The Adventures of MDawg II

Quote: MDawg

Buy in for too much cash, pay off too many markers with cash or unverifiable sources, and you may find yourself banned at MGM.

How MGM Resorts is working to prevent money laundering at its Las Vegas casinos

It’s spending more than $1 million on anti-money laundering compliance. And in the past 10 years, it has filed 46,000 suspicious-activity reports, and the company has banned more than 2,600 customers from playing, just to name a few of the changes MGM Resorts officials outlined to gaming regulators in April.


I’m a credit player and I rarely have to pay the casinos at all so I’d never get into this situation anyway, but it is a given that some caught in the over wide net are innocent.
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That LVRJ article makes no sense, and I suspect is being intentionally obfuscatory. What are they talking about, when they say "illegal bookmakers" are wagering at these casinos?

First of all, now that every male under 40 has the Draft Kings app on his phone, are there even illegal bookmakers anymore? If your action is too big for apps and websites the casino will be sending a limo right over for you. Especially in California where they say the guy is from. What would the market of an illegal bookie in CA be, outside of correctional institutions? I think they might be using this as a disparaging term and that there is some other reason why they don't like him.

Now besides that, how are casinos to police who or what someone is and where they got their money? I can walk into any casino and place a bet and no one asks me these questions. Who says people who have done bad or illegal things aren't allowed to play, and whose job is it to investigate and make a judgment? Many people of vice have gambling in their repertoire, be they drug dealer, or prostitute, or even politician. We have all sat at the gaming table with people who belong in prison but neither you nor he are doing anything wrong.

It could be a case of the casinos forgetting an old rule of management that is now frequently overlooked: never give lower class employees authority over others. By "lower class" that means what they were before they came to work for you. Sounds mean, but these are people who have been bossed around all their lives and they resent it, and this authority becomes their new toy, and they're going to use it to aggrandize themselves and crack the whip over your clientele just to show them "I am somebody now." Bad for business.

I loathe showing ID or any kind of hassling with clerks, so I am careful to keep cashouts under $3K and avoid cheques higher than $100. The exception is a certain type of machine play, where I am playing unrated and can walk away with some high value TITO vouchers, that I can do nothing with but take to the cage. I can keep those under $10K but not always under $3K, and even at that level I usually run into an amateur sleuth in the cage.

Quote: AutomaticMonkey

That LVRJ article makes no sense, and I suspect is being intentionally obfuscatory. What are they talking about, when they say "illegal bookmakers" are wagering at these casinos?

First of all, now that every male under 40 has the Draft Kings app on his phone, are there even illegal bookmakers anymore?

Yes, illegal bookies use regulated casinos all the time to offset risk.

Yes, there are still individual bookies out there. I lived in Vegas for 30 years and placed way more bets through bookies than casinos.

Quote: DRich

Quote: AutomaticMonkey

That LVRJ article makes no sense, and I suspect is being intentionally obfuscatory. What are they talking about, when they say "illegal bookmakers" are wagering at these casinos?

First of all, now that every male under 40 has the Draft Kings app on his phone, are there even illegal bookmakers anymore?

Yes, illegal bookies use regulated casinos all the time to offset risk.

Yes, there are still individual bookies out there. I lived in Vegas for 30 years and placed way more bets through bookies than casinos.
link to original post

Really! I don't know anyone who has placed a bet with an illegal bookie since the advent of online wagering. Maybe betting illegally using a website or app (because they were in a jurisdiction where it isn't permitted) but not with the kind of guy where the whole operation is illegal.

If they're using legal books to manage risk, it sounds like they're not doing it right. The whole point of making book is you get the dime vig, and if your line is so lopsided that you have to go to Caesar's to hedge it you got greedy and now you are going to have to give up some dimes. A book should strive to make all the profit on the vig alone and if they are trying to outsmart the market and win the bet too that's a different game and they're in the wrong business, they should be playing on the other side of the window.

Someone I know who basically lived in one of the Majors on the Strip was just such a bookie. Was from the midwest and friends and associates from there would place book with this bookie. Was constantly FEDEX'ing cash back and forth. I would estimate made a few grand a day doing this enough to support all the money was dumping at the tables and slots, was definitely not a winner at the casino and the casino had no idea where the cash came from, and would comp allow to stay in house for extremely long stretches.

It took me a while to figure out exactly what was going on.

As far as the MGM article in general I imagine they are concerned both with anyone buying in regularly for five or six figures cash, or paying off casino credit lines with either the same ranges of cash, or non-cash funds that they had reason to believe were of questionable origin.

Casino compliance has gotten very picky over the years and not just over cash but also over the origins of all funds - they investigate every bank account being used for payment or to support the grant of a credit line at least to the point of who is a signatory on the account and if a business account, who is the business owner (and more and more of the casinos these days are not allowing payments from business accounts, period).

I am not sure how many, if any, of the participants on these forums even have a casino credit line, let alone a large credit line, or deal with large front money deposits. I am a large credit line player, always have been, and many of my associates are large front money deposit players, so I am aware first hand of what has changed over the years and the casinos are stricter and stricter about turning a blind eye to where the money comes from.


Just giving your social security number is no longer enough.

Quote: AutomaticMonkey

A book should strive to make all the profit on the vig alone and if they are trying to outsmart the market and win the bet too that's a different game and they're in the wrong business, they should be playing on the other side of the window.
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I doubt they're trying to lay off all the action.

My friends in NY are part of a second-generation bookmaking operation. After thirty years of friendship, all I know of their operation is a phone number and an understanding that their office is near the Sunnyside Yards.
They're an incredibly tight-lipped bunch.

Quote: AutomaticMonkey

Quote: DRich

Quote: AutomaticMonkey

That LVRJ article makes no sense, and I suspect is being intentionally obfuscatory. What are they talking about, when they say "illegal bookmakers" are wagering at these casinos?

First of all, now that every male under 40 has the Draft Kings app on his phone, are there even illegal bookmakers anymore?

Yes, illegal bookies use regulated casinos all the time to offset risk.

Yes, there are still individual bookies out there. I lived in Vegas for 30 years and placed way more bets through bookies than casinos.
link to original post

Really! I don't know anyone who has placed a bet with an illegal bookie since the advent of online wagering. Maybe betting illegally using a website or app (because they were in a jurisdiction where it isn't permitted) but not with the kind of guy where the whole operation is illegal.

If they're using legal books to manage risk, it sounds like they're not doing it right. The whole point of making book is you get the dime vig, and if your line is so lopsided that you have to go to Caesar's to hedge it you got greedy and now you are going to have to give up some dimes. A book should strive to make all the profit on the vig alone and if they are trying to outsmart the market and win the bet too that's a different game and they're in the wrong business, they should be playing on the other side of the window.
link to original post

I believe once Nevada started taking mobile sports bets a few years ago that has hurt the bookie business.

If yu are a small Vegas bookie you might only be taking a $200k in bets per week. If that is the case you may not have the bankroll to take a huge bet but you also don't want your customer going somewhere else. If I go to my bookie and say I want to put $1 million on the Jaguars he may not have the resources to pay that loss. So maybe he will accept the $1 million bet nd based on his bankroll he accepts $500k of it and lays off $500k. That way he still keeps his customer happy and shares the risk.

My bookie passed away around 2020 or so. A friend of mine and I considered picking up his business because we knew a lot of his clients. I was willing to fund it all for 80% and let my friend run it for 20%. We decided it wasn't worth the hassle and risk to us for what we figured might average $5k a week of win.

It does make sense to me how or why illegal bookies might want to lay off some of their bets in casinos.

But how table game players launder money these days, I can't say. So when the casinos are cutting off some high roller who is inputting a lot of cash, I think they are more concerned about illegitimate sources for the money, than money laundering per se. When a casino receives cash these days it simply returns cash, it doesn't convert it to check, at least not knowingly, so these big players are not laundering anything.

I had a trip where the casino had somehow lost track of a mere fifteen grand of my winnings when I was cashing out for a mid six figure winning check, and it took hours of research at their end before they finally cut the check. The mistake I made that trip was playing a couple of public tables where the bets were apparently not tracked properly.

It has also gotten to where Compliance is nosing into airfare allowances, and how or why that is their purview I haven't been able to figure out yet.

Quote: MDawg

It does make sense to me how or why illegal bookies might want to lay off some of their bets in casinos.

But how table game players launder money these days, I can't say. So when the casinos are cutting off some high roller who is inputting a lot of cash, I think they are more concerned about illegitimate sources for the money, than money laundering per se. When a casino receives cash these days it simply returns cash, it doesn't convert it to check, at least not knowingly, so these big players are not laundering anything.
link to original post

I think you are correct about them worrying about the illegal source of the income and that is exactly what money laundering covers up. If I received a large amount of money illegally and I can't declare it as income, I go to the casino and gamble. Win or lose I can now tell the IRS I won the money gambling and can safely declare it on my taxes and now the money is clean.

That might work if the record of input is not the same as the record of output. Otherwise, the player would still have to explain where the cash came from in the first place, right?

So if I have say $100K from illicit activities, I have to get it into the casino's coffers without any or at least not too many over >10K CTRs or any SARs. And then when I cash it out I get just one CTR for as much of the $100K as possible (not much under $100K if I lose and minimize losses, and over $100K if I win) and I would hope no SARs.

That would explain something, but at the end of the day the guy still has a pile of cash, just maybe now has some explanation for his lifestyle if it ever comes up.

But why not just spend the cash, under $10K at a time, not like the IRS knows what sort of assets a person has anyway when it comes to those sorts of things like luxury items.
Or create some kind of business - just buy things, spending under $10K at a time and sell them, report the income.

Seems like there would be much easier ways to get cash into the stream of commerce than via a casino.

In other words, if the casinos are cutting off people with illegal sources of income, I think most of them are just going to Vegas to gamble, not to rinse their money.

Quote: MDawg

In other words, if the casinos are cutting off people with illegal sources of income, I think most of them are just going to Vegas to gamble, not to rinse their money.

You need to understand that although FINCEN tells the casinos that they need to document where the money came from, the casinos understand that they are less likely to get some of that money if they do follow through. Basically, it is bad business for them to inquire. Although the leadership tell the employees of their obligations, they really don't want them to do it. I think basically the casinos just weigh the cost of ignoring the directive against what they might win. If the win is anticipated to be larger than the penalties, it is better for their business to not follow the rules.

I don't know.
I don't know anything about Mahowny,
except if we don't get his money tonight,
then we may not get it tomorrow.

- This is the guy from Toronto
who plays flat out
and you don't know his story?

- I don't want to know his story.

- Are you saying we could be
facing a serious judgement call?

- Only if we know what we don't.

Quote: DRich

Quote: AutomaticMonkey

Quote: DRich

Quote: AutomaticMonkey

That LVRJ article makes no sense, and I suspect is being intentionally obfuscatory. What are they talking about, when they say "illegal bookmakers" are wagering at these casinos?

First of all, now that every male under 40 has the Draft Kings app on his phone, are there even illegal bookmakers anymore?

Yes, illegal bookies use regulated casinos all the time to offset risk.

Yes, there are still individual bookies out there. I lived in Vegas for 30 years and placed way more bets through bookies than casinos.
link to original post

Really! I don't know anyone who has placed a bet with an illegal bookie since the advent of online wagering. Maybe betting illegally using a website or app (because they were in a jurisdiction where it isn't permitted) but not with the kind of guy where the whole operation is illegal.

If they're using legal books to manage risk, it sounds like they're not doing it right. The whole point of making book is you get the dime vig, and if your line is so lopsided that you have to go to Caesar's to hedge it you got greedy and now you are going to have to give up some dimes. A book should strive to make all the profit on the vig alone and if they are trying to outsmart the market and win the bet too that's a different game and they're in the wrong business, they should be playing on the other side of the window.
link to original post

I believe once Nevada started taking mobile sports bets a few years ago that has hurt the bookie business.

If yu are a small Vegas bookie you might only be taking a $200k in bets per week. If that is the case you may not have the bankroll to take a huge bet but you also don't want your customer going somewhere else. If I go to my bookie and say I want to put $1 million on the Jaguars he may not have the resources to pay that loss. So maybe he will accept the $1 million bet nd based on his bankroll he accepts $500k of it and lays off $500k. That way he still keeps his customer happy and shares the risk.

My bookie passed away around 2020 or so. A friend of mine and I considered picking up his business because we knew a lot of his clients. I was willing to fund it all for 80% and let my friend run it for 20%. We decided it wasn't worth the hassle and risk to us for what we figured might average $5k a week of win.
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But now who would bet $1M with an illegal bookie? He depends on a good reputation do to business. But what if he decides it's time for a career change, and he would rather have the $2M than a reputation for being an honest bookie?

The way I learned this, you do not place bets with anyone where you are not both willing and able to do the unmentionable in order to collect. But with large enough action he can pay someone to prevent that, who is the kind of someone where I will not win. In fact for a small percentage of $2M he can pay someone to ensure that I am unable to collect or tell anyone I did not collect, and no one may be the wiser. It's true you can avoid the tax paperwork with an illegal bookie, but if he's laying it off at a casino he is going to have the tax problem eventually and that kind of attention is very serious for him, in his business.

So I just think you have to be crazy to go to an illegal bookie in the current market, for any kind of action, when you can go to any casino, guaranteed pay unless you do something stupid, get comped, and the worst thing that's going to happen to you is you have to pay tax on your net winnings.

Quote: AutomaticMonkey

Quote: DRich

Quote: AutomaticMonkey

Quote: DRich

Quote: AutomaticMonkey

That LVRJ article makes no sense, and I suspect is being intentionally obfuscatory. What are they talking about, when they say "illegal bookmakers" are wagering at these casinos?

First of all, now that every male under 40 has the Draft Kings app on his phone, are there even illegal bookmakers anymore?

Yes, illegal bookies use regulated casinos all the time to offset risk.

Yes, there are still individual bookies out there. I lived in Vegas for 30 years and placed way more bets through bookies than casinos.
link to original post

Really! I don't know anyone who has placed a bet with an illegal bookie since the advent of online wagering. Maybe betting illegally using a website or app (because they were in a jurisdiction where it isn't permitted) but not with the kind of guy where the whole operation is illegal.

If they're using legal books to manage risk, it sounds like they're not doing it right. The whole point of making book is you get the dime vig, and if your line is so lopsided that you have to go to Caesar's to hedge it you got greedy and now you are going to have to give up some dimes. A book should strive to make all the profit on the vig alone and if they are trying to outsmart the market and win the bet too that's a different game and they're in the wrong business, they should be playing on the other side of the window.
link to original post

I believe once Nevada started taking mobile sports bets a few years ago that has hurt the bookie business.

If yu are a small Vegas bookie you might only be taking a $200k in bets per week. If that is the case you may not have the bankroll to take a huge bet but you also don't want your customer going somewhere else. If I go to my bookie and say I want to put $1 million on the Jaguars he may not have the resources to pay that loss. So maybe he will accept the $1 million bet nd based on his bankroll he accepts $500k of it and lays off $500k. That way he still keeps his customer happy and shares the risk.

My bookie passed away around 2020 or so. A friend of mine and I considered picking up his business because we knew a lot of his clients. I was willing to fund it all for 80% and let my friend run it for 20%. We decided it wasn't worth the hassle and risk to us for what we figured might average $5k a week of win.
link to original post

But now who would bet $1M with an illegal bookie? He depends on a good reputation do to business. But what if he decides it's time for a career change, and he would rather have the $2M than a reputation for being an honest bookie?

The way I learned this, you do not place bets with anyone where you are not both willing and able to do the unmentionable in order to collect. But with large enough action he can pay someone to prevent that, who is the kind of someone where I will not win. In fact for a small percentage of $2M he can pay someone to ensure that I am unable to collect or tell anyone I did not collect, and no one may be the wiser. It's true you can avoid the tax paperwork with an illegal bookie, but if he's laying it off at a casino he is going to have the tax problem eventually and that kind of attention is very serious for him, in his business.

So I just think you have to be crazy to go to an illegal bookie in the current market, for any kind of action, when you can go to any casino, guaranteed pay unless you do something stupid, get comped, and the worst thing that's going to happen to you is you have to pay tax on your net winnings.
link to original post

How did the bookie turn the $1M into $2M?

Quote: unJon

Quote: AutomaticMonkey

But now who would bet $1M with an illegal bookie? He depends on a good reputation do to business. But what if he decides it's time for a career change, and he would rather have the $2M than a reputation for being an honest bookie?

The way I learned this, you do not place bets with anyone where you are not both willing and able to do the unmentionable in order to collect. But with large enough action he can pay someone to prevent that, who is the kind of someone where I will not win. In fact for a small percentage of $2M he can pay someone to ensure that I am unable to collect or tell anyone I did not collect, and no one may be the wiser. It's true you can avoid the tax paperwork with an illegal bookie, but if he's laying it off at a casino he is going to have the tax problem eventually and that kind of attention is very serious for him, in his business.

So I just think you have to be crazy to go to an illegal bookie in the current market, for any kind of action, when you can go to any casino, guaranteed pay unless you do something stupid, get comped, and the worst thing that's going to happen to you is you have to pay tax on your net winnings.
link to original post

How did the bookie turn the $1M into $2M?
link to original post

By keeping it instead of paying you what he owes you, which will be close to $2M.

Quote: AutomaticMonkey

Quote: unJon

Quote: AutomaticMonkey

But now who would bet $1M with an illegal bookie? He depends on a good reputation do to business. But what if he decides it's time for a career change, and he would rather have the $2M than a reputation for being an honest bookie?

The way I learned this, you do not place bets with anyone where you are not both willing and able to do the unmentionable in order to collect. But with large enough action he can pay someone to prevent that, who is the kind of someone where I will not win. In fact for a small percentage of $2M he can pay someone to ensure that I am unable to collect or tell anyone I did not collect, and no one may be the wiser. It's true you can avoid the tax paperwork with an illegal bookie, but if he's laying it off at a casino he is going to have the tax problem eventually and that kind of attention is very serious for him, in his business.

So I just think you have to be crazy to go to an illegal bookie in the current market, for any kind of action, when you can go to any casino, guaranteed pay unless you do something stupid, get comped, and the worst thing that's going to happen to you is you have to pay tax on your net winnings.
link to original post

How did the bookie turn the $1M into $2M?
link to original post

By keeping it instead of paying you what he owes you, which will be close to $2M.
link to original post

Normally, the Bookies are the ones getting screwd since they allow players to play on credit.

Nowadays, many so-called bookies are really just agents for online sportsbooks who take a risk on players based on referrals and reputation. The online casinos are the ones booking the bets, and the agent gets a cut based on different formulas. No one is coming to break your legs if you don't pay off your losses on credit.

Yes, there are still traditional bookies, but unless they are offering something special, I don't know why any non-AP would want to use one nowadays.

Quote: AxelWolf

No one is coming to break your legs if you don't pay off your losses on credit.
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Do online casinos offer credit?

As far as brick and mortar NV casinos, no, your legs aren't broken but you wind up in jail if you don't make good on your markers, which is even worse. You could not have missed that it's been that way for a full quarter century now.

Quote: MDawg

Quote: AxelWolf

No one is coming to break your legs if you don't pay off your losses on credit.
link to original post

Do online casinos offer credit?

As far as brick and mortar NV casinos, no, your legs aren't broken but you wind up in jail if you don't make good on your markers, which is even worse. You could not have missed that it's been that way for a full quarter century now.
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Some agents will offer credit for offshore sports books and casinos, just like bookies. Someome well-known has to vouch for you, it's not like a casino where they check your banking history. I don't think it's a common thing, but it's out there. Some poker club agents, or whatever they call them, places like GG poker, will sometimes offer credit.

Many online casinos allow you to use credit cards.

I have always declined credit, and I have only used non non-prepaid credit cards to fund online casinos a few times when necessary due to a special CC only bonus, or there were no other options.

I have a sports book/casino agent who will front me a non-casable cash balance and bonus with the expectation that I deposit within a few weeks.

Quote: AutomaticMonkey

So I just think you have to be crazy to go to an illegal bookie in the current market, for any kind of action, when you can go to any casino, guaranteed pay unless you do something stupid, get comped, and the worst thing that's going to happen to you is you have to pay tax on your net winnings.

I disagree completely. If you are a gambler that expects to welch or walk away from your debt that is absolutely where you should be betting. Every regulated sportsbook that I know requires you to pay before the bet where bookies expect you to pay after your loss.

Quote: AutomaticMonkey

How did the bookie turn the $1M into $2M?


By keeping it instead of paying you what he owes you, which will be close to $2M.

Clearly you do not understand how bookies work. You don't give them any money until after the loss.

You only have to look at the Ohtani case to see that illegal bookmaking is thriving

I'd say that Wynn and Caesars are coughing up the most retail in terms of promos. At Wynn the "Wynn dollars" are ongoing, while at Caesars you have to "opt in" to the specific promo and then sometimes play a very small amount to qualify, with hurdles that kick in extended promos.

On some of the Caesars promos you have the option between receiving retail or free play.

At Wynn they will occasionally let you know you have qualified for promo chips.

MGM has the most tournaments, play at one at a high enough level, you get into more tournaments than you'll even be able to fit in. Lately they seem to be consolidating them where you start play at one casino, and then move up to the finals at MGM Grand. Not much free play going on at MGM resorts these days.

Venetian has a fair amount of tournaments too, including a huge one coming up soon for us with $500K or higher credit lines. They are starting to do some retail promos, I recently got $10K of retail at one.

Venetian does cough up promo chips occasionally.

Resorts World has some tournaments but other than monthly food and beverage credits coming in on the national level, and free stays, nothing special, at my level I am fully RFB to the hilt no matter what anyway.

Station Casinos hand out promo chips and resort credits (may be used for retail) attached to free stays monthly.

Airfare is something that is available at all resorts, win or lose, if approached properly.


Some people with dual citizenship or even just one citizenship (if not U.S.) are able to get extended deals based on that.

Quote: DRich

Quote: AutomaticMonkey

How did the bookie turn the $1M into $2M?


By keeping it instead of paying you what he owes you, which will be close to $2M.

Clearly you do not understand how bookies work. You don't give them any money until after the loss.
link to original post

Depends on who and where. In the instances where I have done illegal betting, everything is money up front. Very low end environment where you can't assume anyone has a dollar in their pocket. The kind of guy you would bet with, I guess the standards are different.

I always assumed it worked the way depicted in Owning Mahowny. Where the bettor might even get behind and have to go on a payment plan with the bookie.

Or, The Gambler. Axel's bookie wants the cash up front because it's $45,000. (in 1974), but eventually allows him to bet without putting up anything,


When Axel loses, he has to pay up.

I've never heard of bookies collecting in advance. Their business model is based on taking people's businesses for a fraction of their worth.
You own a $300,000 a year cash business, but owe $35,000 you can't pay. They'll take an interest in your business, ruin it, walk away with a few hundred Gs, and leave you financially responsible or bankrupt. That's the fun side of the game.

I've been taking a lot of Uber and Lyft rides lately, clients are paying for it all ("I have accountants pay for it all"), and I have had quite a few conversations with drivers.

Not many of them (just 1 out of say 100) understand the cost of driving an automobile, which is, these days, conservatively speaking - $0.85 a mile. So this Uber driver getting say ten to fifteen bucks (only about a 1/3 goes to the driver, according to what they are all crying about) to drive you 20 miles is losing money. Most drivers think that if they overcome the cost of gas or electric, that is it, and they are in the green.

I suppose the exact analysis would be, that $0.85 per mile figure, less the cost of the car sitting there not driven (depreciation via time alone, not miles, plus the cost of the vehicle amortized, plus insurance). If that figure per mile works out to a profit, then driving an Uber would be profitable, but I doubt it would be.

So why are all these Uber drivers doing it? They would be better off not driving at all, and yet most of all of them think they are turning a profit.

The one driver out of a hundred who understood this said he was an engineer, and that he drove Uber rarely, mostly just did airport jaunts where he charged $75. to take someone to the airport, cash and carry, I assume by poaching Uber customers he found who needed that type of service.

"Once they have to buy new tires, get in an accident, fix their cars or decide to sell them, they understand that they have been losing money every mile they have been driving."

Basically Uber drivers are just burning down their vehicles not even in exchange for cash, because it is an inequitable burn, but rather like renting a shop and losing money on it monthly but keeping the doors open nonetheless.

Quote: MDawg

I've been taking a lot of Uber and Lyft rides lately, clients are paying for it all ("I have accountants pay for it all"), and I have had quite a few conversations with drivers.

Not many of them (just 1 out of say 100) understand the cost of driving an automobile, which is, these days, conservatively speaking - $0.85 a mile. So this Uber driver getting say ten to fifteen bucks (only about a 1/3 goes to the driver, according to what they are all crying about) to drive you 20 miles is losing money. Most drivers think that if they overcome the cost of gas or electric, that is it, and they are in the green.

I suppose the exact analysis would be, that $0.85 per mile figure, less the cost of the car sitting there not driven (depreciation via time alone, not miles, plus the cost of the vehicle amortized, plus insurance). If that figure per mile works out to a profit, then driving an Uber would be profitable, but I doubt it would be.

So why are all these Uber drivers doing it? They would be better off not driving at all, and yet most of all of them think they are turning a profit.

The one driver out of a hundred who understood this said he was an engineer, and that he drove Uber rarely, mostly just did airport jaunts where he charged $75. to take someone to the airport, cash and carry, I assume by poaching Uber customers he found who needed that type of service.

"Once they have to buy new tires, get in an accident, fix their cars or decide to sell them, they understand that they have been losing money every mile they have been driving."

Basically Uber drivers are just burning down their vehicles not even in exchange for cash, because it is an inequitable burn, but rather like renting a shop and losing money on it monthly but keeping the doors open nonetheless.
link to original post

I think your $0.85 a mile seems ridiculously high for Uber drivers driving older cars. The most common car driven for Uber is a four cylinder Toyota Camry, I would assume on average about 6 years old.

Just guesses here. Gas about $0.15 a mile. Insurance $0.10 tires $0.02, maintenance $0.10. I just think it comes out way below $0.85.

Quote: MDawg

I've been taking a lot of Uber and Lyft rides lately, clients are paying for it all ("I have accountants pay for it all"), and I have had quite a few conversations with drivers.

Not many of them (just 1 out of say 100) understand the cost of driving an automobile, which is, these days, conservatively speaking - $0.85 a mile. So this Uber driver getting say ten to fifteen bucks (only about a 1/3 goes to the driver, according to what they are all crying about) to drive you 20 miles is losing money. Most drivers think that if they overcome the cost of gas or electric, that is it, and they are in the green.

I suppose the exact analysis would be, that $0.85 per mile figure, less the cost of the car sitting there not driven (depreciation via time alone, not miles, plus the cost of the vehicle amortized, plus insurance). If that figure per mile works out to a profit, then driving an Uber would be profitable, but I doubt it would be.

So why are all these Uber drivers doing it? They would be better off not driving at all, and yet most of all of them think they are turning a profit.

The one driver out of a hundred who understood this said he was an engineer, and that he drove Uber rarely, mostly just did airport jaunts where he charged $75. to take someone to the airport, cash and carry, I assume by poaching Uber customers he found who needed that type of service.

"Once they have to buy new tires, get in an accident, fix their cars or decide to sell them, they understand that they have been losing money every mile they have been driving."

Basically Uber drivers are just burning down their vehicles not even in exchange for cash, because it is an inequitable burn, but rather like renting a shop and losing money on it monthly but keeping the doors open nonetheless.
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I had an interesting UBER ride. Was picked up early morning for my short ride to the airport from my suburban home. The guy who picked me up was in suit and tie, somewhere in his 20’s. He said he was a college grad starting his banking career, and would take one fare every morning. In Buffalo, the airport is on the way to downtown. He said he would most days take one fare from downtown to the airport after work. I have no idea how the internal machinations of UBER work, but it seemed to work out perfectly for this kid.

Quote: SOOPOO

Quote: MDawg

I've been taking a lot of Uber and Lyft rides lately, clients are paying for it all ("I have accountants pay for it all"), and I have had quite a few conversations with drivers.

Not many of them (just 1 out of say 100) understand the cost of driving an automobile, which is, these days, conservatively speaking - $0.85 a mile. So this Uber driver getting say ten to fifteen bucks (only about a 1/3 goes to the driver, according to what they are all crying about) to drive you 20 miles is losing money. Most drivers think that if they overcome the cost of gas or electric, that is it, and they are in the green.

I suppose the exact analysis would be, that $0.85 per mile figure, less the cost of the car sitting there not driven (depreciation via time alone, not miles, plus the cost of the vehicle amortized, plus insurance). If that figure per mile works out to a profit, then driving an Uber would be profitable, but I doubt it would be.

So why are all these Uber drivers doing it? They would be better off not driving at all, and yet most of all of them think they are turning a profit.

The one driver out of a hundred who understood this said he was an engineer, and that he drove Uber rarely, mostly just did airport jaunts where he charged $75. to take someone to the airport, cash and carry, I assume by poaching Uber customers he found who needed that type of service.

"Once they have to buy new tires, get in an accident, fix their cars or decide to sell them, they understand that they have been losing money every mile they have been driving."

Basically Uber drivers are just burning down their vehicles not even in exchange for cash, because it is an inequitable burn, but rather like renting a shop and losing money on it monthly but keeping the doors open nonetheless.
link to original post

I had an interesting UBER ride. Was picked up early morning for my short ride to the airport from my suburban home. The guy who picked me up was in suit and tie, somewhere in his 20’s. He said he was a college grad starting his banking career, and would take one fare every morning. In Buffalo, the airport is on the way to downtown. He said he would most days take one fare from downtown to the airport after work. I have no idea how the internal machinations of UBER work, but it seemed to work out perfectly for this kid.
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I was under the impression that Uber drivers do not know the destination until they accept the ride.

They do know where they are going, because they have the option to decline (cancel) the ride. When they cancel, the Uber rider (me) is notified.

However, if they cancel too many rides they will be called less and less often and eventually cut from the network,


which is why I'm not buying the young college grad's story, of being able to select just one ride a day that suits his own destination.

When you are riding so many Uber and Lyft rides, as I have been lately, you have almost every permutation of What If and How Does It Work conversations with the drivers.

It's gotten to where I don't want to drive anywhere, and just like to have drivers do all the work. I can see why family members have had limos and limo drivers - the real cost is the full time chauffeur though, not even the vehicle.

Between the Vegas casino limos / SUVs and Uber/Lyft I have not been behind the wheel excessively lately.

0.85 per mile is not high at all, although AAA has an average cost of 0.72 per mile based on an average $33,301. MSRP car.

https://exchange.aaa.com/automotive/aaas-your-driving-costs/

AAA has published Your Driving Costs since 1950. That year, driving a car 10,000 miles cost 9 cents a mile, and gasoline sold for 27 cents per gallon.

You may use this calculator:

https://www.aaa.com/autorepair/drivingcosts

A car like a 2024 Porsche might cost over $2. a mile to drive.

I'd say that DRich's thinking that 0.85 per mile is high, is exactly the way most of the Uber drivers think, and why they keep driving for Uber.

Quote: SOOPOO

Quote: MDawg

I've been taking a lot of Uber and Lyft rides lately, clients are paying for it all ("I have accountants pay for it all"), and I have had quite a few conversations with drivers.

Not many of them (just 1 out of say 100) understand the cost of driving an automobile, which is, these days, conservatively speaking - $0.85 a mile. So this Uber driver getting say ten to fifteen bucks (only about a 1/3 goes to the driver, according to what they are all crying about) to drive you 20 miles is losing money. Most drivers think that if they overcome the cost of gas or electric, that is it, and they are in the green.

I suppose the exact analysis would be, that $0.85 per mile figure, less the cost of the car sitting there not driven (depreciation via time alone, not miles, plus the cost of the vehicle amortized, plus insurance). If that figure per mile works out to a profit, then driving an Uber would be profitable, but I doubt it would be.

So why are all these Uber drivers doing it? They would be better off not driving at all, and yet most of all of them think they are turning a profit.

The one driver out of a hundred who understood this said he was an engineer, and that he drove Uber rarely, mostly just did airport jaunts where he charged $75. to take someone to the airport, cash and carry, I assume by poaching Uber customers he found who needed that type of service.

"Once they have to buy new tires, get in an accident, fix their cars or decide to sell them, they understand that they have been losing money every mile they have been driving."

Basically Uber drivers are just burning down their vehicles not even in exchange for cash, because it is an inequitable burn, but rather like renting a shop and losing money on it monthly but keeping the doors open nonetheless.
link to original post

I had an interesting UBER ride. Was picked up early morning for my short ride to the airport from my suburban home. The guy who picked me up was in suit and tie, somewhere in his 20’s. He said he was a college grad starting his banking career, and would take one fare every morning. In Buffalo, the airport is on the way to downtown. He said he would most days take one fare from downtown to the airport after work. I have no idea how the internal machinations of UBER work, but it seemed to work out perfectly for this kid.
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And the part he didn't mention- if he happens to not get a ride, as long as his app was on and he was willing and able to take rides, he gets the standard Federal per-mile deduction on his taxes. Being he already has a salary that is worth something.

I drove Uber & Lyft, and the way it used to be, a smart driver could game the system and treat it like a form of AP. Rides went to the closest (by time) available car and by having the rider's app on as well, you could see where the other cars in your area were and stage yourself closer to the places you wanted to do pickups than the other drivers. You get paid for both time and miles, but mostly for miles so highway rides were where you made the money.

Both companies also had a lot of promotions for drivers and they were a lot like playing a casino promotion. By reading and thinking you could figure out a way to play it optimally. I also used the destination filter a lot going to or from casinos that I was going to anyway. Real easy to get that kind of a ride, they tended to be longer rides and of course I got the tax writeoff for all the miles.

But that's almost all gone; they don't want smart drivers anymore than casino want smart players playing their promos.

From what the drivers tell me, Uber/Lyft are taking as much as 75% (leaving as little as 25% for the drivers). I understand it used to be the other way around.

It's hard to verify this online, but seems that the % Uber/Lyft take of the base fare (which does not include surcharges) isn't the full picture, such that in sum the company really does take well over half of the total amount the rider pays.

Quote: MDawg

From what the drivers tell me, Uber/Lyft are taking as much as 75% (leaving as little as 25% for the drivers). I understand it used to be the other way around.

It's hard to verify this online, but seems that the % Uber/Lyft take of the base fare (which does not include surcharges) isn't the full picture, such that in sum the company really does take well over half of the total amount the rider pays.
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My limited understanding is that it is just on the shortest of rides that the companies take more than the driver gets.