NEW YORK, June 15, 2015 /PRNewswire/ -- In the first-ever white paper examining expenses of a New York City UberX driver, policy and financial analyst Lawrence Meyers estimates a cost of 37 cents-per-mile for the average UberX driver, far exceeding what most candidates anticipate.
The paper found that operating costs, plus 31% in commissions, taxes, and fees, caused UberX drivers to lose 68% of pre-tax revenue on the first $1-per-mile of earnings, and 55% on the first $1.50-per-mile.
Meyers says, "Driving UberX in NYC is not the value proposition naive drivers assume, and explains why veteran hacks return to fleet driving after sampling UberX."
The data, collected from third-party resources, suggests that, "Candidates are lured with the promise of supplemental income without being alerted to ridesharing's substantial costs," Meyers asserts. "An automobile is a depreciating and physically deteriorating asset. Full-time rideshare driving can shorten a car's useful life span by as much as 66%."
Besides drivers' unfamiliarity with operating costs, Meyers expressed concerns about the risk drivers take without holding commercial liability insurance. Such insurance is often prohibitively expensive, so drivers rely on rideshare company liability policies when ferrying passengers. However, limits are negligible when not carrying passengers. Furthermore, carriers can void policies if they discover their client rideshares, even casually, and even if an accident occurs when the rideshare app is off.
"Drivers risk 100% of personal assets if they rideshare without commercial insurance. Virtually every personal auto policy explicitly declares that any commercial use whatsoever voids the policy. In a serious accident, adjusters are thorough with their investigation. You will be discovered."
Statistics show regular drivers are 50% more likely to cause an accident than professionals. Consequently, Meyers cautions that, "New Yorkers are at the mercy of 16,000 UberX drivers who, if they crash into you when they aren't even ridesharing, will have coverage voided. You'll be saddled with medical bills, property damage costs, and zero recourse."
Consequently, Meyers said, insurance companies need to innovate with hybrid policies. Until then, he advises current and prospective rideshare drivers to put their career ambitions on hold unless they obtain commercial insurance.
"The costs and risk associated with being an UberX driver in New York City are significant. Let the driver beware."
SOURCE Lawrence Meyers