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Dollars per hour or dollars per kilometre?

5 min read

Ask ten drivers how they judge an offer and you will get two answers. Half go by dollars per kilometre, half by dollars per hour, and both camps are certain the other is missing something.

They are both right, which is the useful part.

What each one is good at

Dollars per kilometre is a measure of what the driving costs you. Your fuel, your tires and most of your depreciation are consumed by distance, so a rate per kilometre tells you whether a trip pays for the wear it puts on your car.

Dollars per hour is a measure of what your time is worth. You cannot drive two trips at once, so every offer you accept spends the only genuinely limited thing you have.

What each one hides

Take two offers that both pay $24.

Judged per kilometre, B looks like five times the trip. Judged per hour they are nearly identical, and B is marginally better because it barely wears the car. Per-km alone would have you chasing distance; per-hour alone would have you indifferent to a trip that costs five times as much to drive.

This is the general shape of it:

• $/km flatters slow trips. A short crawl through downtown scores beautifully per kilometre while eating your evening.
• $/hour flatters expensive trips. A long highway run can pay well per hour while quietly spending a large amount of car.

Use both, with a floor on each. A trip has to clear your hourly floor and pay for the distance. Most bad offers fail one of the two obviously, which makes the decision quick.

The kilometres nobody pays you for

Both numbers are usually calculated on the paid trip, and both are wrong for the same reason: the job starts when you accept, not when the rider gets in.

A $24 fare over 40 km with a 12 km pickup is not $0.60/km. You are driving 52 km and being paid for 40, so your real rate is about $0.46. That pickup burns fuel and tires like any other distance, and the minutes count against your hour too.

Always work from the total distance and the total time, including getting there and any waiting once you arrive. It is a less flattering number and it is the true one.

What neither number can tell you

Even calculated properly, both rates describe the trip in isolation. The trip does not happen in isolation.

• Where it leaves you. A good fare into a quiet area can cost you the next twenty minutes finding work, or a long empty drive back. The trip after the trip is part of the trip.
• When it happens. The same offer is a different decision at 3pm and at 3am, because what you would otherwise have been doing is different.
• What it costs you specifically. Rates per kilometre mean nothing until you know your own cost per kilometre. Our guide on what a kilometre actually costs works that out with sourced figures.

A workable rule

Set two floors and check them in this order:

1. Does it clear my hourly floor on total time, including the pickup? If not, it is a no, however good the per-km rate looks.
2. Does it clear my cost per kilometre on total distance, with enough margin to be worth the wear?
3. Where does it leave me? If the first two are marginal, this decides it.

That takes about four seconds once your two numbers are memorised, which is roughly the time an offer gives you.

You can practise on real offers with the trip calculator. Driver Offer Advisor runs the same logic on every offer automatically, with your costs and your rules, and tells you which of the three tests it failed.

More guides

• Does your Uber acceptance rate actually matter? What the number really affects, what it doesn't, and why chasing it can cost you more than it earns.
• Can you be deactivated for using a driver assistant app? The difference between an app that decides for you and one that advises you, and why it matters more than any feature list.
• What a kilometre actually costs you Fuel is the part you notice. Tires, depreciation and insurance are the part that quietly decides whether a trip was worth taking.

General information for Canadian rideshare drivers, not financial, legal or tax advice. Advisory only. Not affiliated with Uber or Lyft. No earnings are guaranteed.