Lessons From A Conversation With An Uber Driver Who Earns 80k PM

I emerged from my office at 5pm, earlier than my usual time, one eye continuously on the phone screen, tracking the movement of the guy who would take me home, today. The little black car icon squiggling away on the map, coming closer to the blue pin that’s me. Nagesh Shrinivas, the driver details inform me. Nagesh had apparently miscalculated a turn, and now needed to make a long u-turn, delaying the ETA by a few minutes. And here he was, in a shiny black Swift DeZire, a South Indian man presumably in his early 30s, wearing a Tshirt with jeans. I hop in and am immediately greeted with a “hello ma’am”. I settle in, request Nagesh to put my phone on charge which he obliges only too helpfully. “Maam, should I start trip?” he asks, I nod and off we go.


I look at the world outside me. People like myself, 9-5 employees in this IT suburb of Bangalore are beginning to spill out from their respective IT parks and glass ‘n’ concrete offices. Some are driving, one in a big SUV – one of my pet peeves- adding to the famous mayhem that the traffic of this city is, some are comfortably ensconsed in the big comfortable seats of the AC Volvo, some unlucky ones who have to contend with standing in the aisles of the said bus, one hand dangling from the support with a laptop bag on the back; while some just like me are enjoying the real benefits of a sharing economy in a hired cab. I take a moment to thank this service and this driver in my mind for saving me the nightmare of having to drive- well, I can’t- or needing to learn to drive, of jostling for space in the overcrowded buses, or of losing a few precious minutes of my life haggling with an auto rikshaw driver in a negotiation that beats any I make at work.

The AC is on, there’s no music, and the noises of the outside world are tuned out. With my phone out of reach while it’s being charged, and a dead laptop to boot, I don’t have much to do for the next 2 hours that this ride would take. I wonder what Nagesh is thinking about. Let’s find out, I decide. And here begins a conversation that would make me re-look at my life and career forever after.

Extricating a bag of chips from my bag ever so carefully so as to not disrupt the peace of this cab, I decide food is a good way to break the ice. I hold out the bag by his side and offer. He smiles and says “No maam.” Ok! Someone can apparently eat not even one.

“So, since when have you been with Uber?” I ask in Hindi.

“It’s been 6 months now maam.” He replies in English. Ok, there’s no need to patronise the guy. 

I ask him about his education and I’m pleasantly surprised. Nagesh is a bachelors in commerce and worked at an IT company as an admin clerk before Uber happened.

“From a company to driving cars, how come the change in career?” 

“Maam, office work is too boring. Sitting, sitting in one place is not for me. Uber takes me around, I meet people, get paid on time. Every day, something new. Don’t miss a thing about office”. Thanks Nagesh, you just echoed my thoughts, except you actually went out and did something about it.

That’s nice, I tell him and move on to more casual questions to help him ease into the conversation. Nagesh has a wife and 2 kids who’re studying in a government school. He used his savings of 5 years to buy a second hand car for Uber, he adds.

“How long do you work for everyday?”

“Maam, I start at 7am…and usually do my last trip at 12, or even later”

“Wow, those are long hours.” I do a quick math. “You’re driving 17 hours a day?”

He chuckles. “Oh no no, I don’t do it continuously. I start early to get the people who have just arrived in the city after an overnight bus ride. Then I go for breakfast. Spend an hour or two there. And start again”. That is clever I thought, thinking back to my own trip a few days back when I’d hopped into an Uber immediately after getting down from my bus from Hyderabad, too weary from the long travel to want to bother with the tantrums of an auto rikshaw. On a side note I thought, breakfast afterall is the most important meal of the day.

“So, how many trips on average do you do per day?” I get down to asking the one question I’d been meaning to, the entire time.

“Around 10. But sometimes even 12. An average ride takes about an hour. So I manage to do 10 of them comfortably. But then of course it depends on the demand also. Sometimes we don’t get many calls”

10 rides per day. And if the average pay for one ride is 150,  1500 a day, and deduct expenses for fuel; doesn’t add up to much I calculate.

But I’d be surprised.

“How does the payment model work? How does Uber pay you for a ride?”

“So, basically, Uber pays us a flat amount for being available for 12 hours a day, even if we don’t get any booking. And we get a bonus on every trip from Uber, over and above what the customer pays the app. For eg. if you pay Uber 200, we get 350 from Uber. The 150 is our reward and bonus”.

Plus there’s surge pricing I add. With a dynamic pricing model, the fare can shoot up to 3x times depending on the demand. i.e. the more the demand for a cab in a location, and the fewer the cabs to meet it, the higher you need to shell out to book a ride.

Whoa, that’s a sweet model, I think. It’s a win win situation for the customer and the driver, for whom the earnings are almost unlimited. Well, not really considering that a driver can do only that many trips per day.

But consider this. On an average of 10 trips a day, 200 being the average fare for a trip and 350 being the compensation from Uber, the drive earns about 3500 a day or 1,05,000 a month in revenue. Add to that special allowances and bonuses that Uber metes out to the drivers from time to time. However, after deducting fuel and car maintenance costs, the profits are probably 70% of the revenue, I reason. Nagesh has probably read my thoughts.

“Maam in a good month I’ve made 80 thousand.” I picture my own payslip from the day. I try to smile and tell myself, ok driving around all day in this pollution and traffic has got to suck.

“The harder I work, the more I earn. So it depends on me how much I want to earn. Some days I’m really sleepy and another one hour in the bed looks tempting, but then I get up and push myself harder.” I make a quick mental note of that. This is a reminder we all probably need.  

“I’m happy. My kids are going to a good school now.”

This leaves me with a question. If I pay Uber 200, and Uber pays the driver 350, the other 150 is a loss to Uber. How’s it making any money?

It’s not. Right now, backed heavily by venture capital including ones from Google and Microsoft, Uber follows an invest and user-acquisition model, where its service and the discounted rides is the advertising. (Even though Uber too has started outdoor advertising of late) In fact a Gawker report has pointed to documents that prove that Uber is a mega loss venture as of right now, having registered over $50mn in losses in 2013 alone.

It hopes to poach drivers and customers from close competitors like Ola and Meru apart from the thousand of auto drivers in the city. The bigger objective of course is to become synonymous with commute, gradually encouraging people to be a bigger part of the sharing economy and ultimately, boil down to owning a car vs taking an Uber.

Of course while the customer enjoys most of the benefits, and the drivers are laughing all the way to the bank, it’s a matter of time when Uber may also start charging full price for its service, but by then we’d probably be too used to think of the alternatives. With its big expansion plans in India, and innovative ways to create a lovable brand, this is going to be an exciting future for the cab-hailing app and everyone else who cares to observe.

As my trip ends, and I look at the instant “Your Monday evening trip with Uber. 250” email that pops up on my screen, I thank Nagesh, for once not resenting someone who earns more than me, as I give him 5 stars, and an equally stellar review.