I've touched on the subject of the miles:$ ratio in a previous post and I'm sorry I just can't let it go.
I'm not sure how the gold standard of $1+ per mile came about, but there's no real logic to it when you crunch the numbers as I have (See for yourself: https://cruz511.org/calculator/calc.html).
It may seem like I'm taking the side of delivery platforms like DoorDash and UberEats, but the numbers just don't lie. While, as I stated in an earlier post, if you want to continue to operate under the $1+ per mile standard, then by all means, more luck to you. I just feel that a lot of drivers (In most but not all cases) are making life more difficult for themselves in doing so.
Based on my calculations, the costs to operate your vehicle (Minus insurance and registration fees' and I'll touch on that in a moment) is far below the $1+ gold standard. Of course it depends on which type of vehicle you drive and the condition it's in (For some it's far less, for others it's more), but based on the standard vehicle that gets an average of 25 mpgs City and 32 mpgs highway and that the vehicle is in good condition, we're looking at a bare minimum of .85 per mile or less.
Now about insurance and registration fee's. I don't factor those in, because those are basic standard operating costs. Even if you weren't doing food delivery or rideshare, you'd be doing something else so those fee's goes without saying. Let's also not forget mileage tax deductions, which by the way, take into consideration (Depending on what kind of deduction method you use) insurance, registration and overall basic maintenance costs. So that brings the amount even lower than .85 per mile.
For mileage alone, based on a price of $3.10 per gallon fill up, you're looking at an average of .44-.46 per mile. Of course that number will be higher or lower depending on fuel prices in your area.
So why are we using the $1+ per mile "Gold Standard" of the food delivery gig?
To me, it would seem wiser to use the dollar per hour payout ratio in both delivery and rideshare. Rideshare costs are calculated differently but still, using an hourly rate of pay versus miles:$ is more sensible.
When drivers sit in parking lots, declining order after order then complain how slow business is and complain that they're not getting enough quality orders based on the $1+ per mile ratio, they're hurting the chances of these app platforms giving out better incentives.
For example, the old 'I'm not taking an order under $7' driver is only hurting things not helping things. If I had a $5.75 order (Like I did last night), can complete it in 10-15 minutes and drive even 5.75 miles, no matter how you compute if you use the correct formula, it's a win. Take 3 of those in an hour and you're netting $17.25 an hour. $23 an hour if you take 4 of those orders. Whereas I can be sitting 30 minutes up to an hour to wait for that $7+ order to come in.
Yesterday, I put this to a test and took several orders under $7 and not only made my bank for that night (My personal quota), but I made it an hour earlier than usual if I were to operate under the $1+ per mile standard. If I decided to stay an hour more to complete the time I alloted for deliveries, I probably could have doubled my quota. And several of those orders by the way included hidden tips, so I more than surpassed my personal quota. I think I had one order that was over $7 and that was a solid $9 order which was my last one for the evening. When going over my mileage and vehicle costs spent, based on the proper calculations, I made way more than I spent in operating costs and averaged about $18 per hour (Gross) for a 3 hour time allotment, which I cut short an hour because I met my personal quota and wanted to go home. And I was NOT using the $1 per mile standard.
There are times however, where there are certain orders that you should decline because they just don't make any sense. Even ones that appear on the surface to payout pretty decent. Orders I recommend declining are:
-If it takes you out of your zone (And you don't want to stay where you end up) and/or leads you into a deadzone. Completely understandable and legit in my opinion. I always decline these types of orders.
-Orders that are on your blacklist. I have a small blacklist of restaurants I simply will not pick up from due to wait times. I believe there are only 3 or 4 of them, but I learned a long time ago, if I ever decide to violate my blacklist and take orders from those restaurants, I always end up paying the price for it.
-I simply am a firm believer that no order that pays out under $3.50 is worth delivering no matter how quick or how short the distance. To me it's a damn insult to my intelligence. These orders are 'No Tip' orders. I have absolutely no sympathy and many bad 4 letter words to describe these types of customers. The only exception I would make to this rule is if you're in a zone on foot or bike and everything is within close walking/riding distance to one another. Then MAYBE it would be worth taking on.
-Orders that pay out something like $4 for 17 miles driven. You don't have to be a mathematical genius to figure out just at the top of your head that orders like this aren't profitable. For example, operating costs for the order I just described would be roughly $7.77. To me, these orders are offensive when they come in and anyone with half a brain in their head would instantly decline them. Unfortunately, there are a lot of people out there without a half a brain in their head.
-Orders that take you far away from home at the end of your shift. There's simply no reason to take these orders. You should strive to do the complete opposite and take orders that will keep you closer not further away. A lot of people will make a compromise if the order appears to be a high payout because well 'It's my last order'. Why?
Oh and one more thing. About commute...most people in 1099 jobs or in a W-2 capacity don't get paid to travel to and from work. Some contractors do factor in travel costs if they feel a job far away is worth it, but for the most part, with a few exceptions, most people don't get paid for their daily commute. It would just be wise to try and make your final drop-off as closest to home as possible unless you feel the payout is worth it to travel further away. As far as traveling to start your shift, if you start from home, then you have nothing to consider, but if you're like me, who doesn't like to work in his home city (Even though it's a high volume market area for food delivery), try to work somewhere as close to your home as possible to cut back on commute time. Then again, a lot of people from time to time, like to even work out of state to see what the market is like (Something I've yet to try). I would imagine most people don't factor in travel to and from costs when they do that either. So not factor in my operating costs are commutes to and from (Before the start of your first order and after the completion of your last).
Food delivery and rideshare isn't rocket science. Please stop making it out to be something that it's not.
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