A 3-week social experiment

If you have been around the Internet lately, high profile sharing-economy type companies like Uber, Lyft, Instacart etc. should sound pretty familiar to you. This post isn’t about how insane their current valuations are, or about their amazing office-designs, but the one thing that actually helps them run – people who are willing to trade their time for money in the “sharing economy”.

In the increasingly “Uber for everything” world, we have seen everything from on-demand oil changes to in-home massages. We have arrived in the “future”. Today, you can turn on your phone, click on an app, and start working for a monetary return. Empowered by technology that basically does a very fundamental thing that helps markets run – connect demand with supply, instantaneously. Out of curiosity, I ran a 3-week social experiment where I signed up to drive for Lyft (giving someone a ride), Postmates (delivering food) and Instacart (delivering groceries) to (i) figure out how much one can actually make (ii) understand the last-mile customer experience in the “sharing economy”.

Everyone loves numbers, so let’s start with numbers:

Charts charts charts

Charts charts charts

Some brief conclusions (Again, these insights are specific to Austin in the month of October, and only represents one possible interpretation of reality):

  • It is difficult to breach the $25/hr barrier that most of these companies tout as an hourly minimum
  • Services that allow for the customers to tip is generally a better option to work for as there is potential for greater upside (note: Uber does not have a tip function)
  • If you consider cost of gas, the actual hourly wage could be 10-15% lower

Random notes: (i) The $44.22 average total hourly wage is the result of a supply acquisition promo which Lyft is currently offering in certain cities across the US. Use this promo code to be eligible for between $500-$1000 bonus(depending on your city) after giving 50 rides in the first 30 days! (ii) Instacartv2 is their latest revision to their payout structure which raises the average hourly wage by about $8

Money aside, the experience of working for these “sharing economy” companies is actually quite interesting. Through the 3-weeks, I got to interact with many customers that use these services. I now understand who they are, why they use these apps and basically how technology has improved lives (… in some cases solved first-world-problems). Here is a brief description of each of them:

Lyft

lyft-ridesharing

By far my favorite of the three, Lyft users are generally super friendly and are looking to interact with you (and not their smartphones) during their ride. It is common belief that Uber users tend to see their drivers as just a cab driver, while Lyft users tend to view the entire ecosystem as more of a community. From my limited experience, I tend to agree! Over the course of the Lyft rides I gave, I managed to learn about a range of topics including how to publish a book (from a novelist), the burlesque scene in Austin (from a, well, Burlesque dancer), how to detect skin cancer (from a dermatologist), how transgenders get their names changed in the eyes of the law (from a UT Law student), things to consider before applying to an MBA program (from a first year MBA student)… Beyond learning about the most random things (did I mention that the Burlesque dancer was specifically educating me about the plus-sized Burlesque scene, which is very, very interesting to say the least), you are also likely to start to discover nook and crannies of your own city – unknown restaurants, hidden bars, new neighborhoods etc…

Most importantly though, it is the use case for ride-sharing. Ride sharing does the critical thing of unlocking supply of available transportation at an affordable rate for others. In the case of a recent Lyft ride I gave to someone with a leg injury, we figured that in the world before Uber/Lyft, his only alternative was to take exorbitant taxi rides to get from work/school-home and vice versa.

Instacart

1200_20x_20630_20Instacart_20Share_20Banner_202

While Instacart sucked at compensating well, the interesting thing was the use-case for having groceries delivered to a customer. I cannot imagine paying money for someone to do my groceries and deliver them to me; I love grocery shopping, and I guess I have time that I can dedicate to this particular activity. However, through interactions with end-users, I guess I figured out that there are clearly others who disagree, and here are the various reasons why:

  1. Too busy – This applies especially to moms who have to take care of their young children, and going to get groceries could be a complete nightmare. Moms represent a sizable portion of the userbase.
  2. Too difficult – This applies to folks with disabilities/mobility challenges. When I delivered a bag of groceries to an old lady in a wheelchair, I had the AH-HA moment that made me believe in the power of technology again
  3. Too far – This generally applies to distance, especially for folks such as college students who do not own cars. The state of public transportation in the US is pretty dismal, and here is the gap that needs to be filled. The other interesting case is where a family who lives three hours away in Houston decided to order groceries for their daughter who goes to college in Austin to make sure that she was eating right. All this empowered by technology.

Of course, there are cases of the wealthy folks who are just too lazy, and can pay anyone to do anything for them. Story – I actually delivered a bag of toilet cleaning materials to a housecleaner for her to clean this huge mansion. So basically the owner on-demanded toilet cleaning materials to his cleaner, to clean his house.

Postmates

postmates

Postmates provides the highest potential for compensation because generally users tip very well based on typical food-delivery type rates. So if they ordered $50 worth of food, they are likely to leave the Postmate with a $5-10 tip, on top of the delivery fee. However, the Postmates service is very much your typical food delivery service, helping to unlock more revenue for restaurants who do not offer delivery. The craziest thing I found out is… COLLEGE STUDENTS forking out $20 for a sandwich ($10 sandwich, $10 delivery) delivered to their door.

Conclusion

What a learning experience! Of course, I got to walk away with some extra $$$ (especially with the Lyft promo which again rewards an additional $500-$1000 bonus after you give 50 rides within the first 30 days using this promo code), which will come in useful towards our next big travel adventure in Cuba. Most importantly though, I came to appreciate a little more of the world around me, learned random factoids and trivia about the people of my city, understood the challenges of hour-wage workers (+ how important tips are) and came to appreciate the helpful side (and in some cases… obnoxious users) of the Uber-for-everything world.

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