The Calculus of Uber Eats

In California, this earnings number means nothing

The game of Uber Eats is surprisingly complex. The goal of the game is to make as much money as you can in the shortest amount of time. On the surface this seems simple enough. Just press the big ‘Go’ button, accept whatever pop-up offer comes your way, and follow the directions. Then after a few orders, you begin to notice that there is no apparent rhyme or reason to how much each delivery pays. Each order offer is based on a variable base rate, mileage pay, active time driving from pickup to the customer, and any tentative tip entered entered by the customer. This offer may actually be the sum of two orders (or more in the case of Apple deliveries).

So let me explain my 90-minute delivery evening and try to break it down to show you how confusing this is:

Order #1: Taco Bell delivery for $5.22. This takes 25 minutes and 3.4 miles

Order #2 and #3: Two deliveries bundled together for $14.29 including a tip. This takes 43 minutes and 6.2 miles.

The driver app documents this as 1-hour of “active work” for $19.51. So, is this what I made for my 90-minutes? Not at all. Look at all the additional variables:

• Prop 22 adjustment — This took place in California, so we go back to the pre-tip amount of $12.81 and since this is less than the Prop 22 guaranteed amount $18/hr for my 1-hour of “active work”, we start over with $18 + $0.30 x 9.6miles. This is $18 + $2.88 = $20.88. Now I can also add my tip of $6.70, so now I just made $27.58 in one hour.
• Subtract actual gas used — my car gets about 30 mpg but the full trip from home and back was about 15 miles or 0.5 gallons at about $5.50/gallon in Cali. So, now $27.58–$2.75 = $24.83 in pre-tax earnings.
• Tax deduction on miles — $0.585 cents per mile x 9.6miles = $5.62 tax deduction. I’m just getting this from the business miles on the IRS site (https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2022).
• Income Taxes — you likely pay about the same or a bit less (9.3% Ca + 24% Federal = 33.3%). So 1/3 of my $24.83 goes to the man. This is $8.27 owed. This is where I’m no expert and I’m going to guess. If I can deduct my mileage here, we end up with $8.27–$5.62, so that I now only owe the man $2.65 in income taxes for my “hour” or “active work”. My final take home should be $24.83-$2.65 = $22.18. This almost exactly matches the cost of my dinner (sandwich, soda, and tip).

Conclusion: Just Show Me The Tip!

No, this isn’t a call for airdrops. What really makes the difference in accepting an order, and what is not shown in a pop-up, is the actual tip amount. I will argue that, in California, there is no actual way to know if the order is worth it or not in advance. That $17 order could take an hour and be replaced by the Prop 22 $18 hour. Then again those three $4 orders could take an hour and still leave you with your Prop 22 $18 hour. You rarely ever exceed the $18 hour in just order amounts so whatever you take ends up being the same thing, $18 for the hour plus tips. Here are my final tips:

• Stay “Active” — just take everything with the exception of drives to areas or places you don’t want to be in or that will require excessive ‘inactive’ time such as long drives back without orders.
• Track those miles every time, because the tax deduction will be BIG at the end of the year.
• Prop 22 supplement money is added once ever two weeks in your Earnings on your account. It displays as “Other Earnings”. So for those that are new, this is a pleasant surprise since there is not other estimate of how much it will be or when it will appear. To give you an idea of how much this is, my last supplement amount was $399 for the previous two weeks. I typically drive for about 32 hours a week. So maybe this is around $6.25/hour to bring you up to just over minimum wage in Cali.
• Target times to work and places to hang where the orders tend to lead to the best tips with the least amount of problems (hint: the app tells you the busy times for each area you are in and any supplements). I avoid heavy apartment / condo areas or old neighborhoods with bad lighting, bad parking, bad roads, bad house numbers, hidden entrances, and crazy paranoid neighbors and dogs. Keep your supplement, these are not worth it due to all the extra back and forth customer communication and risks to me and my car. Regardless of the supplement, hard nope.

Tonight, I received on tip on a large taco shop order from a popular beach taco shop and zero tip from a pizza order or a large Taco Bell order. I typically decline the fast food orders because ironically, the fast food places are actually the slowest and most disorganized and the customers tip poorly if at all. So you end up spending more time for less money. Granted if you work late nights, it is typically all fast food or convenience stores. I think there should be a much bigger supplement for late night, like there is in other jobs with late night work. I hope my experience and insights so far are interesting or helpful.