Ride-Hailing Drivers Turn Entrepreneurs: The Rise of Independent Transportation Services
Ride-Hailing Drivers Shift Gears, Launch Own Businesses Amid Declining Profits
In a growing trend, ride-hailing drivers for companies like Uber and Lyft are increasingly starting their transportation businesses, seeking greater autonomy and improved income opportunities. This shift comes as many drivers report declining profitability from traditional ride-sharing platforms.
Brian, who began driving for Uber in 2013 when earnings were more lucrative, now leverages the app to recruit clients for his private black-car service. “I use Uber and Lyft as a marketing tool,” he explains, offering business cards and price quotes to interested riders during trips.
This sentiment is echoed by four other drivers interviewed, all of whom have experienced reduced earnings from ride-hailing apps. These entrepreneurial drivers are now offering more reliable and sometimes cheaper rides than the apps, though many requested anonymity due to fears of deactivation from the platforms.
For Brian, approximately half of his trips now come from private clients, with the remainder sourced through Uber and Lyft. Private rides often prove more profitable due to the absence of app commissions, allowing drivers to build repeat business and attract new clients through word-of-mouth referrals.
When approached for comment, Uber emphasized its stance on drivers as independent contractors, while Lyft’s terms allow for other employment opportunities. Neither company directly addressed the issue of drivers recruiting private clients through their platforms.
Torsten Kunert, a ride-share consultant, has observed an increase in drivers starting their businesses. He now offers an online course for those looking to transition away from app-based driving. “It’s not just drivers seeking alternatives,” Kunert notes. “Riders are also looking for better deals outside the apps.”
However, the shift to private services comes with its own set of challenges. Drivers must consider the costs of commercial insurance and client development, often investing in high-end vehicles to cater to a more discerning clientele.
In Ontario, Phil has adopted a strategy of offering rides for a flat rate, pitching his private service during Uber trips. “Uber pay just isn’t enough anymore,” he states. Similarly, a San Diego driver has launched a black car service using a Cadillac Escalade, targeting business clients. While this approach offers higher earning potential compared to Uber’s black car service, it also requires more effort in vehicle maintenance and client communication.
This trend signifies a broader shift in driver mindset toward independence and entrepreneurship. As drivers move away from reliance on Uber and Lyft, many report increased earning potential and a greater sense of self-worth. The evolving landscape of ride-hailing services suggests a future where independent operators may play an increasingly significant role in urban transportation.
