Sep 24, 2020
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How This 22-Year-Old Makes Money Helping Carless People Drive For Uber And Lyft

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Since graduating from high school six years ago at 16 Apollo Ra has dabbled in a chain of professions ranging from nursing to network marketing to commercial real estate. His one mainstay was driving for Uber the rideshare company that pairs people with cars looking to make one other buck with people who need rides

 

He loved the ability it offered in addition the consistent income. However many passengers told him how much they would like to drive for Uber but that they didn t have a car. Eventually something clicked in my mind that if that’s one of these common problem I may become the solution he wrote in an email

 

With his brother and a chum he decided to launch a business buying cars registering them with the proper permits commercially insuring them and then leasing them out to Uber drivers for a share of the profits. A few startups also are in this space plus Uber recently announced a leasing program Xchange Leasing but many smaller operators work like Ra s company advertising on Craigslist or other more low-key ways

 

The 1st car they purchased was a 2015 Honda Accord Hybrid which he added to a previously owned Toyota and a BMW. The 1st driver they hired was someone he met at Starbucks complaining about his job. I asked him if he wanted to work with me instead and within a week he was at the road he says

 

The business also has a drive-to-own program wherein drivers can use a portion in their earnings to eventually own the vehicle. Now a year later the business has 23 drivers and 8 cars and earns $20 000 in profit a month. He and his business partners are expanding to Los Angeles and plan to possess at least 100 vehicles and purchase their own parking garage

 

Because gasoline is their biggest expense they are looking into purchasing Teslas. Ra who I met when he picked me up in a Lyft in San Francisco answered a few questions about how his business which doesn t have an official name works. (And if you re wondering where his name comes from he made it up himself when he was in junior high and did a report on Apollo the Greek god and Ra an Egyptian god

 

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Use the career and money advice in The Millennial Game Plan to get and stay ahead for good. What financial arrangement do you’ve with the drivers? When first starting out we were paying drivers 50% of the money they generated and keeping the rest to pay for gas insurance FasTrack [a Bay Area program for automatically paying tolls] etc

 

However Uber told us we were not allowed to do that because we were not working with the UberBlack program [which provides private drivers in high-end sedans] and therefore we are not allowed to take anyone s earnings. We might work directly with the Black program except that that’s currently not accepting applications in San Francisco

 

So now Uber pays our drivers directly our drivers drive our vehicles with the certainty that they’ll pay us a 50% portion in their earnings while driving our vehicles. Basically we run our business on trust. We are not allowed to set any quotas for our drivers because we are not allowed to force them to work for Uber while they drive

 

The contract simply states that we split any earnings while in the vehicle 50%. This has created a whole series of problems on its own that I m sure you can imagine and we are still trying to work this out. What styles of problems? We ve had to cut our losses a few times because drivers have refused to pay — this occurs traditionally the week that they terminate their contract

 

We’ve had a few drivers take the money and run and we’ve also had a few drivers not pay and then come up with the money a few weeks down the line. We’ve accepted this as conceivable and do our best to hire trustworthy people. More generally finding people who want to work has been easy but finding people who stay has been much harder which I guess is a struggle in any lower-paying field

 

We do what we can to make the work as comfortable as possible. We buy all of our vehicles new so that our drivers aren t stuck in a 2008 Prius like a conventional taxi driver. Our fleet is pretty vast but has everything from 2015 Ford Fusions and Toyota Corollas to BMWs

 

We try to match the quality of the vehicle to the work ethic of the driver. How do the numbers break down — expenses and profits? Each vehicle costs us roughly $25 000 and we aim to have each car paid off in the first 18 months. To this point we ve been on track

 

If you run each car at 100 hours a week on a 50/50 split you should be capable to net at least $700-$800 a week per vehicle after all expenses are paid in San Francisco. Both Uber and Lyft offer referral bonuses for drivers and the individual that recruited them some totaling as high as $750 and these have definitely helped alleviate the random expenses that arise inclusive of flat tires getting towed parking tickets etc

 

Gas is definitely our largest expense. We charge 5% of net earnings from our drivers for gas but meaning if they net $500 we only take $25 for gas. We’ve considered purchasing vehicles inclusive of Teslas but are waiting at the battery capacity to extend to 400+ miles/day. We know shall we cut our vehicle cost by upwards of 80% by buying older used cars but we eat this expense for our drivers comfort

 

The average Uber driver in San Francisco can take home $30-$35 an hour so after the 50/50 split the driver can expect about $15 an hour. This business has the highest ROI that I have encountered but it comes with various risk attached since you are responsible for such a lot of drivers

 

But overall I m very pleased with this business model. We are almost a year into our business now and we are profitable already. How does it work logistically? How do you hand off the cars between drivers and where do you park them? Our drivers pass the vehicles off to each other and drop one another off at home or preferred drop-off location and we store a few cars in a parking garage

 

The goal is to have every car running for 120 hours a week but usually we get them going about 90-100 hours a week. What kind of insurance do you offer the drivers? All of our drivers are fully covered with $2. 3 million policies through Farmers. This covers them from the time they are in the car to the time they exit whether a passenger is in the vehicle or not

 

How does your drive-to-own program work? A full-time driver can use our vehicle and put a part of his earnings toward owning that vehicle when it s completely paid off. For these drivers in place of a 50/50 split we do a 60/40 split. The additional 10% is our pocket money until the automobile is paid off at which point it s transferred to the individual that was driving for us

 

This allows us to hide the charges of the vehicle completely while still generating some form of profit. How do you find drivers? We find our drivers mostly through referrals from other drivers and Craigslist. How do Uber and Lyft regard your enterprise? My biggest fear is that my income would be ripped faraway from me if Uber or Lyft change their regulations on what it takes to qualify as a driver or if they just don’t allow me to continue what I’m doing

 

To this point they have not been unsupportive but they also haven’t been as helpful as they may be. I see our business relationship as a don t ask don t tell kind of deal. I’m confident they will allow me to continue though because all parties involved are benefiting and I believe that’s the way to do business

 

How do you differ from Breeze HyreCar and Uber s new leasing program Xchange Leasing? The major difference is that Breeze and Xchange Leasing are leasing programs. We allow multiple drivers to apply the cars and the vehicles are never leased to any drivers. Also we don’t require any money to be put down nor do you ought to qualify for a lease or contract with us

 

You just must agree to drive our cars on a 50/50 split. Some of HyreCar s vehicles are leased and others are rented and charged an hourly rate. What other plans you’ve for your company? In LA we plan to expand our business and purchase higher-quality vehicles. LA qualifies for a program called UberLux in addition UberPlus which are options for nicer vehicles at a more robust price point

 

We plan to add at least 10 vehicles to the LA market hopefully all Teslas. Our biggest issue would be being able to get Tesla to sell us 10 cars despite its waiting list. The end goal of this business would be to have 100 luxury vehicles at the Uber platform

 

At this point we wish to sell our fleet either directly to Uber Tesla or even a competitor. The business overall assumes too much risk as a result of the liability we’ve over any accidents caused by drivers

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