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Hertz's new mega order with Tesla is not going to work for Uber drivers. Ask me how I know.

Updated: Nov 11, 2021


Early last week, rent-a-car giant Hertz began finalizing a $4.2 billion deal with Tesla to purchase 100,000 new Model 3's, an order that could swell to up to 200,000 cars by the end of 2024. Half of this order will be directed towards a rental fleet for Uber drivers. At least initially, the cost of renting a Model 3 for Ubering will be $334 a week and will include maintenance and insurance -- but not charging. Uber's CEO Dara Khosrowshahi is confident there will be sufficient demand amongst Uber drivers to support the initial 50,000 car allotment. And that is where we will begin.

(Full Disclosure: I am a full-time rideshare driver who has given over 10,000 rides in the last 4 years. This provides me both insight and bias. I try to analyze things as I see them, but we are always colored by our most frequent and intimate experiences. Call me out where you feel I'm being unreasonable or inconsistent, I can take it and I'm here for it.)

I currently use a Tesla Model 3 as my primary vehicle in both my personal and professional endeavors. It's pretty awesome. Ok it's great. But it's not perfect. Especially for full-time rideshare. As someone who supports a family primarily with rideshare income, if my primary vehicle has attributes that keep me from spending more hours on the road, then it has to make up for it in other places. I believe that it does, but only as it applies to situations similar to mine.

(2018 Model 3 Long Range RWD in Red Multi-Coat)

(ain't she pretty)

Driving my Tesla for the past 6 or so months for rideshare has been a bizarre and amazing experience. Love them, hate them or in between, Tesla's rise to the world's most valuable automaker has been a fascinating case study in branding. Much in the way that Apple has long since already gotten to, Tesla is now at the point where price is moving further and further down the list of buying criterion for prospective customers. This year alone Tesla is giving their own real-time Economics 101 class, incrementally raising prices multiple times in the face of raging demand. The only thing going up faster than Tesla purchase prices is the stock price itself.

(Live video of Tesla's run through the stock market this year)

My particular Model 3 has 325 miles of range. Unfortunately, the Long Range RWD is not offered as a configuration any more. Knowing that I would use it daily both professionally and personally, I wanted as much range as I could get. The standard-range base Model 3 was still below $40,000 at the time of my purchase, and the LR AWD was 47, but I ended up finding exactly what I wanted in the used market for under 40. Having the extra 60-ish miles of range over a new base model has (literally) saved my ass a couple times, and it makes all the difference in the world knowing that if you want to end your shift with 50 miles of range, you can reliably make it home to charging safety. I live 20 miles from my primary market, Seattle. I try not to push the range thing to the limit too much as I'm intimately aware of what it's like to have to drive 18 mph in a 40 praying that you can make it to a supercharger because you were a dumbass and didn't charge earlier.

(Actual footage of me trying to make it to a supercharger with 9 miles of range left)

Though I haven't seen this directly mentioned, at $42,000 a unit (and no discount according to Musk) it would seem apparent that the 267 mile range base model will be what's delivered. While this range figure may work just fine for vacationers and travelers who rent from Hertz, it will be a major limiting factor in the earning potential of rideshare drivers. Here's why.


Range estimates are just that, estimates. While 267 miles sounds like all the range you would ever need for a full day of Uber driving, it isn't. When you drive an ICE vehicle, you tend to not be nearly as aware of the things in your car that use the most energy and subsequently impact gas mileage the greatest. Because ranges are so much longer and fuel exponentially more available, factors that greatly impact the range of electric cars such as outside temperature, highway driving speed, and use of the heating/AC system just don't affect ICE drivers the same way. As someone who owns both a Chevy Bolt and a Model 3, let me tell you that if you drive 70-75mph on the freeway in cold temperatures (let's just say 45F or below) with the heat at a level that is non-masochistic, expect to get about 50-60% of what your range limit is at best.

Until the pandemic hit and completely obliterated business travel, roughly half of my earnings as a rideshare driver came from my early morning airport shifts from 3 to 7am. It's a wonderful time to be on the road, as traffic is minimal and vehicle wear and tear is significantly less cruising at spirited high speeds of 75+ vs the clang and bang of city driving. Rideshare earnings are simply a function of how fast and far your wheels move. Even with deadheading back from the airport in to the city (roughly 12-15 miles in the case of Seattle), 3-4 airport trips can easily be made during this time block. I did this for years. With a gas vehicle, any gas vehicle, your only choice in this situation would be how fast you want to zoom back and forth and what level of inferno you want the heat to be at. When I was attempting this is my in Bolt, (240 miles of stated range) I would be lucky to get 3 of these trips in before having to limp to charging safety. I would guess my 325 mile Tesla could complete the 4 trips with it's increased range, but it would be toasted by 7:30am and need a significant charge to resume service. And my Tesla has 20% more range than the ones which will be part of the Hertz/Uber fleet. For drivers who frequent this time period, the range of the Tesla is going to be a major pain in the ass. Maybe if you live in California you'd be ok with the warm weather, but God help you if you live anywhere it gets legitimately cold. I can heartily say the chart below is commensurate with my real world experience:

source: Geotab

Again this chart only maps range as a function temperature alone. Add in the HVAC (10-15% penalty) and spirited driving (70+) and you're right at 50-60% of stated range. That ain't gonna work for full-time drivers in a good portion of the country, who would be the only ones even considering spending $1450 a month on a rented commercial vehicle. Let's assume for a moment that the reported extra $1 (gee thanks Uber!) per ride cancels out supercharging fees. I'm sorry I can't resist:

"A whole quarter"

Any EV driver that has owned their EV for more than 12 months can attest to these seasonal fluctuation changes. Uber drivers transitioning from Priuses and other hybrid or ICE vehicles will not be aware of this. I certainly wasn't. I sincerely hope that this attribute is made very clear to potential renters of these vehicles.

The intention to have wide-spread adoption of EVs throughout the livery and rideshare industries is certainly a noble one, and a goal that can be accomplished with increased access to charging and driver education. It has recently been reported that up to 40% of miles driven by rideshare drivers are "deadhead" miles, meaning no passenger in the car. This is even more prevalent among taxi drivers, as taxis are dying or dead outside of airports. When that asshole cabbie blows your doors off on the freeway going 85mph at 10pm on Sunday night, he's deadheading back to the airport to get in line. This a common practice amongst full-time Uber drivers too. Go to the airport queue, take a ride, deadhead back to the queue, wait hours for a ride, repeat. It's incredibly stupid and wasteful beyond all get out, but they do it. This is why you see Priuses with 350k on them. There is no possible way to rack up those kinds of miles without extensive deadheading. Why does this matter as it relates to Hertz/Uber/Tesla?

It matters because you can't do this in an EV. I mean you can, but as earlier stated if you bomb back and forth on the freeway at 70+ all day and night, you will deplete your range in short order. Then you have to charge, which while getting more convenient all the time is still an order of magnitude more difficult than simply getting a tank of gas. Not all full time Uber drivers conduct their business in this fashion obviously, but enough of them do that current EV ranges (even Teslas) and charging infrastructure will simply not work for them. The biggest value proposition of EV ownership is the cost savings and convenience of being able to charge your EV at home. While the charging infrastructure is going to explode over the next 5 years, it's still going to take a long time (and A LOT of money) to build all of that out. Even if charging were part of the rental plan for Uber drivers, which again it isn't, having to exclusively charge at public chargers is enormously inconvenient. I know this because I actually rented a Chevy Bolt through Lyft's Express Drive program and had to exclusively public charge it for the 2 weeks I had the car, and by the end of it I was ready to kill myself. I am part of the "ultra haves" of rideshare in that I am a homeowner, I have a long range Tesla, I have access to Level 2 home charging, and I still run in to difficulty running my rideshare business the way I want to.

And then there's the cultural problem with all of this. Far be it for me to tell Elon how to run his business. Looks like he's doing more than fine to me. But I don't think it can be overlooked that dumping this many Teslas into the rental market is undoubtedly going to water down the mystique, status, and exclusivity that have become associated with the Tesla brand. There is a palpable socioeconomic divide between Tesla and even other luxury brands like BMW, Audi, Mercedes, and so on. You see these brands in apartment complexes, you don't see Teslas. Part of it is that those brands have been around for a million years and depreciation has brought them down to the masses. In the aggregate, Tesla owners are college educated, higher than average earning homeowners. I don't think I'm saying anything groundbreaking here in that broke people don't own Teslas. While no data has been collected on this that I know of, I would bet my life that at least 75% of Tesla US new vehicle sales are to homeowners. The EV ownership experience basically demands that it be so. And this matters because? It matters because car buying is an emotional, ego driven purchase whether we'd like to admit it or not. A big part of the appeal of owning a Tesla has nothing to do with the blazing acceleration or using Autopilot on the 405. It is a cultural marker of status and exclusivity. Whether they would admit it or not, the appeal of owning a Tesla would drop precipitously to a significant number of owners if the brand becomes as ubiquitous as Honda or Toyota. $100k Model X guy does not want to charge next a fleet of Uber drivers. And just wait until "real" Teslas owners start having to wait in line to charge behind Uber drivers. If Tesla charging stations start becoming overrun with Ubers, the brand equity of Tesla is going to suffer. Is that super elitist? You bet. You can barbeque me all you want for saying that out loud, but it won't make it any less true. Mercedes advertises during the Masters golf tournament. They don't put up billboards in Gary, Indiana and East St. Louis. Car makers know who their buyers are. Tesla is currently seen as a luxury brand, but if they sell hundreds of thousands of cars into commercial fleet sales, the shine of owning a Tesla is going to undoubtedly lose a bit of luster.

I know that someday all of our semi trucks, busses, cabs and Ubers will be electric. Someday they won't even have drivers. And someday charging stations will be as prevalent as gas stations. While it sounds great to be moving the rideshare and livery industries towards an all electric future, I just don't see how it makes business sense for an Uber driver today.

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