do, because they want you to accept every fare, even if it means you as the driver get the shaft in the process. Both services obviously care more about riders than they do about drivers.

Pros and Cons of Each

This major drawback is partly alleviated by something Lyft does which they call "destination mode." If you go to the airport, you can move into "destination mode," which means you tell it you only want fares that are heading your direction (home). You get far fewer fares, but at least you don't wind up with someone who wants to go north of Seattle while you are trying to head south toward home (and dinner).

But, in this county at least, Lyft has far smaller market penetration than Uber. This means you get fewer requests, and that you have to travel further for the few you get. I frequently get pings from Lyft to ask me to pick up a fare a half hour away. My personal cutoff is 20 minutes, but I have no way of telling either Uber or Lyft this, so I end up denying a lot of requests, and they chastise you for this (if your "acceptance rate" is "too low").

However, most drivers (and riders too) seem to like Lyft better than Uber. I think this is because their customer service is a little better, and there are a few things they do that make more sense for both drivers and riders (like allowing drivers to filter according to destination).

Lyft also allows riders to tip using their credit card, and Uber does not (although we drivers can accept cash tips from Uber riders).

Because Lyft's market penetration is lower (at least here in Pierce County), that also means Lyft riders experience longer wait times for a ride than Uber riders do. Which is probably frustrating, since they are paying a little bit more than Uber riders.

Surging

"Surging" happens when a supply-and-demand algorithm determines that there is a higher demand for drivers than there is supply in a given area, and therefore prices for the riders increase. I have seen surge pricing go as high as four times the normal fare, and I've heard it can go even higher than that under extreme circumstances.

In this area, Uber surges daily. I have yet to see Lyft surge anywhere.

But even Uber's surges are very unpredictable and temporal in nature. Surges often last just a few minutes, much quicker than you can typically get there. And by driving into a surging area with your app on, you may change the supply-and-demand balance. I've frequently seen surges evaporate in front of me as I drive into surging areas with my app on.

Also, the services inform riders about surge pricing, and they are often savvy enough to know that if they wait a few minutes, the surge might evaporate. So I've had the frequent experience of driving through a surging area, only to get fares as soon as the surge has ended.

This experience leads me to believe that surging is primarily a gimmick to entice drivers to get out there and drive. It's a rainbow to chase, that you can rarely catch. I have (by sheer luck) gotten one or two surge-priced rides, but such things are rare. So, mostly I've learned to ignore surging, and just drive when I am available to drive.

Conclusion

For me, the jury is still out. Both services are so similar, though there are slight advantages (in different respects) to each. As a driver, I'm perfectly happen doing both Uber and Lyft, at least for the time being.

3 comments:

Larry Short said...

For those who might be looking for more info on how well Uber and Lyft pay, yesterday I drove for 9 hours and had the best day I've ever had, making about $195. There are several reasons for that, but part is high demand due to the recent snow and ice issues here. Because I am now able to drive both Uber and Lyft, in both Pierce and King counties, I had two airport runs and was able to fill in the gap between them with other local rides in Federal Way, Auburn, Kent, etc.

That $195 is gross, not net, so you still have to deduct about $20 for gas. (I would include depreciation but I can claim the mileage on my income tax, so that's probably a wash.) So if you subtract an hour for down time, and divide $175 by 8 hours, looks like I made just under $22 per hour driving. That's as good as it gets for me, so far. (My previous record was $125 for about 7 hours of driving, deduct $15 for gas and you get just under $16 per hour.)

Many other days I haven't been so lucky, and don't think the wage equalled the state minimum. It really depends on the luck of the draw, how many riders are out there and where they want to go.

Hoping I'll continue to get better at this and have more $20/hr+ days!

Larry Short said...

Another note, yesterday while delivering fares to the airport in my Subaru, I took a look at the queue for for-hire drivers (both Lyft and Uber). There's a waiting lot full of Priuses. In order to pick people up at the airport, you are required to be driving a 42mpg+ vehicle, so mostly that means Priuses. You drive into the lot and automatically get placed into the queue.

Several days ago when I was there, the queue was about 150 vehicles long, and they said the wait would be over an hour. Not worth it, unless you have a good book to read.

Yesterday morning (when I assume arrival travel was much lower), the queue was 43 for-hire vehicles. Probably 20 to 30 minutes of waiting, I assume.

Since I wasn't driving my Prius, I couldn't get in the queue (I could drop off but not pick up). So instead I drove 15 minutes south and ferried passengers in Federal Way while I waited for my next pickup.

Sometime when the weather is nicer I'll drive the Prius up and try out the queue and see how it works out. Stay tuned.

Larry Short said...

Something happened today that further heightens my perceptions of the distinction (for drivers) between Uber and Lyft. Last week Darlene and I spent a few days on Fox Island (which is accessible by a land bridge to Gig Harbor), and I did some driving (for both Uber and Lyft) in Gig Harbor while we were there.

During the prior week, while driving for Lyft, I had taken someone from Tacoma out to look at some property off the Hood Canal, then back home to Kent. I passed over the Gig Harbor bridge twice, but you only have to pay a toll on the return to the Tacoma side, so I paid $6 in cash (and got a receipt). If you have a GoodToGo pass, you can zoom through and get charged only $5 for the privilege.

A week later, while staying on Fox Island, I ferried a passenger from Gig Harbor up to a hotel near the SeaTac airport. Hence I paid the same fare (again, $6 in cash) during the ride.

Both Uber and Lyft claim they will reimburse such tolls. A week later, I doublechecked to see that they had. Lyft had not yet reimbursed me. Uber had reimbursed me $5 (not $6). So, I contacted both and asked them to make it right. I was asking Lyft for $6, and Uber for an additional $1.

Lyft replied promptly and explained their policy was not to reimburse cash fares, but only automatic fares. But since this was my first time, they would reimburse me the $6.

Uber replied and said they would reimburse me the additional $1 if I provided a receipt. So I dug through my records, found my receipt, scanned it, and emailed it to them at their request.

They then replied back and said they wouldn't reimburse me the $1, since according to their policy (which isn't stated anywhere I can find) you have to request said reimbursement within three days!

Uber is willing to stiff me for a measly dollar, while Lyft (even though they don't have to per their policy) willingly reimburses me for the full $6. Hmmm.

I replied to Uber and had some choice words to share. They may fire me, we'll see. But this whole situation was (to me) a perfect illustration of the apparent reality that Lyft places higher value on its drivers than Uber does.