Math teacher Mahdi Elmi moonlights as an Uber driver, and he has run the numbers.
On a typical ride, he calculates that Uber gets a third or more of the total fare.
So he has some strong feelings about a new Minneapolis ordinance that would almost double the amount he is paid for a ride.
“They’re not taking their fair share,” Mahdi said of rideshare apps Uber and Lyft, which have threatened to leave the Minneapolis market on May 1, when the higher rates kick in.
On a recent ride with a Sahan reporter from Minneapolis’ Uptown neighborhood to the Target store on East Lake Street and Hwy. 55, Mahdi kept $8.62 of the $12.98 fare.
Under the same circumstances after May 1, he would’ve made a minimum of $16.90.
The Minneapolis ordinance sets a pay rate of $1.40 per mile and $0.51 per minute, or $5, whichever is higher, for the time transporting a rider within city limits.
Many drivers have said the apps take 30% or more of a typical fare.
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Uber spokesman Josh Gold pushed back after this story was published, sharing receipts that showed a $2.01 service fee for the ride with Mahdi, or 15% of the total cost. However the app also took out $2.35 for commercial auto insurance. The two fees together made up a third of what the passenger was charged.
Gold said in a statement that rideshare companies are required to maintain $1.5 million in liability insurance under Minnesota law.
“Minnesota has the highest insurance requirements in the country and about 10% of each ride in the 4th quarter went to cover the cost of insurance,” Gold said in the statement.
Both rideshare giants have said that an increase in fees would price many passengers out of the market.
Before riding with Mahdi, Sahan Journal also took a similar route with Andrei Tretiakov, who works full-time as a rideshare driver for both Uber and Lyft.
Tretiakov has been driving for both apps for about four months and he’s been in Minnesota for a little longer than that.
He said he started driving to improve his English, which he joked hasn’t gotten much better.
By the time Tretiakov picked up a ride around 2 p.m. at Target on Lake Street, he had driven about 160 miles during his work day that started at 5 a.m. in Minnetonka.
Tretiakov described his earnings for the day as “bad” while driving his late-model Toyota RAV4.
He’d been averaging about $22 an hour but said he’d have less after considering what he was paying for gas, vehicle maintenance, insurance, and his car loan.
“It’s OK if Uber takes 25% but not 50%,” Tretiakov said.
Tretiakov took a slightly different route for a reverse ride from the East Lake Street Target to Uptown with a Sahan reporter. For that trip he made $7.83.
Sahan Journal paid $11.98.
Under the new Minneapolis ordinance, Tretiakov would’ve made $13.15 for that ride.
Sahan Journal also calculated what both drivers would’ve made under the minimum pay rate suggested in the newest state bill supported by rideshare drivers.
State lawmakers are pushing for a rate of $1.39 per mile and $0.49 per minute.
And finally Sahan Journal calculated both drivers' pay for the rides using the $0.89 per mile and $0.49 per minute rate supported by Uber and Lyft.
All three models would see the two drivers paid more than what they made on the rides.
Threats to leave
Like other rideshare drivers across the metro, Tretiakov said he wasn’t sure what’d he do if Uber and Lyft leave but he did have an option he was considering.
Wridz is a rideshare app that has expressed interest in entering the Twin Cities market when news spread of Uber and Lyft leaving.
Tretiakov said he found the app through an internet search and so far has liked what he’s seen, although the app is not yet licensed to operate in Minneapolis.
Since he only drives about 30 hours a week, Mahdi said he could afford to let Uber go on May 1, but he also said he believes an alternative service could take its place.
”We can get a company to replace them, because the system that they use is available everywhere,” Mahdi said.
But he said a solution to all these problems could be reached another way: Having apps take less of a cut from passenger fares and letting drivers keep more.
“I don’t believe that they need to add [charge] more money to the riders,” Mahdi said.
”They have only the app and they took 40 to 50% of what I did,” he said. “It’s an unfair system, they’re doing nothing but providing an app.”
Clarification: This story has been updated to reflect Uber’s analysis of the breakdown of rideshare fees and insurance costs in driver trips.
