Uber and Lyft are the undisputed leaders in the ride-share space. But with a regulatory dispute potentially forcing them to change or flee California — a potential harbinger of things to come — a ride-share upstart has launched to give drivers an alternative.
A company called Dumpling, which also operates in the grocery-shopping space, has launched a ride-share application that aims to allow Uber and Lyft drivers to go into business for themselves. Instead of taking a share of every ride, the site charges drivers a monthly fee. Drivers keep 97% of their earnings.
“With everything that was going on in California, we wanted to give Uber and Lyft drivers an alternative,” said Joel Shapiro, CEO of Dumpling Drive. “This is a decidedly different experience for both the rider and the driver.”
Indeed, outside of helping ride-share drivers track and bill for their work, Dumpling is little like its larger competitors. In fact, this app is more of a compliment to Uber and Lyft than a competitor.
That’s mainly because Dumpling doesn’t send you riders. It simply helps you price and bill for rides that you arrange on your own. Thus, the best way for you to launch your Dumpling Drive business is to work for other ride share companies at the same time.
How it works vs. Uber and Lyft
To understand how it works, let’s first look at how Uber and Lyft operate. With Uber and Lyft, drivers sign up, get approved and then flip on their apps when they want to make themselves available to provide a ride.
The only decision the driver makes is whether to take a fare. Everything else — finding the rider, connecting the driver, and determining both the price the rider pays and how much of the fare is passed on to the driver — is determined by the ride share company. Once any given ride is complete, the driver and rider part ways and most likely will never run into each other again.
Dumpling, on the other hand, leaves nearly everything in the hands of the driver — from finding the clients to determining pricing for the ride. When drivers sign on with this app, the program asks drivers to set their rates, including minimum fees, per-mile and per-minute charges.
When a rider wants to book a trip, he or she plugs in the start and end points and the timing of the ride. The app estimates the cost based on historic traffic patterns and the driver’s preferences. The driver can accept, reject, or ask to alter the booking.
So let’s say you’re a driver who wants to earn $30 per hour, after expenses. You might set your rates at 50 cents per minute, plus 58 cents per mile. (The IRS estimates the cost of each business mile at 57.5 cents, given the average cost of gas, depreciation, insurance, repairs, etc.) Incidentally, you can also set a minimum rate, such as $5 or $10, for each ride, so you don’t have to bother with unprofitable short trips.
What happens when someone wants to book you to drive them to the airport 30 miles away? The app plugs in your required mileage cost of $17.40 (58 cents times 30 miles). It also estimates the drive time based on how long it would typically take to get to that destination at that time of day, given historic traffic patterns. If that drive would typically take 45 minutes, the app will add in a per-minute charge of $22.50. The final cost to the rider: $39.90, which is competitive with the cost of booking the same airport trip with Uber and Lyft.
However, the Dumpling driver is not splitting that fare with a ride share company. Outside of a 3% credit card processing fee, the entire cost of the ride — plus any tip — goes directly to the driver. That nets the Dumpling driver $38.70 before any tip.
What would the driver take home with Uber? Given Uber’s driver pay formula in Los Angeles, the same ride would pay an Uber driver $27.45 — 30% less.
Dumpling does charge a $20 monthly subscription fee. Still, if you book 10 rides per month through this app, that works out to a $2 cost per ride — a fraction of what you’d pay to Uber or Lyft. The site is also giving drivers a two-month free trial, so there’s literally no cost to try out the service.
On the other hand, Dumpling isn’t going to find on-demand rides to get you a fare once you’ve dropped your other fare at the airport. So this app is better used in conjunction with other ride share apps than on its own.
Dumpling’s main shortcoming is that it doesn’t arrange on-demand rides and it doesn’t find customers for you. While theoretically one of your regular customers could ping you if they found themselves stranded somewhere, the app is focused on plan-ahead rides. More importantly, you must find your own clients.
That’s one reason why it makes sense to use Dumpling Drive as a supplement, rather than a replacement, to Uber and Lyft. This way, if you happen to hit it off with a Lyft rider, for instance, you can hand that person your Dumpling business card at the end of the ride and suggest that they call you whenever they want to schedule a trip in advance.
And, of course, you can flip on your Uber or Lyft apps when you’ve completed a Dumpling ride, so you can get on-demand work to fill your unscheduled time.
One ride-share driver in Baton Rouge says he’s used this strategy to build his Dumpling business to about $1,000 in regular rides each month. He’s still dependent on Uber and Lyft for the bulk of his income. But Dumpling is becoming a growing percentage of his business.
Finding your own clients requires the driver to market his or her services, which is unfamiliar territory for many drivers. However, this also gives the driver the ability to specialize in the type of rides he or she likes the best.
If, for instance, you like driving people to the airport, you might talk to travel agents in your neighborhood. Drop off business cards and ask that they recommend you to their clients.
Likewise, those who want to specialize in driving around elderly clients might market through senior centers. You can target business groups through a local Chamber of Commerce, and target parents through local PTA organizations, for example.
Regular client advantage
Notably, while finding your own clients may be a challenge, it also is an advantage. Uber and Lyft drivers often complain about inconsiderate riders spilling drinks in their cars or hopping in without wearing masks. They also tell horror stories about drunk partiers passing out — or tossing up — in their vehicles.
When you build your own clientele, you can simply deny rides to customers who don’t follow your rules, while encouraging customers that you like to book with you. You, after all, are in charge here. If you want to give your favorite riders a discount, that’s completely up to you.