Being a driver at Uber or Shipt isn't all it's cracked up to be, Tampa workers say

Published December 10 2015
Updated December 10 2015

Jeff Loper was one of the original drivers who signed up for Uber when the app launched in Tampa Bay last year.

At first, it was easy to make money driving on the weekends when rates were $1.25 a mile and the number of drivers was relatively small.

But Loper says fares around Tampa Bay are now 90 cents a mile and there are dozens more drivers on the road competing for fares.

"I made $6 an hour last weekend. That's less than half of what I was making last year," said Loper, 63.

It's easy to see why working as a driver for Uber or as a delivery person for Shipt would be a dream job for some people. You're not stuck in an office. You're kind of your own boss. You set your own schedule.

Indeed, hundreds if not thousands of people in the Tampa Bay area are working today as independent contractors for ride-sharing companies like Uber and Lyft or are delivering Publix groceries for Shipt. People who rent out rooms in their house through Airbnb also fall into this category.

But as many of these people are now finding out, there's peril in becoming an independent contractor.

RELATED: Uber drivers are contractors, not employees, Florida jobs chief rules.

The pay that these companies offer when they first arrive in a city to lure workers is eventually reduced as more workers flood the market. This can mean they will be paid less as the market becomes more competitive.

As an independent contractor, you're responsible for the wear and tear on your car and your house. You're responsible for paying more taxes than you would if you were employed full time somewhere else, as companies often pick up some of the taxes for you. That doesn't include paying for your own insurance, which may not cover you if you get in an accident if you don't have a commercial grade policy or if the insurance company finds out you're renting your home to strangers.

Loper moved to Clearwater to be closer to his elderly parents after working as an investment banker on Wall Street in New York and as an entrepreneur in the television business for many years. To make a little extra cash, he signed up for Uber.

Last year he drove 35,000 miles that he was paid for as an Uber driver. He made $4,500 for the year, or an average of $11 an hour, for driving on the weekends in his 2008 Chrysler Town & Country mini van. But he wasn't paid for the additional 10,000 miles he drove to pick up jobs or for the maintenance required on his van.

"That's the challenge. We're being forced to accept the low fares. The choice is make less or walk away," he said.

Employing independent contractors makes a lot of sense for these companies. There's little overhead or investment in equipment. There's no need to provide health insurance or other employee benefits, though Airbnb does offer a "host protection coverage" for some injuries and property damage.

Katherine Voss, 36, said she made nearly $1,000 picking up and dropping off people as a Lyft and Uber driver at the Gasparilla parade last year. Voss saw a Lyft ad on Craigslist, and was looking to make a career change after working as a paralegal for several years.

"I used to be in an office all day and have bosses yelling at me. I wanted something different," Voss said. Another perk for her was being able to pick up her children from school every day.

She signed up to be a driver for both companies, since there's no contract prohibiting her from doing that as an independent contractor.

"I thought I could make this a full-time thing, but it ended up being too many drivers and not enough people using it, unless there were big events like Gasparilla," she said.

So she tried Shipt, a new Publix grocery delivery service that launched in Tampa Bay earlier this year. She found similar results.

"There was so much demand for Shipt at first, I was doing 10 or 12 orders a day," Voss said. She made enough money in one week to pay her rent that month. But as more shoppers were hired, the rates went down.

RELATED: Shipt grocery delivery app expanding fast in Florida.

Shipt advertises that shoppers can make $15-$25 an hour for shopping and delivering groceries, but Voss said that's nearly impossible to make.

All of which raises the question: Are jobs with Uber or Shipt meant to attract full-time employees?

Earlier this year, Uber CEO Travis Kalanick defended the company's policy on contracted employees when he said that more than half of Uber's drivers work nine hours or less per week.

These tech companies have come under fire for a variety of reasons — from customer safety to fair compensation — over the years. Class action lawsuits have been filed in some cases. In others, Uber and Airbnb services been banned for reasons related to taxi company contracts and paying local tourism taxes.

But still, people keep working for them and keep using their services.

"I think any sort of innovation that is driven by markets doing what markets do is ultimately a positive development," said Sean Snaith, executive director of the Institute of Economic Competitiveness at the University of Central Florida. "It's disruptive. Often times, these sort of advances are. But no one is forcing them to provide this service or become a driver. They're improving their own situation, or else they wouldn't do it."

After the recession, the United States experienced the rise of the "sharing economy," where fewer owned than rented, and this idea of "borrowing" a room in someone's home or sharing a ride instead of paying for a cab made a lot of sense.

"With this new on-demand economy, these jobs fit right in," said William Perez, a tax accountant based in San Francisco who has written about tax issues related to Uber drivers and other independent contractors. "It's interesting to see how quickly someone can get back into the labor market through these kinds of jobs with relatively no hoops to jump through."

It has been more than six years since the onslaught of the recession, and the recovery has been lackluster at best, Snaith said. But companies like Uber and Airbnb had a role to play in getting people back into the labor force.

"If someone lost a full time job and are doing Uber because there was nothing else, then that person's situation may not have improved from their previous job. But on the other hand, what are the options?" Snaith said. "It's an improvement over what they were doing at that time."

RELATED: Airbnb rooms to be taxed across Florida starting next month.

Melissa Mangold owns a charming 1925 bungalow in downtown St. Petersburg, which she shares with strangers nearly every day of the month. Renting out two extra bedrooms in her home on Airbnb has been her only form of income since May.

"I have a 4-year-old son with a sensory processing disorder so it's hard to leave him in the care of others who don't know his quirks. I also have no family close by who can watch him so this is a way I can stay home and be here for him as well as pay my mortgage and bills," said Mangold, 40. She sets her own price to rent the rooms in her home, and Airbnb takes a commission from it. "I'm also saving for the home repairs we still need, which are pretty expensive."

Mangold has had repeat customers through Airbnb and it has opened new doors for her to make money. For instance, HSN contacted Mangold to shoot promotional retail photos inside her home after they found her on Airbnb.

Alexis Martinez, 25, from Seminole Heights, has been working part-time as a Shipt shopper since the company launched in Tampa Bay earlier this summer. Come January, she plans to ramp up her hours to get full-time work, which she says is absolutely doable.

"You really have to hustle and know that working evenings and weekends is when you're going to get the biggest orders, but you could totally make this a full time career," Martinez said.

As a horse trainer and breeder, Martinez has worked as a private contractor in one way or another for most of her career.

"The biggest thing is knowing what you can deduct from your taxes and paying attention, like not starting to log your mileage halfway through the year," she said.

She says the job isn't for everyone. She said there has been a lot of turnover at Shipt since she first started.

"It works for my schedule," she said. "It's helped me out while I was transitioning between other jobs."

Contact Justine Griffin at [email protected] or (727) 893-8467. Follow @SunBizGriffin.

           
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