By Josh March 9, 2018
[This is Part 1 of a 3 part series on the ups and downs of my first side hustle. I will link to Parts 2 and 3 at the bottom.]
Before I get started, I need to give a little bit of background as to why I ever considered becoming an Uber driver:
- I spent 8 years as a City Planner in my area, so I know the area very well.
- I had just started a new job, which allowed me to work from home and completely eliminate my commute. I figured I might as well put my car to good use, otherwise it would just sit in my parking spot.
- I was driving a BMW 525i, on which I only owed about $2,500 at the time. My thought was that I could drive Uber, make some extra cash and pay off the loan. I completed that in only 2 months.
- I’m don’t really get excited about going out to the bars and wasting money, but figured this might allow me to at least get out, socialize, and make a little bit of money. With the cash surplus, I maxed out my Roth IRA for the first time, and started a taxable brokerage.
I had heard about Uber maybe 6 months earlier, as my brother in law had been a driver for a while in Indianapolis. Indianapolis has major sporting events throughout the year, with the Indianapolis 500, Colts, Pacers, Big Ten championship games in various sports, etc. I live in Southwest Florida, which is a tourist destination in the winter months for people up north who are escaping cold, snowy weather in favor of beaches or golf trips.
One thing I really liked about the opportunity to drive with Uber was that I was able to make my own hours. With the Uber Partner app, I could turn on anytime I wanted to/was available to drive, and I could shut it off anytime I wanted to/needed to do something else.
Uber works based on GPS, so the closest available driver gets the first opportunity to accept or decline the ride request. We only have 15 seconds to accept, or else the request is passed along to the next closest driver. This practice provides for the ride to be provided as quick as possible to the passenger, while all-but-avoiding requiring a driver to drive across town just for a pickup. This is a major advantage over traditional taxi services in moderately-sized cities.
In the early days, there weren’t a whole lot of rides to be had, and sometimes I would have to drive 8-10 miles for a pickup, and the passengers would only be going a mile or so down the road. But because Uber needed for there to be some level of coverage throughout the area, they ran driver promotions that would pay up to $20 or more per hour guaranteed, as long as the driver stayed logged on and performed an average of one trip per hour. That lasted a few months, as Uber ridership began to grow.
In this aforementioned touristy area, lots of trips begin or end at the airport. Again in the early days, this was not a problem. We would sit in the cell phone lot and wait for a ride request to pop up. But as more drivers came along, the “game” became more competitive. Some drivers would figure out a location to park their car where they were slightly closer to the terminal for the ride request to ping them instead of the other drivers in the cell phone lot, but those locations were remote; sometimes a 15-minute drive from the terminal, which I thought was excessive to make our passengers wait that long.
I was only driving part-time, usually just Friday and Saturday nights for 4-5 hours, and I was easily bringing in $200-300 every weekend. It was much slower in the summer months because that is our rainy season, coinciding with the Atlantic Hurricane Season, so tourists don’t flock to this area in the summer months. Still, there were plenty of people beginning to use Uber to go to/from bars and the beach, especially on holiday weekends (Memorial Day, Independence Day, Labor Day weekends) so I had a slow but steady bit of business coming in.
I also seemed to do better than most drivers in terms of my driver rating and in tips. Drivers and passengers each have the opportunity to rate each other, which provides for accountability for both parties. You can’t be an awful driver and last very long on the system, because your passengers will report you to Uber. Conversely, you can’t be an annoying, loud, obnoxious, or messy passenger very often, or you will have trouble getting drivers to accept your ride requests from a 3.2 out of 5.0 star rider. I was never very good at small-talk until I was driving every weekend for Uber. Most people appreciated my knowledge of the area, or recommendations for restaurants, site-seeing or golf. It also helped that I am a single guy driving a BMW, which I kept meticulously clean. It compared well against other Uber cars, which doubled as family cars when not in service with Uber. Despite it being a 2007, I was constantly being asked if it was new, even up until a few months before I traded it in for my current car in August 2017.
I continued to push harder and harder with my Uber side hustle, but the income was limited by the amount of business in a given area at any given time, divided by the number of other drivers online and available in those areas. Because of the way the GPS-based system worked, there was no way to differentiate myself as a top driver that passengers could request in lieu of the straight-up-gambling option in the app. But one time, I had a sweet old lady of 75 years of age, who asked me for my business card so that she could contact me directly whenever she needed a safe ride to the doctor’s office, airport, or to a restaurant or wine bar. I was ashamed to admit that I didn’t have business cards for my side hustle, since I only operated on the Uber app, and it was all random. She explained that at her age and condition, she didn’t want to just trust anybody, and she has her own driver in every city where she travels and has a home. She gave me $10 and said “go to Vistaprint and get 500 cards for $9.99” so I did that and have turned her $10 into more than a few thousand by offering scheduled pickups for airport pick-ups and drop-offs. This was finally one area where I could differentiate myself from other drivers, providing a private car service with a well-groomed driver and a clean BMW sedan.
Everything was going well (except my sleep schedule on the weekend) but there was still a limit on how much I could make. And I would go through periods of being completely burnt out…