What is The Opportunity of Rideshare Economy?
With apps like Uber and Lyft have turned the rideshare economy from a dream into a reality, many aspiring workers are mulling making a living by shuttling passengers to and fro.
Despite the widespread popularity of apps like Uber and Lyft, however, many hurdles to success in the ridesharing economy could make it untenable for many modern workers.
From the wear-and-tear on your personal vehicle to the potential dangers you’ll encounter, making a living in the rideshare economy is more complicated than it looks.
Can you really survive the rideshare economy? Here’s what you need to know before signing up to become your neighborhood’s next Uber driver.
Your vehicle will rapidly deteriorate
If there’s one thing that’s certain about the rideshare economy, it’s that your vehicle will rapidly deteriorate as you attempt to deliver passengers to their destination in as timely a manner as possible. As you likely already know, Uber and Lyft won’t provide vehicles for you to use when you sign up to become a driver.
As a matter of fact, one of the reasons that Uber has managed to attain such a massive valuation for itself is that the company hasn’t had to spend nearly any of its cash on “assets” like cars, trucks, and other things traditional taxi companies had to shell out for. Whether this was a savvy move for the company’s long-term share value remains to be seen, but drivers who aren’t interested in the stock market should be more interested in what this means for them – your vehicle will be on the line, not Uber or Lyft’s.
Anyone who is seriously considering making a living in the rideshare economy should take plenty of time to do their homework on how much it costs to drive your own vehicle around on behalf of a ridesharing company like Uber or Lyft.
Having the wrong car, for instance, or being in an area with notoriously shoddy infrastructure are surefire ways to deliver your vehicle to an early grave in the junkyard. Having a comprehensive understanding of your local infrastructure and a thorough ability to maintain your own car will be an essential part of making a good living through the ridesharing economy as time goes on.
There’s also a particular element of stress associated with the rideshare economy that must be considered by those who want to become drivers.
If you’re a people person who looks forward to the idea of welcoming strangers into your vehicle to chat, think again, as rideshare passengers can be a diverse and fickle lot. Furthermore, studies have demonstrated that Uber drivers report high-stress levels, likely because they spend so much time behind the wheel that they’re susceptible to road rage.
Georgetown researchers uncovered that a group of Uber drivers that they sat down to talk with was suffering from high levels of stress and excessive debt that put a severe financial strain on them.
You’ll be an independent Rideshare contractor
If you really want to make a living in the rideshare economy, a question you’ll have to ask yourself sooner or later is whether you’re comfortable living as an independent contractor. This is because Uber drivers aren’t actually employees with delivery jobs but are instead considered independent contractors charged with their own responsibilities.
This helps the company evade liability and push the costs of maintaining such a ridesharing service towards consumers and drivers rather than taking from corporate coffers.
Knowing that Uber doesn’t want you to become a long-term employee is essential, as it has grave consequences for the wages and benefits you may receive if you become a member of the rideshare economy.
It also means that the company’s long-term viability can be called into question; regulators and activists want Uber drivers to be considered employees, but the company warned in its prospectus that such a shift in its employment model would have dire consequences for its long-term profitability.
Uber spends millions of dollars every year settling expensive lawsuits with contractors and aggrieved passengers, for instance, so shifting to a different employment model could be so costly and disruptive as to upend your long-term employment prospects.
As is true in any economic sector, those who are interested in making a living in the rideshare economy should be asking themselves what the long-term future of this area is, how they intend to climb the earnings ladder, and should they get loan for taxi drivers to sustain and scale up the business.
Making a living in the ridesharing economy isn’t impossible; it demands perseverance and a firm understanding of the industry’s operation.
Uber drivers report increased stress and frequently have to pay out of their own pocket when something goes wrong, so understand that lurking costs could drain your paycheck in no time.
The rideshare economy is doubtlessly going to keep growing, but whether it’s an ideal place to make a living for young people remains to be seen.