Ridesharing is possibly one of the most popular and cost-effective ways for Americans to get where they need to go, and the pandemic got us hooked on delivery. The gig economy is booming, and rideshare and delivery drivers are providing a valuable service. Statistics show that 1 in 4 Americans calls a rideshare service like Uber at least once a month, and 60 percent of US consumers order takeout or delivery at least once a week.
However, anyone who has decided to become a rideshare and delivery driver knows that it's not as easy as simply accepting a job and making a profit. In fact, it can be difficult for drivers to earn enough cash for their time to be worthwhile.
There are a few logistical problems that make this challenging. First, some drivers operate across multiple platforms (e.g., driving for Lyft, Uber, and Doordash at the same time). Second, every minute spent going to pick up a customer is a minute with no profit. Third, not all offered jobs are viable, and drivers must spend time sorting through jobs until they find ones that will suit them.
The good news is that there are tips for gig drivers to maximize profits and minimize risks and wasted time.
First Things First: A Numbers Breakdown of the Gig Economy
Even before the pandemic, workers were moving toward a gig economy. People need freedom and flexibility, and traditional office jobs simply don't offer these things. Remote work has indeed increased the flexibility of a conventional office setting, but the fact remains that there are still plenty of limitations on earning potential and scheduling.
Currently, Gallup estimates that about 29 percent of Americans leverage gig work as their primary income. In particular, many of these workers are part of the ever-growing rideshare and delivery market.
Mordor Intelligence predicts that the global rideshare market will increase from $73 billion in 2020 to $209.6 billion by 2026. This is due to several factors, including government incentives to encourage ridesharing, increased urbanization, and more ubiquitous internet and smartphone penetration. When it comes to delivery, the fastest-growing market is food delivery. It is expected to grow by 10.5 percent between 2021 and 2026.
We're trending toward carpooling and ridesharing becoming the norm once again, which is something we haven't truly seen since the 1970s. This means that the number of drivers will continue to increase, and the available rideshare services may also expand.
Add this to a sharp uptick in the number of customers looking for a reliable ride or prompt delivery, and there is suddenly plenty of incentive for rideshare and delivery drivers to look for ways to maximize their time.
Current Challenges Faced By Drivers
Let's look at the problems that prevent drivers from reaching their full earning potential.
First, there's the problem of wasted miles. Every minute spent driving an empty car cuts into the day's profits, so top earners understand that it's essential to minimize the amount of "empty leg" driving that happens during a shift.
Second is the issue of efficiency. Whether drivers work for one service or multiple, it takes valuable time to sort through customers to find the most profitable orders. In addition, it's tedious and time-consuming to have to constantly manage your driving status and process orders.
The third and final challenge is the inability to effectively map and multitask. In an ideal world, drivers would be able to plot out the most efficient and profitable ride routes from all available rideshare and delivery apps. Doing this by hand isn't really viable because it takes too much time, and there is too much room for error.
5 Secrets For Gig Drivers to Up Their Profit Margins
In the case of every rideshare or delivery app, there are a few things drivers can do to maximize their hourly intake.
- Filter smarter
Setting up your search filters correctly can do a lot to improve your rates. By adjusting the cost per ride, and the length of ride filters properly - your cost per mile becomes optimal. These settings can be applied only when working delivery gigs with Uber Eats, Doordash, Grubhub etc.
With ridesharing, whenever possible, limit your drive time to no more than 5 minutes to pick up a passenger. Even if the fee is lower, you make up for it with less empty car time.
- Aim for high-rated clients
More experienced drivers know that it's usually best to stick with clients rated no less than 4.7 with Uber and 4.8 with Lyft. It may be difficult to find clients with high ratings in some cases, but the point is to limit your interaction with low-rated customers.
Low-ranked passengers present a higher risk of losing valuable time. Some drivers also find that lower-rated customers make trips more difficult, so, you have to prioritize higher ratings.
- Consider adding deliveries while you drive
Another secret to increased profits is playing "time Tetris," which just means scheduling your drive time as efficiently as possible. It's not always possible to perfectly fit rideshare customers into every portion of your schedule - supplement those empty times with convenient deliveries. And vice versa.
It can be helpful to take some time to plan out a route and decide which apps you'll be accepting work from before you get started. You can even make a paper or digital list. Alternatively, using an automated assistant like Muver takes away this extra planning step by handling it while you work.
- Don't forget about vehicle upkeep
One big mistake that I see many drivers make is forgetting to account for the costs of gas, cleaning, and general maintenance. These are overhead expenses that can put a big dent in your overall profits if you don't take the time to budget for them.
Plan for things like regular interior detailing, oil changes, tire rotations, and roadside assistance, and use these costs to create a budget for your business.
- Consider letting the app handle the admin work
In my experience, sorting through the available delivery and rideshare clients is the part of the job that hurts a driver's profit margins the most. Doing all of that work manually means that drivers must balance efficiency and road safety with making the most profitable use of their time.
The assistant app automates tasks like accepting, completing, and managing orders for drivers. Once the driver sets initial parameters, the app uses the device's built-in accessibility services combined with deep learning technology and screen-grabbing capabilities to automatically filter and process orders while also updating a driver's status.
All of this means a driver can essentially "set it and forget it" when managing rides and deliveries. The app handles all of the background administrative tasks so the driver can simply focus on safe driving and churning out orders as efficiently as possible.
Let's Improve the Gig Economy with Better Rideshares and Deliveries
Gig drivers deserve to have as much freedom and flexibility as possible to reach their fullest potential when making money. I believe we will see a measurable increase in the demand for ridesharing and delivery, which means that the current challenges will only be exacerbated.
This is the first time in history that we've had the technology to make ridesharing a better, faster, simpler alternative to public transit or driving a personal vehicle. Between smart technology and the development of more robust, more intuitive automatization, gig drivers can make more money than ever before.
The important thing for gig drivers to remember is that they must invest in themselves by learning how to manage their time and lower overhead costs. If they can do this with apps like Muver and intelligent planning, they will be able to pull in enough money to make deliveries and rideshares more than just a side hustle.