Alto: How It Varies from Uber and Lyft

What is Alto?

Like Uber and Lyft, Alto is a ride share company. But that’s where the comparisons end.

How it works

If you want to sign up, you go to Alto’s website and essentially apply for a job.

Although the site allows you to schedule around the hours that work for you, the site hires you as an employee. You are not an independent contractor here.

Alto review

Uber and Lyft expect the people who drive for them to be independent contractors and provide their own car, pay for their own insurance, maintenance and gas without reimbursement.

Alto hires its drivers, provides them with a well-maintained car and pays the full cost of operating it.

The site also pays drivers for every hour they’re on the clock. That also differs from Uber and Lyft, which only pay drivers for “engaged time,” which essentially corresponds to when there’s a customer in the car.

And Alto drivers can accumulate paid time off and get other employee benefits, if they choose to work full-time.

This combination should make Alto a vastly more attractive option for drivers than Uber and Lyft — even if Uber and Lyft officially generate higher average hourly earnings.

The catch

But there’s one big catch. Alto makes riders believe that drivers are getting an 18% tip. They are not.

The company tells riders: “An 18% service charge is added to each ride so you can be sure your driver is always taken care of. No tipping is necessary.”

But the site’s terms say this 18% service fee supports “Alto operations, including but not limited to distributing incentive compensation to Drivers and/or other Alto personnel involved in managing and maintaining the Alto Service.”

In other words, this is not a tip that goes to the driver. It goes to the company. And tips are often a big component of ride share driver pay.

Benefits math

That said, drivers get a significant benefit from being employees and not having to shoulder the expense of gas, maintenance, insurance and repairs of their ride share vehicles.

Let’s do a little math to illustrate the point.

Just for example’s sake, let’s say the Alto driver earned $20 per hour and the Uber driver earned $30 per hour. They both drive roughly 25 miles in any given hour and are both in the 15% federal income tax bracket.

The Alto driver gets $20, put pays 15% of that in income taxes and another 7.65% in Social Security and Medicare taxes. He takes home $15.47 after tax.

The Uber driver gets $30. But he has to pay for auto insurance, gas, repairs, car washes, and other maintenance.

How much any given individual will spend on these items varies. However, the IRS estimates that the average cost of maintaining a car is 67 cents per mile in 2024. Since this driver travels 25 miles in any given hour, that amounts to $16.75. His net pay is now just $13.25.

This Uber driver only needs to pay tax on after-expense income. But because he must pay both the employer and employee share of Social Security and Medicare taxes, his net tax rate is higher. He pays 15% in income taxes and 15.3% in Social Security and Medicare taxes.

The Uber driver’s net pay is less than $10 — nearly 40% less than the Alto driver, who theoretically earned less per hour.

Poor reviews

However, where Alto got generally high marks from drivers when it first launched, recent employee reviews have turned sour.

Drivers maintain that the company has changed how shifts are assigned and it shows little regard for driver scheduling preferences. The lack of tipping is a sore point too.

Recommendations

Recent negative employee reviews have caused us to cut our rating of Alto to neutral — the same rating as Uber and Lyft. You can make more than minimum wage here. But not a lot more.

Positives, such as the employee benefits are offset by scheduling headaches and the site’s misleading service charge. We used to think Alto was a big improvement over Uber and Lyft. Now it appears to be a toss-up.

If you want to drive for Alto, you can find the site here.

If you want to make money with deliveries, check out Amazon Flex. If you have a truck, we recommend GoShare and CitizenShipper.

What their users say (from Indeed)

In the beginning of my hire, I was excited about this job. Very quickly the company began to take advantage of the drivers. No tips. Forced overtime. Lazy car washers. I’ve had to detail and clean dirty cars even though clean vehicles were available (especially during COVID). When new scheduling systems had taken effect, there was no communication of it. I had shifts just disappear.

When I first worked here, it was great! I was doing 8-10 hour shifts, they were very flexible on availability, and even had paid lunches! All of that changed in a matter of seconds with new management. They became GREEDY and were only TAKING but not giving. Started this new automated scheduling. There are no set hours, it’s all based on time blocks that are available, and the system will automatically assign you that shift. I went from 40+ hours consistently, to 28-32 hours which varies each week. You can try to get your shifts covered or traded, but if you don’t you will accumulate “disciplinary points.”

Uber was better

They are “always hiring” so if you need to know more, you really shouldn’t. I was a full time Uber driver and came to Alto to save mile’s on my car. I quit after the first 2 shifts. The pay is basically minimum wage when you factor in cost of living. Nobody can live on $12/hr. I made $12/hr in 2002. There’s ZERO tips, they encourage not tipping. Don’t expect to get your lunch on time or at all. I went back to Uber, this “job” is a joke. Just today I made in 2.5 hours what I would make all day at Alto and I can do whatever I want.

After over 6 months of working full time for them, they cut my hours to less than 16 per week because “demand was low.” After I quit, my sick time was not paid out. PTO requests were always denied. Every other week there was a new manager. There is an intentionally misleading “service charge” that leads customers to believe that is the tip, as there is no option to tip in the app.

Poor pay; no tips

Pay extremely poor. Minimum wage aside from Friday and Saturday late afternoon too evening. Only 2 days worth of working. Other days are not worth it. At the LA Depot, aside from maybe 1 person, they need to hire normal people that are considered “managers.” Pretty embarrassing who they have working there. No respect and don’t know how to speak to co workers. Hard to work with them if you can’t respect them. Don’t expect to be tipped, maybe 5 percent of rides if lucky. 0 Flexibility. Start up company that should have a new business plan and a more professional culture.

Houston drivers are paid an average of $14 per hour as long as you’re lucky enough to to get shifts paying more than $12 hourly. “Peak” hours pay either $15 or $22 hourly and encompass 8 – 10 hours per day. (They only pay $22 from 6-8pm on both Friday & Saturday night). Tips are extremely rare since Alto customers are encouraged to NOT TIP since they are charged an 18% surcharge for each trip. (The surcharge is to cover driver benefits. FT drivers are still charged for these benefits on a weekly basis & the company matches up to 4% of your contribution on their Empower 401k program)

Want to drive for Alto?

Here’s a direct link to the Alto driver site.

Updated 1/21/2024