#591: Harry Campbell on How Much Money Uber and Lyft Drivers Make

Harry Campbell is the Founder & CEO of The Rideshare Guy, a blog, Youtube channel, podcast, course and book for Uber and Lyft drivers and others in the gig economy. In this conversation, we discuss drivers as small businesses, driver incentives, financial empowerment, driver supply shortage, prices going up, and driving packages vs passengers. ======================= Revolut is a finance app in the US and UK, that say they're the simplest way to access crypto. Sign up today at Revolut.com/pomp and make 3 card transactions to get $15, which you can exchange for any tokens Revolut supports. As usual, when you move your money from fiat to crypto your capital is at risk. See T&C's for details. Revolut is a financial technology company. Banking services provided by Metropolitan Commercial Bank, Member FDIC. Cryptocurrency services provided directly by Paxos Trust Company, LLC. ======================= Cosmos is building the Internet of Blockchains, marking a new era of interoperability, scalability, and usability. The free flow of assets and data between blockchains with bridges to Ethereum and Bitcoin will unleash the potential of DeFi, NFTs, and much more. Dive into Cosmos at cosmos.network/pomp ======================= OKEx is a world-leading cryptocurrency spot and derivatives exchange that offers some of the most diverse and sophisticated trading products and crypto finance tools on the market. Trusted by millions of users globally, we believe that cryptocurrency will reshape our money and society, enabling more financial inclusion with alternative tools and methods for wealth creation.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Harry Campbell is the founder and CEO of The Rideshare Guide, a blog, YouTube channel, podcast, course, and book for Uber and Lyft drivers and others in the gig economy. In this conversation, we discuss drivers of small businesses, driver incentives, financial empowerment, driver supply shortage, prices going up, and driving packages versus passengers. I really enjoyed this conversation with Harry, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is Revolut.

• 0:42Anthony Pompliano?

  Let's go back to the basics for a second. I've partnered with Revolut, a finance app in the US and the UK that say they're the simplest way to access crypto. They're putting their money where their mouth is. You can sign up today and make three car transactions and get $15. Yep, that's right, $15. What can you do with $15? You can exchange for Bitcoin or any of the other tokens Revolut supports. Yep, they are crypto-enabled. These guys have made it easier to get more skin in the game. As usual, when you move your money from fiat to crypto, your capital's at risk. Sign up now through revolut.com/pomp to get a $15 reward and put them to the test. Again, revolut.com/pomp to get a $15 reward and you can put them to the test.

• 1:26Anthony Pompliano?

  Next up is Cosmos. Cosmos is building the internet of blockchains, making a new era of interoperability, scalability, and usability. The free flow of assets and data between blockchains and bridges to Ethereum and Bitcoin will unleash the potential of DeFi, NFTs, and much more. Dive into Cosmos at cosmos.network/pomp. Again, cosmos.network/pomp. Go check them out. Cosmos, the internet of blockchains, marking a new era of interoperability, scalability, and usability.

• 1:57Anthony Pompliano?

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• 2:38Anthony Pompliano?

  can earn up to 15% APY on your crypto. Check out the latest high-yield crypto-earning options on OKX Earn. Open an account today at OKEX.com/pomp. Again, OKEX.com/pomp. All right, let's get into this episode with Harry. I hope you guys enjoy this one.

• 2:57Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 3:26Anthony Pompliano?

  All right, guys. Bang, bang. I've got Harry here. Thanks so much for doing this, man.

• 3:29Speaker 02

  I'm excited to be here. My first time in Miami, too, so I'm glad we could do it in person.

• 3:33Anthony Pompliano?

  Yeah, absolutely. Let's talk about ride-sharing, and specifically from the driver's side. I don't think I understood until a couple of years ago that drivers are basically just small business owners. Walk me through kind of your journey from you were working at a tech company, I think, right? And then you became a Uber driver, and then eventually kind of went and built this whole digital media business focused on educating and empowering people who are driving in this gig economy. Like, how do you see the driver as like a small business?

• 4:03Speaker 02

  Yeah, I mean, that's actually really a good starting point, because a lot of people get into The gig economy, they get into driving for Uber and Lyft or delivering DoorDash or groceries for Instacart to make a couple hundred bucks a week, you know, side income, flexible, you know, there are a lot of positive attributes. And what they don't end up realizing is they are running their own business. They get paid via 1099. And I mean, as you know, and many of your folks in your audience know, running a business is tough, tough job, right? It's a tough gig. It's not for everyone. Most businesses fail for a reason because you not only have to think about your income, you have to think about your expenses. You have to think about your liabilities, like insurance. You have to think about taxes, estimated taxes as a 1099 worker, right? You don't get taxes taken out of your paycheck, so it could come hit you, especially if you don't do a good job tracking all of your mileage.

• 4:48Speaker 02

  And so I actually started my, my former career. I was an aerospace engineer for Boeing, so kind of doing the exact opposite of what I do now. But that was sort of my, my formal training. So I worked as an engineer for seven years. And in those last few years of my engineering career, I started dabbling in online businesses, doing, I had a few personal finance blogs that I started just for fun. Started doing some freelance travel writing, just kind of, you know, scoping out the opportunities and the options, working online and in digital media and what I enjoyed. And one day, you know, kind of like a lot of people back in 2014, heard about this service called Uber, heard about this service called Lyft. And it just seemed like an interesting gig to try driving for.

• 5:31Speaker 02

  And especially in those early days, I mean, I was an engineer, so I was tracking all of my income and I was making a lot of money. And the pay has definitely come down since those early days. I mean, I remember, you know, doing a podcast back in 2014, my first weekend driving, July 4th weekend in Newport Beach, California, which is like a big party area. And I was also making over $50 an hour, you know, and this is here, I'm working as an engineer, making a decent salary, but I was making more driving for Uber and Lyft, you know, just on the weekends and nights than I was at my day job.

• 5:59Anthony Pompliano?

  Yeah. And so when you think about kind of today, it seems like there's what I'll call the unsophisticated driver who, hey, I just get in my car. That's pretty much all I need to get started. I turn on the app, I get signed up and I'm off to the races. It tells me to go pick up a person, you know, in spot A, I take them to where it tells me, drop them off and just move on with my day. Then there's some people, I've talked to some of these drivers,

• 6:19Speaker 02

  Yeah.

• 6:19Anthony Pompliano?

  who are super sophisticated. They know exactly where surge is. They know exactly kind of how to be efficient. They know how to get the highest rates. They sort of figure out all kinds of things of how to get this ride shorter. Do they want long rides and fewer in kind of a shift? Do they want tons of short rides? Right? Like,

• 6:36Speaker 02

  Yeah.

• 6:36Anthony Pompliano?

  How do you think through that? And is there kind of like one strategy that works across the country?

• 6:41Speaker 02

  For sure.

• 6:42Anthony Pompliano?

  Or is it different in kind of each geography?

• 6:44Speaker 02

  Well, the crazy thing about working in the gig economy is that there's so much variability, right? You've probably talked to other drivers who absolutely hate the job, you know, they can't figure it out. They're not making more than minimum wage. You've probably seen stories about that and those are actually true. You know, on average, drivers report, you know, in the annual surveys we've done, like over a thousand drivers, they report earning about fifteen to twenty dollars an hour before expenses. Right now, in the, you know, coming out of this pandemic, there's a bit of a driver supply issue, which we, I'm sure we'll talk about. So earnings are up. But, you know, just to kind of give you an average and then from there, you know, the worst drivers are making five to 10, but the best are 20 to 30. If you're in a bigger city where there's more demand, Los Angeles, Chicago, Miami, you can make more money just kind of at a baseline average level.

• 7:27Speaker 02

  But definitely there are drivers who are, you know, what we've seen actually in Uber's own data that they've released, the more experience you have as a driver, actually it has a positive impact on your earnings. You might earn maybe five to $10 an hour more after 1,000, 5,000 trips. And so what my, really my whole business has been trying to do is accelerate that learning curve. Now, obviously we've got courses and things like that for drivers, but also just content and really understanding. I mean, number one is that, you know, the company's incentives and your own incentives are not always aligned, right? And so I think that that actually applies in every job, you know? I mean, people think that, you know, I worked at this company for 30 years. I mean, if things go south, you're, you know, there's no reason that they wouldn't lay you off. So I think it's just a good principle to understand. And in the gig economy,

• 8:12Speaker 02

  there's really not a lot of loyalty or love lost on either side. Drivers, you know, obviously many of them do Uber and Lyft or switch over to food delivery and the same thing on the company side. So there definitely are strategies that you can employ. And I would say that it kind of, you know, the Main principle that applies across every city and state is really just understanding that nobody cares more about your income than you do. Not every trip that the company send you is going to be one that you want. I mean, you talked about short trips, for example, like I learned very quickly driving in Newport Beach seven years ago, that the worst trips are the short trips. Those are the ones, so on a short trip, anything two to three miles or less, Uber typically charges, you know, the rates vary by city, but it's let's say seven to $10. Let's say $10 for even around numbers.

• 8:55Speaker 02

  From there, they take a $3 service fee, you know, round numbers, right, that goes straight to the company. So that leaves $7. And then from that $7, Uber takes 25%. So the driver is only getting 75% of $7, right? So let's, and you know, let's say it's like $4 to $5. In other cities, that minimum fare is actually a lot lower. Like in LA, that end payout on a minimum trip was $2.80 for a long time. And so you could imagine all the work that goes into even a short trip, right?

• 9:21Anthony Pompliano?

  So you're getting 28% basically of a $10 trip when it's all said and done?

• 9:26Speaker 02

  You're on minimum fares, you're usually getting like 40 to 50%, right? Even though their take rate, right, they'll say that their take rate is 25%. So, you know, it's like we would employ strategies to avoid those minimum fares, you know, like at nights from like 10:00 PM to 12:00 AM, when people are kind of bar hopping, you want to stay away from those areas, right? You kind of actually want to drop people off and then drive away a few miles so you don't get pulled in, you know, for like a one mile, someone really hammered, you know, they're waiting, they're making you wait five, 10 minutes, you know, when you're outside type of trip.

• 9:57Anthony Pompliano?

  And is there things that drivers do in terms of understanding like geography? So like airport is a pretty obvious one. There should be always, you know, persistent demand in a big city at the airport for somebody who needs an Uber. And so you could basically go there, take them, go back, you know, and that's a kind of one strategy. Obviously nightlife, right? Hey, if there's a downtown area, you're, you kind of go out where people live and then you take them in and then reverse at the end of the night, right? Is at 2:00 AM, go downtown and take them wherever they go. But are there other types of geographic based strategies that you see drivers really kind of optimize their income?

• 10:27Speaker 02

  I mean, the dummy proof strategy is sort of just to drive the times when it's high demand. So that would be Monday through Friday rush hour, you know, especially now that things are opening up and coming back. So more. And then late afternoons and then also Friday, Saturday night, drivers call those the party hours. And you know, really the later you stay, the less drivers are out. So the more you can make via surge pricing. So those would be sort of, that's kind of like the dummy proof strategy. And then as far as geographically, you know, I will say that, um, you know, just at a high level, right? Like the cities that are the biggest cities in the U S typically like that's where earnings are the highest because demand is the strongest. I mean, cost of living is sometimes higher there, but um, you know, we do see drivers, you know, even who live,

• 11:07Speaker 02

  you know, near the San Francisco Bay area, like go to San Francisco and drive for a weekend, you know, get an Airbnb, share with a few people. Yeah, because I mean, San Francisco is probably, you know, a very unique market because I, you know, high demand, but also like, I would say like insane demand. Just because, you know, so many of these apps started there. So many people are, you know, using these, you know, uh, options and you know, there's.

• 11:29Anthony Pompliano?

  So literally people will leave where they live. They'll go to, let's say, San Francisco and a bunch of other drivers may get an Airbnb together. And then literally they'll like work the weekend and then they go back to wherever they, uh, live.

• 11:40Speaker 02

  Yep.

• 11:40Anthony Pompliano?

  Crazy. What's the difference between driving for an Uber and Lyft, which I think when people think of gig economy drivers, that's what they think of with maybe food delivery or some of the other types of driving in the gig economy.

• 11:50Speaker 02

  So I would say pre pandemic, you know, it really was Uber and Lyft were sort of like the top dogs. But I mean, now you look at, you know, coming out of the pandemic, I mean, DoorDash is a $50 billion market cap company, right? Like they're a real competitor, you know, they may even be surpassing Uber sometime soon. I just had DoorDash's president on my podcast and he was dropping stats left and right. And they've got 2 million dashers right now on the platform, right? So, you know, in the same ballpark as Uber, who said they've got 2 to 3 million drivers. And you know, the main difference I would actually say happens on the kind of vehicle side. So it's really sort of, you know, for the company's acquisition funnel, they have a much bigger pool of workers to choose from. Cause you can really drive with any old piece of shit on food delivery. I mean, you can have your own car, obviously, but you can also do a scooter.

• 12:33Speaker 02

  You can do a bike, you can do an e-bike, you can deliver with a friend or family member, which some people definitely do. Salvage vehicle, really two door, anything, you know, I actually had someone drop off a DoorDash order the other day and he pulled up in a Range Rover.

• 12:48Anthony Pompliano?

  Really?

• 12:49Speaker 02

  Few years old, but it was a Range Rover. That was one of the nicest cars I've ever seen.

• 12:53Anthony Pompliano?

  Yeah. And so basically Uber and Lyft have a higher standard because there's actual customers of theirs.

• 12:58Speaker 02

  Exactly.

• 12:59Anthony Pompliano?

  Versus food delivery.

• 13:00Speaker 02

  Basically, the gist is you sort of need a newer four-door vehicle, no damage, no salvage title, no funky colors, stuff like that. So that's sort of, you know, one big difference. And then on the supply side, you know, it's made a big difference. If you've noticed, you know, for those who are kind of power users of these food delivery services, there was a bit of issues on DoorDash and Instacart at the start of the pandemic when they had a big spike in demand. But since then, they've been very reliable, you know, when placing orders, especially relative to their counterparts, Uber and Lyft. So the vehicles is one. And then there are some differences on the driver's side, just, you know, sort of the obvious that, you know, you're obviously interacting less to none with passengers. So if you're more of an introvert, that might be a better option.

• 13:38Anthony Pompliano?

  Yeah. What's so fascinating was in New York and then here in Miami, when I came down here, all of these apartment buildings, they wouldn't let the food delivery go up to the actual doors. And I remember saying to myself, like, they must save so much time, right? Not having to get in the elevator, go up, find the door, knock, wait for the person to answer the door, go back, all this stuff. And you just walk in, put it right at the front desk and leave. And it just reminds you that like, literally five minutes, 10 minutes, could be two or three extra trips, which could be more revenue. And you kind of understand the economics of the business.

• 14:10Speaker 02

  Well, and that's a perfect example of actually, you know, how geographies do matter. Because, you know, where I'm from in Los Angeles, we don't have as many of the big towers. But we do have these mega apartment complexes where drivers kind of have to navigate it on their own. And they do have to take it to people's doorsteps. I saw an integration that Uber Eats has in the works. And it's actually with a company, though it actually like gives more detail in these mega apartment complexes to solve this exact situation. And so as a driver, especially in the delivery services, you get a lot more information about each trip. And so you might want to make those types of decisions and understand, hey, there's certain buildings, you know, this building in Midtown Miami, like they make you take it up to the customer. These other ones don't, right? And that extra five to 10 minutes, like honestly, frankly, like usually the customer doesn't know,

• 14:54Speaker 02

  they don't care, they don't think about it. And if it costs you 10 minutes to make that extra Delivery, it's literally cutting into your utilization, basically, right? And that's kind of what I mean in that, you know, the people that have the best success in the gig economy are thinking about it like a business, right? This is only one trip and it's only five, 10 bucks. But I mean, that principle adds up over time. If you get 10 of those a week, right? And you can save an extra, you know, 60 to 100 minutes every single week and do more deliveries. You're making more.

• 15:21Anthony Pompliano?

  Have people made like automated systems where it basically can read when the, you know, when the order comes in? Or when the ride request comes in, it basically gives you, you know, A plus type ride, you know, it's F minus type ride or delivery. Like, are there ways for them to almost automate that decision making? Or is it really just based on best guess and maybe have some information to help me?

• 15:40Speaker 02

  There have been a couple of cool startups that have tried to do things like that. One that I worked with called Maestro, basically kind of automated your Uber and Lyft driving. So a lot of drivers do both services. And this was kind of a hack that worked through the Android. So it was Android only and it worked through the accessibility's option. And basically what it did, it would put you, you would hit one button. It would put you online in both Uber and Lyft. When you got a trip request, it would accept it based on whatever parameters you had set. You know, it's like, oh, Anthony Pompliano, he's a 4.7 Uber. I only want 4.8 or above, right? You know, surge rating, things like that. And they actually ended up running into a lot of issues with Lyft. Lyft started like kind of actively blocking the company and releasing software updates.

• 16:18Speaker 02

  There's another interesting app right now in the Dasher community called Para that is actually giving Dasher's more information about each trip. So with DoorDash right now, you see the total amount, including tips. But sometimes if it's a really big tip, DoorDash doesn't provide that information to drivers because they sort of don't want people just cherry picking the best trips, you know, the best orders. And this app is actually telling Dasher's, you know, they sort of have found this loophole, this workaround where they tell you, okay, no, this one has an extra $15 tip. And so it's a bit controversial right now and some people are sort of for using it and others aren't. But, uh, you know, that's what's going down on the ground level.

• 16:55Anthony Pompliano?

  Yeah, it's fascinating to me. And then I guess in terms of like actual investing and kind of the financial empowerment, right? So you talked earlier about somebody with a car on the weekend or at night, even if they've got another job. Or if they do this full time, is a great way for them to make some extra money.

• 17:11Speaker 02

  Yeah.

• 17:11Anthony Pompliano?

  How sophisticated are most of the drivers in terms of investing?

• 17:16Speaker 02

  Yeah.

• 17:16Anthony Pompliano?

  Or, you know, one of the jokes always in finance has been like, be scared when your barber asks you about stocks.

• 17:22Speaker 02

  Yeah.

• 17:23Anthony Pompliano?

  I'll tell you this story and this was absolutely crazy. I went to dinner in New York City, maybe a month ago. I got in the car. It was, you know, 11:30 at night or something after dinner and all of a sudden my wife slapped my leg and, you know, I look up and the Uber driver had stopped at a red light. And he had the phone kind of on like the, the device holding it up. And all of a sudden he clicked out of the Uber app and he clicked into Robinhood.

• 17:50Speaker 02

  Nice.

• 17:50Anthony Pompliano?

  And literally was looking at Dogecoin.

• 17:52Speaker 02

  Making some trades.

• 17:53Anthony Pompliano?

  Not trading like to, you know, to, nothing like that, but just like, that was the app that he chose to click into. And so I couldn't help, you know, I say, hey, what are you doing or whatever? Like just trying to understand the psyche, basically. And he was like, look, like I'm bored in the car a lot. I'm waiting for rides, whatever. He's like, it's just fascinating. I don't know that much. Right? I'm trying to learn like all this stuff. And so maybe Dogecoin isn't the place to go learn, right? But it just, it got me thinking like, how sophisticated are, you know, many of these drivers? Are there programs in place for them to learn? They are making money, right? Is there ways for them to invest? Like, what do you see on that front?

• 18:27Speaker 02

  Well, I mean, I will say, you know, just to be frank, like unfortunately, I think a lot of drivers are, you know, more paycheck to paycheck. And even though this income is nice, it's extra, it's side, like usually the money is going to important causes. I guess I would say, you know, to make up for their other job and, you know, to pay the rent or to pay food or to pay the bills or to pay off things. And so, you know, to the company's credit, they have launched some pretty cool stuff, you know, partnerships with like Betterment in the past. Uber has a pretty cool partnership right now. I want to say it's like with the University of Tempe or something like that. Where if you drive a certain number of hours, you can work on your degree online on the side. So they do have a lot of cool stuff like that at your disposal. But frankly, I think more drivers are, I wouldn't say they're not sophisticated, but I just would say that they have kind of other priorities.

• 19:10Speaker 02

  You know, more like immediate needs and priorities. And so, you know, we definitely try to do some work on the investment and you know, like we've. We did a whole series recently called like kind of developing your plan B because we sort of noticed like last month I had more unsubscribers and I had subscribers on my, you know, 80,000 person email list and we started surveying a bunch of them and they're like, oh no, we love your content. We're just moving on to other stuff, right? Because the nature of the gig economy is very transient. Um, you know, a lot of people get into it for certain reasons, but it isn't the thing they want to do forever. I mean, I always, uh, I'm, I'm a big fan of just leveraging it for a lot of the reasons you talked about, but also I think it's just amazing practice at running an actual business, right?

• 19:49Speaker 02

  Because you're doing all the things of, um, someone who operates a multimillion dollar business, you literally have all of the same kind of requirements, things to think about, goals, objectives, and it might be on a smaller scale, obviously, but it is a great practice. So I would love to see more people kind of get into the gig economy, kind of like how I did, like I was working at Boeing and frankly, like a lot of people kind of made fun of me. When I, I started driving for Uber and Lyft seven years ago and I'm like telling them, no, I'm literally on a dollar per hour amount, making more. And then when I deduct all of my mileage, right now, the mileage deduction is 57.5 cents per mile. I'm making, you know, this is like tax free.

• 20:25Anthony Pompliano?

  How does that work?

• 20:26Speaker 02

  So as a driver, you know, a full-time driver, believe it or not, puts a lot of miles on their car. So they'll do a thousand miles a week. And you get a 57.5 cent mile deduction. So that's $575. So let's say you make a thousand dollars on that 1,000 miles driven. Right off the bat, you're 1,000 minus $575. So that's only 425 then.

• 20:45Anthony Pompliano?

  That's taxable income.

• 20:46Speaker 02

  It's taxed. So you're only paying taxes on 425, right? And then you have your cell phone, right? You might be, you know, when you're Uber driving, it's online all the time. And if you look at your, you know, you maybe use your phone 10 hours a week and use it 40 hours a week for Uber. So now it's 40 divided by 50, 80% of your cell phone bill is now deductible. Now, you know, you're driving, you know, you're driving all over the place, right? You can really start to add up a lot of those miles. I did this cool experiment in Los Angeles. Uber has a feature called destination filter where you can only get rides headed in the direction you want to go. You can even set a time that you need to be, an arrival time, basically, right? And so anytime for a whole month, I had a meeting, I had somewhere to go, just like on personal side, right? Friends, I wasn't like working, driving for Uber. It was just whenever I had to leave the house, I set that destination filter.

• 21:31Speaker 02

  And I was actually very surprised at, you know, I would go out of the way, I would make eight bucks, 10 bucks, 15 bucks. When you looked at the time spent, you know, basically your marginal time, like it would have taken me 15 minutes to get there. Now it only took me 20 minutes. It was only five minutes, but I made an extra eight bucks, right? Eight times 12 is now $96 an hour. I didn't actually make 96 an hour, but you know, $8 in five minutes, right? It's not bad. So there are some pretty cool ways that you can leverage it. And I mean, even, you know, I just think if more people knew about how powerful it was, I mean, they've got an instant pay option too. So you can literally go out, work one trip, you know, let's say you get a big trip, 50 bucks, you can cash it out and it's like a fast cash. So it gets to your, you know, it's like a reverse ATM transaction. It gets to your bank account

• 22:14Speaker 02

  in like five to 15 minutes. So there's some pretty cool stuff happening.

• 22:18Anthony Pompliano?

  You're much more sophisticated than most Uber drivers, I think, right? You literally were an aerospace engineer. You've obviously done all the math, et cetera. How do people get from, hey, I'm just starting. I don't even understand how to run a business to like your level of sophistication? I'm assuming that's a lot of what the digital business that you have.

• 22:32Speaker 02

  Yeah, I mean, so the, the way that I think most people do it is just through experience, right? They just do thousands of trips. I mean, my, my driver here, I think it said on the app, you know, that he had 15,000 trips. And so I think if, you know, if you're making it 15,000 trips, you're figuring things out on your own. What I try to do and help people with is accelerate that learning curve, right? I mean, once you get five, 10,000 trips, you kind of know all the tricks.

• 22:53Anthony Pompliano?

  How long does that take? 5,000 trips?

• 22:56Speaker 02

  Um, I mean, if you're driving full time, you could probably knock out 100 trips a week. So one year you could do 5,000. I mean, that's full time, full time, you know, 40 to 50 hours. So it's serious stuff. You know, if you do 5,000 trips a year, you're pretty serious about it. And frankly, you know, a lot of people don't make it that long in the gig economy. Uber released a stat saying that two thirds of all drivers quit after just six months. So you sort of had a, have a lot of newbies and you have a lot of veterans, like people who have figured out the system. And there aren't that many people in between who are kind of just, you know, dangling.

• 23:26Anthony Pompliano?

  What's going on with the driver shortage? I think that's one of the, the most fascinating things. So most people, uh, they realize, hey, the prices seem to be a little bit higher. Uh, you see all types of weird stuff over the last few months, like. I can get the Uber XL cheaper than I can for like a normal ride.

• 23:43Speaker 02

  Yeah.

• 23:43Anthony Pompliano?

  It all, I think revolves on this driver shortage.

• 23:46Speaker 02

  Definitely.

• 23:46Anthony Pompliano?

  So like, how do you view that given that you're kind of an insider to this industry? And then what are the pros and cons when there's a driver shortage?

• 23:53Speaker 02

  Sure. Yeah. And I mean, I think that a lot of people, I'm still talking to people every day, especially on the West Coast. They're taking their first Uber trip in, you know, a year, a year and a half. And they're like, what the hell is going on? I can't get a ride. Prices are at an all time high. And, you know, frankly, I think reliability is at an all time low for these services. And what's really happening, I guess, the root cause of the driver shortage. I mean, there are a few reasons, but I think the main thing is that a lot of these drivers are still getting unemployment. They're still getting PPP. There was a big change to the PPP program from gross income or from net income to gross income. And because of all those tax deductions we talked about, like the net income of a full time driver is really low, which means it's great because you pay no taxes and, you know, it doesn't actually cost 57.5 cents per mile to operate your vehicle.

• 24:37Speaker 02

  It's more like 20 to 30, 20 to 30 cents. If you've got a good car, a good Prius and got a good deal. And so a lot of drivers are still on that unemployment. They still got PPP loans. There's other programs like employee retention credit with drivers. If they convert to an LLC as S corp are eligible for. And we worked with a partner who basically did that and signed up hundreds of drivers for that. So, you know, I think that's really the main cause for a lot of this. And then the second thing, like I talked about earlier, I mean, delivery is here to stay, right? Food delivery, there's still a lot of questions about the unit economics of the business. But DoorDash, 50 billion market cap, right? Over the pandemic, their demand exploded on all of the last mile delivery services. And so they hired hundreds of thousands of drivers. They also brought a lot of people over from Uber and Lyft.

• 25:21Speaker 02

  And so I think what's happening now is, you know, there's this sort of, you know, unemployment stimulus is a big cause, but then also, you know, a lot of people are now doing delivery or have switched over to delivery and, you know, they're real competitors. So I think that, you know, that's kind of what's driving that shortage.

• 25:37Anthony Pompliano?

  So Dara from Uber had this kind of tweet storm where he basically said, hey, prices are higher, right? And, and okay, that, that was a pretty big step of just acknowledging, yes, prices are higher. But then he tried to walk through kind of the economics of why this actually may be better for drivers and like drivers are making more. So I know it might get a little granular, but walk us through kind of the math.

• 25:58Speaker 02

  If you want to get granular, we can. You've got a smart audience.

• 26:01Anthony Pompliano?

  How people understand when the prices go up. Can you give us an example of how the drivers are actually making more money versus the company itself making more money?

• 26:09Speaker 02

  So Uber has basically switched to a really interesting system where they've decoupled what the passenger pays with what the driver gets. So in that example, I talked to you before with a $10 fare, you could always back calculate exactly what you got as a driver and it was based off the actual mileage and time and you could see the service fee, subtract that out, and then you would get your 75% of the remaining fare. And what a lot of these companies are frankly trying to do is that they see there's a lot of earnings volatility, right? Sometimes drivers are making way more, sometimes they're making way less and it can, you know, cause a lot of retention issues over time. So what they're trying to do, or at least this is what they say, is they're basically just trying to remove some of that volatility and pay the same, right? Which in financial terms, obviously, if you had two different opportunities, one is

• 26:53Speaker 02

  more volatile, you would pick the one that's less volatile if the expected return was the same, right? And so what that's what a lot of these programs are trying to do. And so now, when what Dara's tweet storm was basically saying was that, you know, there was an article in the Washington Post that said, hey, you know, when you pay more, when you pay that $100 for that surge ride right now that normally costs you $25, drivers aren't actually getting more of that fare. And that is true. So on 100, so let's say you have a $25 base fare, you know, from your house to the airport, for example, a little bit of a longer trip. If there's a 4X surge on that and it now costs you $100, kind of an extreme situation, the driver is getting what's called a flat rate surge. So there's a big map on the driver's

• 27:36Speaker 02

  side and it's actually kind of cool. If you, if you're a customer, you can actually sign up as a driver and then you can pull up the surge map and see what prices look like, just as a little hack, if you want to avoid surge pricing. And you can move your pin around and you know, get cheaper areas, but. Basically, they get paid a flat rate. So they get 25 plus anywhere from a few dollars, five, 10, 15. It might be more like $15 in this case. So they're only getting paid, let's say, $40 on this individual trip, where you, the customer, are paying $100. So Uber's take, and I'm simplifying the math a bit, but Uber's take is 60% on that trip. And drivers actually see that on their receipt. And so they go to Reddit, they go to forums, they go to sites like mine, and they're like, Harry, what the hell is going on?

• 28:16Speaker 02

  Uber is taking 60%. Now, they're usually ignoring the trips where Uber is taking a lot less. Or there are even trips where Uber is losing money. Uberpool used to actually, some trips, if it didn't match, the company would actually lose money, right? And so what Dara was basically trying to explain was that their take rate has actually gone down. So on average, what they're taking from drivers, you know, has gone down across the board. So that means there are a bunch of short trips, right, where they're sort of paying a higher bonus than what drivers would have got on the old system. And I think why it's so interesting is that I, you know, I totally believed Dara. I don't think he's making these numbers up, right? But there's a big disconnect between what the drivers see and what they're experiencing,

• 28:59Speaker 02

  you know, on an individual trip level. And I think that psychology is really interesting for companies to understand, because I don't think Uber and Lyft are doing a good job of showing, like, they should be getting credit, like, hey, we're paying drivers more. We should get credit for this. And if you go and talk to drivers, how much Uber takes from each fare, I guarantee they would say crazy numbers, 30, 40, 50, 60%, but the average take rate is usually more in that 30 to 40% range. And we've kind of analyzed this a bunch of times over the years. I have drivers sending me all their trips right now, and we're doing some cool analyses. But, you know, there's sort of like this disconnect between what the companies are seeing at an aggregate level and how they communicate that to drivers on an individual level.

• 29:37Anthony Pompliano?

  It's fascinating to me that the math and the psychology is separated.

• 29:42Speaker 02

  Yeah.

• 29:42Anthony Pompliano?

  It shouldn't be surprising, right? I mean, it's all the finance, but it just feels like Uber and Lyft are never going to get credit.

• 29:49Speaker 02

  I mean, I think that a little bit of this is self inflicted, though. Like, I think that, you know, they definitely, you know, they've got their detractors, people who sort of, you know, have a negative view of them. And, you know, and obviously, I run a whole business on helping drivers and gig workers. So my view of the gig economy is optimistic. I'm more, you know, we cover the positives and negatives for sure, you know, but I'm more positive than negative. And I think that it's just important because the perception of earnings is often more important than your actual earnings, right? And so that's like, I feel like what the companies don't quite get. They're looking at their data and they've got these spreadsheets. And this is one thing I've criticized the companies. I think they do look at drivers. Actually, I know they do. I've been in their office with them and they're literally talking about drivers like numbers on a spreadsheet like, hey, you know, we know that we lose this many drivers and we can

• 30:34Speaker 02

  replace them for this cost, you know, times new drivers and that's cheaper than, you know, retaining good drivers, right? And so, but I think it kind of like hurts them when it comes to these situations where like shit has sort of hit the fan and now they need drivers and they can't convince people to come back. They're like, I got an in-app notification the other day, drivers are earning median $31 per hour and that's across all engaged time, you know, even when you're sitting there waiting for a trip, which they usually don't account for in their calculations. And, you know, drivers are kind of like, eh, I'm gonna stick with delivery for now. You know, maybe I'll come back to Uber in the future or like, oh, I don't really trust them or oh, it'll probably only last for a little bit.

• 31:11Anthony Pompliano?

  It feels like if they could just say, hey, our average take rate from you, right, is X percent and they just told you that number and it was a attractive number, drivers would be like, thank you, right? Like, I don't know.

• 31:23Speaker 02

  And I mean, I think that they've tested some things in the past, you know, like on rides where they take a 60, 70% commission. They give an extra little bonus, like kind of like a catch up. But I think that they need to do a much better job of, you know, sort of, I mean, you really kind of have to balance being super transparent because if you're like too transparent and you show drivers exactly what's happening and how much they're taking, you know, like, I just worked my ass off to pick up this guy, you know, I had to wait for him for five minutes and then there was all this traffic and then I only got 40% of the fare. Like, that's sort of like a slap in the face. And of course, as a driver, I'm going to remember that trip and forget the one where Uber lost a couple bucks, right? And so you sort of have to think about the best ways to be transparent. Also like get credit when you do do something well. And I think that's what the companies, you know, I mean, it's not an impossible challenge to solve. So I'm confident that they will eventually

• 32:08Speaker 02

  solve it. But probably, you know, I think right now it's hurting them a lot more. And you know, one of the reasons why they're experiencing, you know, I mentioned Uber and Lyft are at a reliability as an all time low. I mean, they use surge pricing in the past. I mean, their number one KPI has always been when you open the app, they want you to see a driver available and then they want you to see it three to five minutes away. And that's really not happening right now. So I think it's like five alarm fire at the company right now.

• 32:33Anthony Pompliano?

  Last thing I want to talk about is Bitcoin, a trend that we've seen across industries from professional athletes all the way down to getting paid in Bitcoin.

• 32:41Speaker 02

  Yeah.

• 32:41Anthony Pompliano?

  Is that a thing in Uber, Lyft and kind of delivery and type drivers? Do they want to get paid in Bitcoin or have access to other types of financial assets? Or are they just living paycheck to paycheck? Like, give me the dollars and move on?

• 32:53Speaker 02

  I mean, I think that for now, they're kind of like paycheck to paycheck, want the dollars. But I do think that, you know, we've seen, you know, kind of like with the rise of, you know, Bitcoin on its own. And then, you know, especially like the beginning of the pandemic, when people did have those stimulus checks and maybe we're investing more and, you know, like public markets, gambling, whatever you want to call it, or, you know,

• 33:10Anthony Pompliano?

  Stock market is a casino for sure. Go ahead.

• 33:13Speaker 02

  Right. And so we definitely have seen that kind of like ebb and flow with more like based on the macro trends. I haven't seen a ton of demand, you know, I guess you would say, but I do think that that would be pretty cool. Like, I think that there is a lot more opportunity to sort of get like some of these drivers involved in some of the crypto assets. And then also like even, you know, some of these like local merchants, especially on the food delivery side, you know, like sort of getting, you know, accepting payment in Bitcoin or, you know, whatever it might be. And then how the driver fits into that equation, you know, getting bonuses or cash back. And all these companies have driver rewards programs. So I could easily see, you know, hey, instead of getting like this certain bonus, it's like you get, you know, whatever percentage of Bitcoin, of Bitcoin coin, right back. So definitely some cool stuff.

• 33:56Anthony Pompliano?

  Yeah, there's, there's a lot of studies that show people don't care so much about the dollar amount of like a gift or of some sort of reward, etc.

• 34:06Speaker 02

  Exactly.

• 34:06Anthony Pompliano?

  It's the actual thought. So like, for example, You could give somebody a $5 trinket or you could say, I'll give you a hundred dollars. And although it is a non-economic decision, there are studies that show people will choose the $5 trinket because it has sentimental meaning or whatever. Now, I'm not saying that Uber, Lyft should go give $5 trinkets, right?

• 34:26Speaker 02

  No, I mean, that's a, that's a really good idea. Lyft used to give out this jacket at a thousand trips. And it was a pretty nice, I mean, you know, not like Patagonia or anything, but you know, like a solid windbreaker. Man, every driver, it was like a badge of honor. They wanted it. They wore it. You know, I would go to these driver events, these meetups, and you could sort of tell like all the OGs had their jackets on. And so I do think that there's something there, right? Like, that's why I think it is cool. You know, and of course, like digital goods and services are a lot more scalable, right? Versus like mailing out jackets and things like that. But basically swag, you know, like I, when I came here, I gave you a little swag. You know, even when I'm opting people into my email list, you know, I give them a PDF guide to driving, right? Because it's sort of like that psychological, hey, if you're going to give me your email, I want to give you something in return.

• 35:11Speaker 02

  Like, how valuable is this PDF that I'm sending? I mean, there's some good info in there, but it's not like, you know, the most valuable thing in the world. So I do think that kind of rewards, like it doesn't, and again, like, I think that's where, you know, these companies still have a lot of, I would look at it as like opportunity to improve things, to improve their relationships with like small stuff like that, that, you know, isn't, you know, because all these companies want to kind of avoid just giving cash to their drivers, right? They really want to actually take more cash, right? On a kind of unit economic basis. So I do think, you know, thinking about like, you know, going off of like what the current trends are. Like, I actually bet you, you know, like, if you could find a way to like hook up some drivers with some Dogecoin right now, like, I bet you a lot of them would be kind of like psyched about it. Or like, you know, now bonuses, they say like, hey, come out,

• 35:53Speaker 02

  do three trips for a hundred bucks. So Uber got me back on the road after a year and a half of no driving during the pandemic. They sent all these drivers, say, hey, do three trips, get a hundred dollars. I was like, shit, even I'll do that, right? That's easy free money, kind of my job to try out these services. Did it, got my hundred bucks. But if it was like, do five trips, get a Dogecoin or, you know, whatever percentage of a Dogecoin, I bet that would be like, whoa. You know, like that would really stand out. And it's been crazy, like that three for a hundred dollars. A lot of drivers were like, eh, I'm over it. I don't need to. Sounds too good to be true. Like, you know, normally the market is very elastic and they really have a lot of manual levers that they can pull and push with bonuses.

• 36:32Speaker 02

  If they see inclement weather is coming up, they know that demand is going to spike a little bit because more people want to take an Uber than they want to walk. Right? And so they'll increase the bonuses a little bit to get more drivers on to the platform or to take drivers from other services. And so they've had all these levers at their disposals over the years with financial incentives. And now they're putting those levers down and they're not working. They're like, hey, normally a three for a hundred dollar bonus, that gets everyone back on the road. And now drivers are like, eh, I got my unemployment or eh, I'm already driving for DoorDash and I'm driving for Instacart. Or it's like, hey, you know what? I haven't had a great experience.

• 37:04Anthony Pompliano?

  Or I made a bunch of money on Dogecoin and Bitcoin and whatever. Before we get into the last three questions to finish up, where can people go find more information from you? I feel like you're just this wealth of knowledge around all this stuff. So where can we send people?

• 37:17Speaker 02

  So my website, therideshareguy.com, that's sort of the starting point. We've also got a pretty popular YouTube channel where we release, you know, basically daily YouTube videos. And especially for more like the industry perspectives, my podcast is a good spot. I just had on, you know, the DoorDash president, for example, I've interviewed Dara a couple of times on my podcast. So that's really where we sort of try to combine the worker's perspective with like, you know, the industry, you know, what's happening at a higher level. And, you know, really just kind of analyze everything from, you know, the worker's perspective. But yeah, so basically type Uber, Lyft, Rideshare guy into any box on the internet and hopefully I should pop up.

• 37:53Anthony Pompliano?

  It's fascinating to me. So thank you so much for, for doing all the work. Three questions and then you get to ask me when to finish up.

• 37:58Speaker 02

  All right.

• 37:59Anthony Pompliano?

  First, what's the most important book you've ever read?

• 38:01Speaker 02

  The most important book I've ever read is probably Deep Work by Cal Newport, because he's, he's this MIT researcher. And I mean, I think he's like kind of semi-famous and sort of like productivity circles. And like I'm, you know, as a business owner, we talked about how tough it is running a business. Like I don't get paid to go to conferences, right? Like I'm here now for a conference. I don't get paid to, you know, do certain things. I really have to like be protective of my time. He's like a big fan. Basically when I read, I'll just say when I Read his book. I turned off all notifications on my phone. I only check my email once a day now. I pause my inbox. I batch process a lot more. And when I do work, I really try to get into deep work. He's got this really cool example of, um, you know, when you get a notification on your phone.

• 38:43Speaker 02

  Basically, it only takes a second to look away, but there's actually like a bit of cognitive drag going forward. So the task at hand is now going to take longer, whether you realize it or not. Just from that, like one second notification. So great book.

• 38:55Anthony Pompliano?

  That's definitely true. Second question is sleep schedule. Uh, friends at Eight Sleep have this mattress, thermo regulated bed. I sleep on it freezing cold, sleep way better. What is your sleep schedule? Maybe what is the average sleep schedule? Do you think of Uber, Lyft? DoorDash type drivers where they actually could be more profitable to work at night, which is during the day, et cetera.

• 39:17Speaker 02

  You know, I have to say, I think I actually listened to a few of your podcasts and hear you always talking about the eight.

• 39:21Anthony Pompliano?

  I love eight sleep. I'm like a religious person.

• 39:24Speaker 02

  I know. I feel like, uh, and you know what's crazy? There's actually like some big mattress bloggers out there that like review all these services. Very lucrative anyways.

• 39:33Speaker 02

  I, and I'm thinking about, I just bought a new bed when I started hearing about the eight sleep, but my, my, you know, I've got, I've got two kids, so let's just preface it with that. Okay. But I try to do, uh, 11 to seven. Um, and then usually if my kids get up early, I'm up closer to six. You know, unfortunately I will say though, like if you're working in the gig economy, it kind of messes with your sleep schedule, you know, like the most profitable hours are going to be late into the nights on Friday and Saturday nights typically. But you don't have to work those Friday, Saturday nights. That's what's so great about the gig economy. You can understand when those times of high demand are and balance that with your schedule, with your needs, right? Like you can still be very profitable in a bigger city, completely skipping Friday, Saturday nights. It honestly might be tough if you're in a smaller to medium city.

• 40:15Speaker 02

  To skip out on those Friday, Saturday nights. And that's the big difference. Like medium, small cities versus big cities, like LA is always busy. It's just like, you can always get a ride. So, you know, sleep schedule, I think, uh, is a little more chaotic. So I would say take it when you need it. If you're working in the gig economy.

• 40:31Anthony Pompliano?

  Absolutely. Uh, last question is aliens believer or non believer?

• 40:35Speaker 02

  Um, I mean, I think I saw a stat the other day. I did not. Verify this, maybe one of your listeners can, that said, there are more stars in the sky than grains of sand on this planet. So I just imagine that like how expansive this place is, like, there's gotta be something out there. I don't know if it's big or small, but like something, just I think by like pure statistical anomalies must have happened. And I think actually Neil deGrasse Tyson just released a cool book called Cosmic Queries that I started and was a little too boring for me. But if you're into that, I bet it's a good book.

• 41:09Anthony Pompliano?

  I absolutely think something's out there. There's gotta be, right?

• 41:12Speaker 02

  Yeah.

• 41:13Anthony Pompliano?

  You guys asked me one question to finish it up. What do you got for me?

• 41:15Speaker 02

  All right. So I'll be honest, like missed the Bitcoin train. Okay. I know it's still available and option, but like, I do really think about like these opportunities. Like, what do you think is maybe not the next Bitcoin, but like, what are the tactics or skills or principles, you know, that you would look at? Like, how do you tell like something that might be the next Bitcoin versus like, this is like a total piece of crap?

• 41:35Anthony Pompliano?

  Nothing's gonna be the next Bitcoin, right? And so.

• 41:39Speaker 02

  Opportunities of that scale, though.

• 41:40Anthony Pompliano?

  Yeah, well, just asymmetry exists in lots of markets, right? So you can go invest in technology startups. Obviously Bitcoin was a pretty big opportunity, etc. But I do think that there's this mindset difference between Bitcoin investors and maybe other types of investors. So most other investors are looking at shorter time horizons. They're looking for some sort of asymmetry. And it's much more of an investment decision, taking dollars and I am putting it into this. And when I pull it out, it's going to be dollars again. Bitcoiners think of it in much longer time horizon. They look at almost like saving.

• 42:12Speaker 02

  Yeah.

• 42:13Anthony Pompliano?

  So what I'm gonna do is I'm gonna take dollars that got paid in, but I'm gonna convert it to actual money, sound money. And then over time, the purchasing power is going to appreciate, right, which it goes up in US dollar terms, but they're not trying to come back into dollars, right? It's not a trade. It's not an investment in that sense. It's just, no, this is the asset. This is how I'm gonna store my wealth. I'm gonna protect it.

• 42:31Speaker 02

  Yeah.

• 42:31Anthony Pompliano?

  I think that mindset difference is important to understand.

• 42:35Speaker 02

  Yeah.

• 42:35Anthony Pompliano?

  And then if you just say, okay, cool, I'm gonna do that with some portion of my portfolio. I'm not yet all the way there in terms of like, let me go put everything in this global store of value. Then I think what people start looking for is these asymmetric opportunities, right? And the beauty of asymmetry is that you could put smaller amounts of cash. Capital to work and have kind of a higher payoff. And so I just tend to tell people like, don't go looking in the crypto markets for asymmetry.

• 42:55Speaker 02

  Yeah.

• 42:55Anthony Pompliano?

  Because there it's riddled with scams, like actual scams.

• 43:00Speaker 02

  Yeah.

• 43:00Anthony Pompliano?

  People use that word, but like actual things where they're trying to take your money. Uh, and then it's really, really hard for most regular people to underwrite. What are the opportunities? Like investing in businesses, which we've had, you know, decades and decades and decades of kind of historical precedent and work done to say, hey, how do you evaluate a business is hard.

• 43:17Speaker 02

  Yeah.

• 43:17Anthony Pompliano?

  Now imagine all these new things and no one really understands yet and everyone's trying to figure it out. And the professionals are still trying to figure it out. It's just hard, right?

• 43:24Speaker 02

  And that's why I think that I actually really liked the way you put it with that asymmetry term, right? I mean, I think like looking for that. And I guess, you know, one thing I thought of like you were talking about asymmetry. Capital opportunities, like for me, starting my business was sort of like an asymmetry, just like more like opportunity period, and it had less to do with the capital. Like when people asked me like, hey, why are you driving for Uber and Lyft? Like, I didn't know that I was going to start this huge digital media business and it would be my new career. In seven years, I'd be on this famous pump podcast, but um, you know, it was like, it was a low risk thing to try. And I feel like I have tried many of those things in my life that are like low risk, interesting opportunity. Something I'm also passionate about. And the, you know, third thing I like is that it like helps people, right? So I guess for me, like I've looked for, you know, those three things, help people, interesting, make money. And just kind of keep looking for that stuff.

• 44:08Anthony Pompliano?

  I always tell people that your salary is not going to make you rich, right? So owning a small business, whether you're driving, whether you're doing digital media or something else, that's the path to financial freedom.

• 44:17Speaker 02

  Yeah, cool. Appreciate it.

• 44:18Anthony Pompliano?

  Thank you so much for doing this. We're definitely got to do it again in the future.

• 44:21Speaker 02

  I'm around. Thank you, sir.