I’m an Uber driver, but really, I just hustle weed.
Those are the words of my good friend Jonas Ahmed, who quit his job as a restaurant manager a few years ago to become a full-time Uber and Lyft driver.
He initially started working just a few days a week for Uber in an effort to earn some extra income to help pay off his student loans. Unlike those who are demanding “loan forgiveness,” also known as “not paying your debts,” Jonas wanted to pay off his loans as soon as possible, knowing full well that debt is the biggest obstacle to wealth creation.
“At first, the money was fine,” he said. “It helped fill my tank, buy groceries, and gave me a little extra on the side. It wasn’t a career move. Just a way to get some pocket money.”
But that pocket money scenario changed rather quickly when Jonas had an epiphany.
As he explains it, a couple college freshmen got into his car one afternoon and asked if there was a dispensary on the way to their destination. They had just moved to Colorado and were eager to sample some of Colorado’s finest herb.
Being a cannabis consumer himself, Jonas offered to take them to his favorite dispensary before dropping them off at their dorm. He went in with them, introduced them to his favorite budtender, and waited patiently for them to make their purchases. Then he took them home and enjoyed a sizable tip for doing them that favor.
Later that night, Jonas went back to his dispensary to buy a gram of Sour Diesel. His budtender friend told him that the women he brought in ended up buying more than $500 worth of products. He then peeled off $50 for Jonas and told him he’d give him 10% of any sales he brought in through his riders.
The light bulb went off in a glorious fashion, and Jonas developed a brilliant plan.
A Full-Time Hustle
Jonas pulled a lot of rides from the airport, and he met all kinds of people.
College students, retired baby boomers, business travelers. And a good portion of these folks, he figured, were cannabis consumers or cannabis curious. So he started to check out all the events in Colorado that would bring in people who might want to stop by a dispensary before arriving at their destinations.
He figured out when college students would start arriving before freshman orientations.
He figured out which conferences were coming to Colorado that might bring in out-of-towners who wanted to enjoy the privilege of legally buying cannabis at a dispensary.
He even put together a database of concerts in the area that would likely attract cannabis consumers and built his work schedule around all of these events.
It’s actually quite sophisticated.
Of course, you can’t just ask riders if they want to hit a dispensary as soon as they get in the car. So what he did was put small “advertisement” in the back seat of his 2010 Toyota Prius.
Above a basket of bottled waters and small bags of chips and candy is a sign that reads:
Thanks for riding with me. Please enjoy some complimentary snacks, and let me know if there’s anything I can do to make your ride more enjoyable. Need to stop at a grocery store, drug store, or marijuana dispensary along the way? Just let me know. No extra charge, although tips are appreciated.
Although most folks won’t come out and ask a driver to stop at a dispensary, that small sign instigated more requests for dispensary stops than Jonas had ever imagined.
Today, Jonas no longer works as a restaurant manager. He’s a full-time Uber and Lyft driver that, as he puts it, “hustles weed on the side.”
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Easy Money
Jonas has built a network of dispensaries that pay him a “finder’s fee” for every sale he brings in. As well, some dispensaries give him a 1% commission on future sales from new customers. Most of the finder’s fees are between 5% and 10%, and while a 1% commission may not seem like much, it’s basically free money, he tells me. Last year, just in those 1% commissions, he pulled in about $3,000 for essentially doing nothing.
But that’s peanuts compared to what he makes on a daily basis.
Forget the money he makes from his basic fares, which, including tips, comes in at about $40K a year.
It’s his side hustle that puts the cherry on the top of the sundae.
In 2018, Jonas averaged about $150 a day from commissions, or about $36K for the year.
This year, he’s averaged $210 a day from commissions, or what should come to about $50K for the year.
If everything pencils out the way he expects, he’s going to pull in $90K in 2019. That’s some decent scratch. And up to this point, it’s been enough to pay off his student loans and allow him a few bucks to invest. And here’s where it gets interesting…
Before Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT) went public, I asked him if he was going to invest in those companies. His response:
No fu*king way!
Ouch!
Jonas is a smart guy, and he knows how to make a buck.
He loves driving for Uber and Lyft because it gives him the kind of freedom and flexibility he enjoys. He also loves cannabis, so being able to work with so many different dispensaries in Colorado gives him a certain amount of joy.
But Jonas also knows that while Uber and Lyft will never go gently into that good night, those stocks will be under significant pressure for some time.
You needn’t look any further than what’s happening right now in California with a new bill that could seriously pressure margins for both ride haling companies.
It’s called Assembly Bill 5, and after it was announced that the bill has a very good shot at becoming law, shares of Uber and Lyft tanked.
The bill is essentially designed to detail the conditions under which a worker would be considered an employee instead of an independent contractor, which is how Uber and Lyft drivers are employed now. If the state of California decides these workers are employees, Uber and Lyft will have to ensure all their drivers are paid a minimum wage, have the right to form a union, and have access to unemployment and disability insurance.
Some drivers may like this, but Uber and Lyft investors will certainly get hit hard. It should also be noted that if California backs this measure, other states will likely follow.
The bottom line is that while I absolutely love Uber and Lyft and can’t even imagine having to go back to the dark ages of life before ride hailing companies (spending a fortune on taxis and rental cars), I’ll continue to watch both of those stocks from the sidelines.
In the meantime, Uber and Lyft might want to consider running some dispensary side hustles in California to make up for all the cash they may soon have to shell out for increased taxes, wages, and insurance. After all, everyone knows that weed sells. Just ask Jonas, who, as you know, is an Uber driver, but really just hustles weed on the side.
To a new way of life and a new generation of wealth…
Jeff Siegel
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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.
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