Uber Drivers Should Sign up for Hourly Guarantees
In my last blog post, I talked about how Uber Drivers can make more money with lower fares. It’s no secret that surge pricing is the key to potentially doubling your income on Uber and it comes at the expense of customers. Uber knows this is hurting their brand as many Uber passengers note how they are frustrated with surge pricing. Uber tries to reduce surge pricing by getting more drivers out on the road with hourly guarantees for the past 6-8 months.
If you plan on working during the times of the hourly guarantees, you should sign up for them, regardless of how much it is. Here is the list of reasons why:
- It provides a safety cushion on your earnings. What is worse, not signing up and making below $25 an hour, or making $25 hour and above? Stock brokers use collar options to limit potential losses and drivers should do the same.
- Other drivers are signing up for these guarantees. Depending on how much the guarantees are, there will always be someone signing up for these hourly guarantees.
- When there are hourly guarantees, there is a chance that there are too many drivers out on the road, so you will only get a ride or two an hour. This means you will be lucky to clear $20 an hour so signing up for the guarantee will prevent you from earning less than you should.
Needless to say, if you don’t plan on working, don’t sign up for the guarantees. You don’t want to tell Uber that you are willing to work for a certain level of hourly guarantees. I am sure they analyze this kind of stuff and tailor hourly guarantees based on response and the market. Some markets may require a higher hourly guarantee than others.
Should You Work for the Hourly Guarantees?
This will depend on the guarantee, requirements, and what its worth to you. For some, they won’t drive unless its $30 an hour. We all know that there are drivers willing to drive for less. What is your number? This is something you’ll have to decide for yourself.
I am not advocating to always drive during the guarantee. With the recent string (in Jan 2015) of price cuts, Uber is implementing fare guarantees. Some of them are decent but others are just too low. I have seen guarantees as low as $14 an hour during non peak times. It may work for some drivers but after Uber’s commission, that is only $11.20 an hour and you still need to pay for gas and wear and tear.
If you do choose to do the guarantee, make sure that you can meet the requirements. Often, they have a requirement for number of trips so make sure you can get enough requests to meet this requirement.
Strategy when working during Hourly Guarantees
When you sign up for hourly guarantees, you will need to work smart. Check out my Top 10 Ways to Boost Driver Income report to get some tips on how to work smarter on Uber and Lyft.
As an advanced tactic to boost earnings that is not on my report, I keep track of how much I am making per hour when I am driving. I add up my fares and note how long I worked for to get my hourly figure. It is CRITICAL you do this during hourly guarantees.
- If you find yourself ahead of the hourly guarantee (making more per hour than the guarantee), you will need to keep up your driving habits and make sure you clear the hourly guarantee as now you’re out there to make as much money as possible
- If you find yourself below the hourly guarantee (making less than the guarantee), you should be doing as little driving as possible. I will do things like parking next to my last drop off and waiting for my next call. I am already behind on the hourly guarantee so I won’t be working as hard to get the next trip as I am already guaranteed a minimum hourly salary. I usually park near my last drop off so I can limit my expenses
Ultimately, its a judgement call on which tactic you should use when you are signed up for hourly guarantees. Some drivers can’t afford to use technique #2 by driving as little as possible as they really need as much money as possible. Normally when I am below the hourly guarantee, it usually shows me that there are a lot of drivers out because of the guarantee and that nothing I can do will get me to make more than the guarantee.
Also, during the night and things can change in the middle of your shift:
- If you were initially below hourly guarantee and after two surge priced trips, you are above the hourly guarantee, you will need to change your game plan to try to get as many trips as possible. Again, don’t chase surge pricing. There is a post tomorrow about Surge Drop and this is the main reason why you don’t chase surge pricing
- If you were intially above hourly guarantee and after a slow hour or two, now you are below the hourly guarantee, you will need to switch strategies to drive as little as possible so you can cash in on the guarantee and also reduce your expenses and depreciation on your car.
Both of the above strategies rely on the driver to be constantly evaluating their hourly income in order to optimize their strategy for the night. Doing these small tweaks throughout the night may only amount of $5-$10 an hour but over the course of a few weekends, it can amount to hundreds of dollars.
I have worked during $40 an hour guarantees. Needless to say, I did the second option of driving as little as possible. I was commonly parked in downtown and only getting about 2 short rides an hour. Uber ended up paying me about $20 an hour on top of my fares. This is a pretty extreme example but you will need to decide which technique works for you. Are you out to maximize your income or are you out there to make some money with the least amount of effort?
Driving for rideshare companies can be easy work but there are a lot of dynamic factors that affect your earnings and you need to keep up. After this post, do you feel like it is easy to work for rideshare?Have more questions about Uber or Lyft? Head on over to our Rideshare Driver Training Course! Driver Promotions