Startups – DanHerr.com

Why NO ONE should drive for Uber in Tahoe

Lake Tahoe Uber Drive Says No More

Let me start by saying, I have loved using Uber for convenient rides everywhere from Sydney, Australia to Boston to San Francisco and back again. I am a huge proponent of using Uber in most situations…

…that said, I ran a little experiment over the Holidays when Uber was launching in my hometown in North Lake Tahoe and found that as an Uber Driver in Tahoe I was losing money or barely breaking even at best. Not good! My best trip was netting $1.66 on a $6.00 fare. My worst – being down $12.62 on a 2.5 hour foray (last time I drive to South Lake to pick someone up). Now given, you can say I am only out money if I include wear-and-tear and use the standard mileage rate ($0.575/mi) for my expenses, but even just taking into account direct fuel and maintenance expenses I am making well less than minimum wage while decreasing the value of my car at the same time. Bottom line is, something needs to change with Uber in Tahoe before every driver out there learns the sad truth – it is currently a money losing proposition.

Here is my threefold take on Tahoe’s Uber-problem:

Tahoe is split by two states and you can only pick up in one making most trips uni-directional;
There are very few in-town trips; and
Uber is subject to what I will call the populational gravity effect.

The result is unsustainable earnings at best unless you assume no incremental wear, maintenance or cleaning:

Earnings	before Taxes	after Taxes
– after Uber Fee, Federal Mileage & Phone Data	$ 1.53/hr	$ 1.14/hr
– after Uber Fee, Fuel & Maint (prorated) & Phone Data	$ 6.71/hr	$ 5.03/hr
– after Uber Fee, Fuel & Phone Data (no maint/wear)	$ 12.57/hr	$ 9.43/hr

(more about these numbers below)

Two States

Every Uber forum will tell you not to drive anywhere between trips – it is a useless expense. Since Tahoe is split by two states, many of your trips as a Driver become one-directional because if you pick in Nevada and drop off in California, you have to scurry back to Nevada before you can go back online and begin accepting trip requests again – and those new riders often want to go back across the state line. This means that your costs are roughly double for every trip because you cannot just pick up another trip where the last one left off. If you are a California Driver in Truckee, Tahoe City or South Lake this may not be as much of a problem for you, but I would love to hear your input.

Populational Gravity Effect

By the nature of taking people where they want to go, Uber naturally has a gravitational pull toward populated areas which means if you are working in a less populated area (i.e. Incline Village, Nevada – pop 8,800) near more populous areas (Reno [250,000pop], Carson City [54,000], South Lake Tahoe [24,000], Truckee [16,000] etc), you are highly likely to have a trip outside of town to one of these other more populous areas every day. Once you drop someone off in a bigger town/city you are more and more likely to continue receiving trip requests within that area. If you don’t live in the biggest city/town in your area and you drive for Uber, good luck – every driver eventually receives a trip to that city and at some point you have to return home, only to end up getting sucked into that city again the next day by its inescapable gravity field.

A typical day driving in Tahoe:

Daytime trips to/from Ski Resorts primarily:
- Mid morning (8-11am)
- Mid afternoon (3-4:30pm)
Evening Trips to/from
- Casinos
- Bars
- Restaurants
- Hotels
- Rental Homes

Here is a sample of some trips from Incline:

By the numbers

I invite you to look at my numbers too and tell me what you think: danherrdotcom.files.wordpress.com/2015/12/uber-tahoe-costs-29-dec-2015.xlsx

I can see how Uber would claim a driver “makes” more than $20/hour – but that is before Uber fees, costs to operate etc. From my experience, you can show that during my actual trips (not including before or after mileage) my fares were $282.05 for the 5hr, 14 min and 21 sec I spent “driving” on trips – that is $53.83/hr, but remember I can’t just turn around and pick someone up where I drop off most of the time – I have to drive back to Nevada, and at some point return home. If I include the hours driving to pick up and return from dropping off that quickly turns to $21/hr. But that is not an accurate number – you have to pay Uber, you have to pay for Fuel, and somewhere in there needs to be maintenance and phone costs:

Total Fares/Sales	$282.05
Expenses
Uber Fee	$62.85
Safe Rider Fees (reimbursed by Uber for Tahoe)	$0.00
Mileage to start (@ $0.575/mi)	$34.99
Mileage on Trip (@ $0.575/mi)	$79.44
Mileage returning (@ $0.575/mi)	$83.46
Cell Phone Data	$1.59
Total Expenses	$262.34
Net Income	$19.71
Taxes (25%)	$4.93
Net Profit	$14.78

Breaking this down by the total amount of time I was on the road:

Trip Time	05:14:21	5 hrs 14 min 21 sec
En Route Time	07:40:39	7 hrs 40 min 39 sec
Total Time	12:55:00	12 hrs 55 min 0 sec

Dividing my $19.71 of pre-tax earnings and $14.78 post-tax by 12 hrs and 55 minutes gives you the $1.53/hr and $1.14/hr respectively that I gave above.

Of my driving it broke down like this:

Mileage	(mi)	(per)
To Start	61	18%
Trip	138	40%
Return	145	42%
Total	344	100%

I understand the argument that the Federal Mileage rate of $0.575/mile might be a bit high depending on your vehicle and the actual wear-and-tear, so I included a second and third calculation below. The second set of numbers ($6.71/hr & $5.03/hr) includes 87 octane Fuel prorated by mileage between fill-ups and Maintenance by mileage based upon my 12-month average maintenance expenses (oil changes, tires, tire rotations, checkups, cleaning supplies, etc), but does not include any incremental depreciation or wear-and-tear. The third only includes fuel. For me those numbers worked out to $0.17/mile for fuel and $0.22/mile in maintenance for a total of $0.39/mile.

Earnings	before Taxes	after Taxes
– after Uber Fee, Federal Mileage & Phone Data	$ 1.53/hr	$ 1.14/hr
– after Uber Fee, Fuel & Maint (prorated) & Phone Data	$ 6.71/hr	$ 5.03/hr
– after Uber Fee, Fuel & Phone Data (no maint/wear)	$ 12.57/hr	$ 9.43/hr

Again these numbers do not include any payment for my time sitting around waiting for a request to come in – simply starting when I accept a trip and stopping when I get back in my workable area.

What I have surmised is that the Balance of Uber Earnings (green line) as a function of mileage for an Uber Drive in Tahoe is a losing proposition:

Uber Far & Expenses — Uber Fare, Uber Fee, other Expenses and Earnings Balance by trip distance (mi). View original interactive Google chart at jsfiddle.net/DanHerr/4cmuezmt/4/embedded/result/. Source file is available as well: danherrdotcom.files.wordpress.com/2015/12/dont-drive-for-uber-29-dec-2015.xlsx

I encourage anyone/everyone to have a look at my data and let me know if you draw any different conclusions – perhaps I am missing something. But my recommendation would be that until Uber figures out how to have us pick up across state lines or increases the fares in Tahoe, it is not worth your time to be an Uber Driver.

danherrdotcom.files.wordpress.com/2015/12/uber-tahoe-costs-29-dec-2015.xlsx

Notes & References

In all cases I went back online in Nevada as soon as I crossed back into Nevada again (Nevada drivers are automatically logged out at the end of a trip in California and cannot log in again while in California). There are some cases where I could have spent more time driving outside of my “area” (generally Incline Village and Crystal Bay), but at some point in the evening you need to return home. Generally if I waited for than 15 minutes without any request, I began moving toward home while staying online.

The above generally assumes:

$2.00 Base
$0.20 Per minute
$1.10 Per mile
$5.00 Minimum
$1.70 Safe Rides Fee when/if charged
25% Uber Fee
40 MPH average speed
20 MPG fuel usage when needed
$0.575 Per mile standard federal mileage cost rate when used
25% Tax Rate when there are any earnings

All of the above does not take into account that Uber’s earnings system has issues causing it to double charging me for Safe Rides ($1.70/ride) which they have confirmed via email they are working upon. Above I have taken the assumption that Uber will correct these issues and pay me the balance due of $1.70/ride.

Abbi Whitaker: Reno’s bottom-of-list status rings false with those who live here

Great post by my good friend Abbi:

Reblogged from Reno Rebirth Blog:

I received an email on Friday from the editor of PR Daily asking me if I wanted to comment on a recently released Forbes-commissioned survey which cites Reno as one of the cities with the unhappiest workers behind Boulder, Colo.

Yes, that’s right. Boulder. The mountain town that’s home to Powder magazine and Brad Feld, and was recently picked as one of Money magazine’s “Best Places to…

Project Vesto – A call to arms

Out of the ashes of recession
A state born of the battle, reinvents itself
Makes opportunity in a deserted land
Turns loss into opportunity
And gives new life in an empty void

$100,000 pooled
To start new hope
To launch a new Nevada business
Not what the Project wants
What we the people need
Not California rebranded
Not in Nevada for the sake of a state-shaped logo
But because we are from here
We were born in a great struggle
We were born in the sage and the Basin
We don’t show up to party in the black rock
We were in the desert before the desert was hip
This is not a conglomerate and outside consulting firm
This is not Silicon Valley money
This is not an out-of-state investment
This is Nevada money for Nevada people
This is us, pulling ourselves up
This is our own grunting hard work
Our own get-it-done
Our own micro-brewed, down-home, self-serving revival of Nevada business
Investing in ourselves for ourselves
Reinventing how we, the real Nevadan’s, revive our economy
Revive our business culture
Rebuilding; one startup at a time

We the people of Nevada
Launch Project Vesto
In Nevada
For Nevada
On Nevada Day
Giving new life
With our battle-born business rebirth

Elko to Host Startup Weekend for Entrepreneurs

Reblogged from SWElko:

Elko to Host Startup Weekend for Entrepreneurs
Startup Weekend Elko will connect local innovators
and startup enthusiasts to share ideas and launch companies

ELKO, NV – Startup Weekend, a national grassroots business-launching event, is coming to Northern Nevada, September 28-30, 2012. Startup Weekend Elko will connect local entrepreneurs, developers, designers and startup enthusiasts with mentors and resources for a weekend of sharing ideas, forming teams and launching startups. The weekend-long event will take place at the Great Basin College campus in Elko.

Whether participants found companies, find a cofounder, meet someone new or learn a skill outside the usual 9-to-5, they will be better prepared to navigate the chaotic and exciting world of startups.

“Many of us in Nevada had the rug swept out from our feet the past few years and we’ve had to adapt; become innovative and entrepreneurial to survive,” said Daniel Herr, life-long Northern Nevadan, organizer of the event and a recent participant in the Las Vegas Startup Weekend. “Northern Nevada has a lot of hidden gems and I am really excited about bringing this fast-paced startup proving-ground to Elko. It will be great to bring entrepreneurs from many of Nevada’s smaller North-Eastern communities together.”

On Friday night, attendees will take the open mic to…

One Sand-Skeeball-Sculpture at a Time

Building sandcastles and other sand structures is incredibly similar to being an entrepreneur. Everyone on the beach has the tools and resources to do so right in front of them, but few try for one reason or another. Perhaps some have never thought to try, they do not have the creative vision. Others might think it a cool idea, think back on times as a child, and say, “Well I will be shunned by society if I try; and I’m likely no good at it anyhow, so I won’t bother.”

Growing up my father loved to make his classic Skeeball game on the beach out of sand. I do not know where the idea sprang from to do so, but every summer on the beaches of Ocean City Maryland, we would make grand sand-sculptures: from mermaids, to hammerhead sharks, turtles, and the famous beach Skeeball. The sand was our canvas and we could create darn-near anything out of it; why not create a classic game to play? We would build a giant mound of sand, water it down, pack it out, use buckets to create perfect hole, and personally I loved to build in automatic ball returns for every hole.

Today we were at Big Carona Beach in Orange County, California and after a swim out to the buoys, body-surfing, some paddle-ball and a brief nap in the sun, it felt like time to add my creative touch to the sand for all of my fiancés cousin’s little children to enjoy. Skeeball.

It is crazy the level of doubt at first outset. So many lack the vision. Perhaps it is because I have been there before, made other versions. The fact remains; so many doubt what they cannot see. And the progression is always the same: doubt, disregard, curiosity, desire.

I tried to recruit a number of the kids, and full grown cousins, to help without avail. I did get one young-in to grab me one bucket of water, but that was enough for him. People walk by and you can tell the look on their faces says, “Why is that full-grown man piling up sand; weird. Keep walking.” The slow progression moves toward; “Wow, that is a big mound of sand,” people whisper, “that must have taken him a while.” Not too long, thanks. “What ‘cha makin?” come the next and more curious questions. “Skeeball, wanna help?” “Skeeball hunh? Cool (I think). No that’s alright, I’ll let you do your magic,” followed by a thought of, “Wow, he’s taking this too seriously.” Or “That’s kinda lame; no thanks I’d rather boogie-board. Have fun playing in the sand though (you grown-as man).” I was probably done in 20-minutes or less, though it definitely took longer do it by myself than when I was a kid with my father, brother, sister and cousins helping.

But once you finish, everyone wants to gather around and play the game. “Wow, can I play?” “It’s my turn, give me the ball.” “This is awesome!” And finally those who ignored the call build upon that original vision and make it better once you’ve created it.

The joy in these kids faces as they played the game time and time again was fantastic. The laughs and excitement as they ran around the back to grab the ball they overthrew is that unexpected value and feeling of success that many search for their whole life-through. This value of creating for others out of seemingly nothing is one thing I cherish most in life.

Success is not eminent in the sand; there are many ways for the vision to fall off track. Perhaps you run out of time. Maybe you don’t have great vision at the outset and build it poorly; or make it in haste leaving people to understand the vision but think, “Wow this really had potential, but just isn’t that cool.” Or you could be entirely unlucky and have a wave (or mischievous child) come knock your masterpiece to the ground before completion; but perhaps you could have planned better for this.

At the end of the day, sand will return to sand: bound to gravity and mulled around by the ebbing sea. But for a time, it is possible to build a grand work: as simple or complex as you like. For a time you can enjoy what you have created out of the world’s canvas. For a while you can create value that is life and enjoyment thereof. But understand that in time all will be washed away to not but memories of what once was.

With So Many Ideas, Where Do You Start?

STEP 1

As a starting point, one great piece of advice I received about ten years ago came from a quasi successful man in his sixties. He said, “Make sure you write down all of your ideas. Make a journal of your daily thoughts, ideas, and activities; you will be amazed at what you come up with.” I haven’t been religious about the daily journal, but the times I have more than proved the worth. Human brains are definitely powerful memory-storing machines, but you won’t recall every detail and every thought on command. Everyone has good ideas once in a while, make sure your write it down for when the time comes to use it.

“On résiste à l’invasion des armées; on ne résiste pas à l’invasion des idées”
(Commonly: Nothing is more powerful than an idea whose time has come)
– Victor Hugo

We have all seen (or will see on the new moon of April 21st) with KONY 2012 how powerful an idea can be. Whether its an improvement to a procedure at work or a fresh, innovative, new business idea; write down every idea that comes to your head. At a minimum send yourself a quick email or text message. Find a way to save those ideas. I currently have a dumb phone so I text message (yes, using T9) my Gmail address where I have a filter that labels stuff from “530….@vtext.com”.

Step 2 … Enough with the steps already, just Nike it…

If you’re a thinker, a want-to-be entrepreneur (or have religiously completed STEP 1 really really ridiculously well outlined above 🙂 ), you’ve likely has a great idea or two, but don’t know which to do. Or perhaps you work long and hard to dream up ideas, but you can’t pick one. Well heed this advice from yours truly:

There are enough damn thinkers,
what the world needs are doers;
so pick one and get started already.

You must have a reasonably good idea as your foundation, but in my experience making it with your business is like everything else in life; ambition, determination, problem solving, and a bit of naïveté at the start. Earlier this week I was having a conversation with Duncan Campbell, a very successful serial entrepreneur from Portland and more recently the founder of “Friends of the Children” non-profit (or social business if you will). Mr. Campell said to me, “If I could give you one thing from this conversation it would be to pick one thing and focus on it for 2-3 years. It doesn’t have to be what you do for the rest of your life. The thing is, very few people can do 2 things well. Pick one and focus on that for now.”

^– [This is me stoked at the top
of the steepest street in the world
(Baldwin Street in Dunedin, NZ)]

Step 3

There is no step 3. Keep working your butt off.

Thank you for reading my blog – Daniel S. Herr.
If you are interested, I invite you to follow me on Twitter @DanHerr
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P.S. – If you’re curious what this means for me:
Recently I have been working on a crowdfunding for solar PV business model, an volunteer incentivism social business, the foundations of an entrepreneurial ecosystem locally, adding a new division of renewable energy to an existing company, consulting on a few small ventures, and getting my MBA. I have made a commitment to become more focused this year on my own business needs by delegating some of my ideas to businesses, institutions and individuals that can and would like to bring them to fruition, even as their own ideas.