Uber trips are becoming longer and faster, but are they more profitable?

The following report and analysis was done by SherpaShare in collaboration with Simon from the Rideshare Dashboard. SherpaShare looked at Uber markets across the US and selected 10 of the largest Uber markets in the US for further analysis.

The length and speed of Uber trips are increasing

Uber Trip Distance Change 2015 via SherpaShare

The US average Uber trip distance has increased by 12%

We noticed this trend in certain markets but this was the first time we dove into the data in greater detail. In the 10 cities analyzed, the average trip distance increased by 13%, while the national average trip distance increased by 12%.

In addition, Austin, Chicago, and Dallas all grew by over 20% with Dallas showing the largest trip length increase at 30%, increasing from 7 to 9 miles.

The explanation for this increase? Most of the time, Uber (and Lyft) will launch in a new market within a tight coverage area and after a few months will expand coverage area into surrounding neighborhoods. Uber launches in this manner to ensure an adequate demand of rides in the coverage area and enough drivers to meet this demand.

Once there are enough drivers, Uber and Lyft will expand the coverage area. This expansion leads to an increase in potential customers and rides as more customers fall into the coverage area. Also, more drivers in surrounding areas will sign up as drivers, growing the entire rideshare ecosystem. It is common for many of these drivers to drive into the city center if they can’t find rides where they live.

While 12% may seem a lot, the national average trip distance is 6.4 miles, so 12% is only about ¾ of a mile. Drivers may earn another 50 cents or so from the extra mileage, which amounts to about a 5% increase in the total trip fare.

 

The US average Uber trip speed has increased by 9%

Uber Trip Speed Change 2015 via SherpaShare

While average trip distance has increased by 12%, what was most interesting was that the average trip time only increased by 3%. This results in a 9% average trip speed increase. This was calculated by dividing the average trip distance by average trip time. This surprised us as we would have expected trip speed to stay relatively unchanged.

Austin, Dallas, and Washington, DC had the highest increases in trip speed. In Dallas, the average trip went from 28.4 to 32.8 MPH, and in Washington, DC from 19.3 to 22.6 MPH. Across all US Uber markets tracked, the average speed went from 24.9 to 27 MPH.

The explanation for this increase in speed? This may be a result of the locations of expanded coverage areas – longer trips that involve more use of highways for example, increasing the overall trip speed. But does going faster necessarily mean more money? Does driving outside a slow, congested city center really give you an edge to maximizing your take home pay?

Here’s the catch: As your per mile cost of operating the vehicle stays roughly the same, the longer the trip distance, the more spent in operating your vehicle. (Here are some tips on tracking your full driving mileage). As a result, gross earnings may only marginally increase due to longer trips over the same period of time. And this will be further impacted by the lower rates.

What do you think?

Below is the summary table for the 10 cities that were looked at in more detail, included increase in distance and speed throughout 2015. Want to see more Uber data? Check out our data archives. 

 

Increase in Distance* Increase in Speed**
Austin 24.9% 14.0
Boston 8.2% 8.5%
Chicago 19.6% 12.2%
Dallas 29.6% 15.6%
Washington, DC 17.6% 17.1%
Los Angeles 5.2% 3.1%
Orange County 1.5% 0.1%
Phoenix 4.78% 2.4%
San Diego 14.7% 1.8%
San Francisco 6.2% 8.4%
National Average 12.6% 8.8%

*Distances were based on Q1 2015 average trip lengths (Jan-Mar) as compared to Q4 2015 average trip lengths (Oct-Dec). **Speed was based on average trip distance divided by average trip time, converted into miles per hour (MPH).

28 thoughts on “Uber trips are becoming longer and faster, but are they more profitable?”

  1. The increase in trip speed and trip distance can also be relative to the declining cost of each trip. Passengers know that they can go further for less.
    My question to everyone is can we maintain our vehicles at such a low wage for very much longer?

    1. No, is the answer. Las Vegas is down 30% as of Dec. We are at $110 and .22 a min. A drop below that and I’m out of Uber. The old $185 and .30 was excellent and was still cheaper than taxi’s. Our riders loved us then for cost and convenience. Uber is just getting in a hurry to push everyone else out of the market. The drivers are the one’s that suffer. Uber had a big party at the Palms last month for it’s management. They paid Beyonce 2 million to perform.

    2. Sharpashare can say all it wants and analyze whatever data it collects to its liking. The fact is, we know that such vast data can be interpreted in many ways and can be manipulated to favor one or the other, just like Uber does with its data and the shameful claim that “more fare cuts mean more profit for drivers.”

      The truth for me is what I used to make in 4 hours now takes me 10 or more, and costs me much more to operate. This is mainly because of two important factors: the relenteless fare cuts and saturation of the market. I also know that the more trips I make the more uber collects safe ride fees and commission (more profit), and on the other hand, the more I accumulate debt (because I operate below cost). Uber needs more fresh and new drivers to feed on the machine and grow fast (greed and capitalism at its worst). Please understand, the last thing Uber needs is matured drivers, because they stand on the way.

      Although the uber model is not sustainable, isn’t capitalism all about greed and the eventual destruction of the environment and its inhabitants?

      The fare cuts not only devastated my revenue but also my personal health, social life, and my vehicle (fast depreciation, increased maintainance and gas costs). The long hours of work also induce stress and increase the risk of road traffic accident – thereby exposing drivers for all kinds of citations and the doubling of private auto insurance premiums.

      Therefore, ZoZzo calls for drivers to unite and put a break on the Uber machine. Local unions are more effective and should be coordinated electronically. Drivers need not to be gathered or yell by uber headquarters but seat in their cars and watch the surge go crazy and render the system useless; and upset the customer base. What drivers need is modern electronic union not the old-traditional Unions.

      Drivers unite, ZoZzo.

      1. Interesting comment. You make some good points. Drivers uniting isn’t going to happen on a large national scale across the US. You might get it in some markets like Seattle, New York, perhaps Chicago & Boston, I’m not sure about other cities. What Uber is doing is the same thing cab companies has been doing to drivers for years, decades even. Taxi drivers have always complained about how they are being treated but never did much about it except — complain. When I go out and sit in the queue at the airport, I see the same drivers that used to drive taxi are now driving Uber. They’re not gonna unionize. They will continue to accept status quo and that’s what Uber and companies like Uber are counting on.

    3. No we can not even pay for csr wash. Last week I made 7 dollar an hour . And that was my best week in two months driving.
      yesterday I canceld a trip . My pic up was about 9 miles in trafic 27 min . Drop off 2.7 mil 10min for $3.00 . Can’t even get a mocha at stsrbuck.

  2. Why would uber pay $3.75 (NET) for a short trip, when you have already driven over 6 miles for a pickup of 4 riders. Does your insurance covers all 4 riders for $3.75 ? Really, are we partners?

    1. And how is it a ride share? When we have to drive longer then we should . Plus we are rated on acceptence of trips. If we dont do better then 90 percent they will block you. So how is it yhat they cliam we have a choice what rided to take or not?

  3. All that I know is that I am glad I am driving in Seattle where it is $1.35 a mile, and $2.75 a mile when I get XL calls! Looking at the numbers it looks REALLY rough in other parts of the country.

  4. At this rate $ 1.10@ mile is less than minimum wage . Giving Ride with &50’000.00 Lexus for $3.75/ ride. You do the math.

  5. The reason the trips have gotten faster is simple; uber drivers don’t get paid for time or mileage, So we want you in and out of the vehicle as soon as possible. Why do you think there are strikes all over the country? I know for a fact I’m wham bam thank ya ma’am.

  6. Hi Big Willie,

    You got the point, and that is why I coined a different term and strategy to organize the new generation of rideshare drivers: “electronic union.” I hesitantly used the word “union,” and for lack of a better term of course. The point is, this dynamic and savvy force needs a new name, startegy and way of organizing to protect itself from constant bullying of Uber. And for now, we do not need to worry about the old guard.

    Like you said, the old union way of doing business won’t take us any where. Therefore, text messaging, phones, blogs and emails should be our means of communication in organizing ourselves in our respective localities. Organizing should start with a few members with solid trust and understanding among each other (believe me, it is tough but sustainable). For instance, if ten uber drivers cam coordinate their work and talk to each other, solid work can be done interms of increasing membership and talking to Uber.

    A tip: in addition to the competition war with Lyft and number of other reasons, I believe Uber is slashing prices to maximize its revenue from the so called “rider/safe ride fees.” With a $1000 deductable, this is a free money for Uber and its insurance affiliates. As you might know, majority of accidents that involve uberx are minor and cost much less that $1000, and mosly paid by our private auto insurance or out of pocket. Remember, no matter how much a trip costs, safe ride fees are fixd charges (range from $1.35 – $1.55 here in Washington, DC). Without an oversight, God knows how these fees are determined, collected and distributed. The more an uber driver labors to make – let’s say $100, the more uber collects the safe ride fees. It used to take 3-4 rides to make a $100 a year or so ago. But now it takes me at least 15 rides to make $100, and imagine the amount of safe ride fees made. This is just the beginning, we can talk more. Pls comment.

    Respectfully,

    ZoZzo

  7. In Ct the trips are longer and making less money. Less highway. More wear and tear on your vehicle. It doesn’t pay. I will do 20 rides. Be out 8 hours and still haven’t made 100.00. All short rides.

  8. One more point Big Willie,
    I beleive most of us have a daily buget goal to meet driving for Uber. For instance, I need to make $100 every day to make ends meet. Once I make the $100, I’m done for the day. Believe me, from the data it collects Uber knows this very well and constantly devices a plan to squeeze most out of our labor and time (remember “eliminating the wait time” argument Uber likes to makes?). Uber cleverly exploits lack of regulation and loopholes in technology, commerce, finance and labor laws. Deregulation and lack of regulation in the financial sector for the newly created financial products were among the main reasons for the 2008 financial crisis. Uber is just doing the same until the law and organized drivers catch up with it.

    For example, in 2014, from Wash., DC to BWI an uberx trip used to cost $85.00. In good days, I make fewer than two of those trips and meet my $100 goal and exit the market. Today, however, the same trip costs about $40 (more than 50% cut in under 2 years). The point is, while the Uber commision varies by cost of an individual trip, safe ride fee remains the same regardless of how much a trip costs. This makes revenue predication easy for Uber, and in fact, the price slash has a multiplier effect on safe ride fees. This is just the tip of the iceberg ……

    Let’s organize ourselves, fellow drivers

    ZoZzo

  9. Uber is greedy. Driver just need to stop driving. I can see people talking here are Educated so if you talk, walk the talk. I don’t know why Uber is so insensitive to the plight of the driver whose work help make uber executive richer. It is sad.

  10. Dallas was probably because of the aiport (DFW) opening August 1st. It’s about 20 miles from downtown and should have boosted the figures nicely. IMO.

  11. Uber was my primary until the rate drop. Until they restore the rates I’ll be driving solely for Lyft… the company that seems to care more about protecting their drivers.

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