Uber Drivers Flock to Hamptons to Gain Partygoers’ Fares

Aug. 11 (Bloomberg) -- Olivia Sterns reports on lucrative trips to the Hamptons for Uber drivers. She speaks on “Bloomberg Surveillance.” (Source: Bloomberg)

Like many New York City dwellers, Adam Cosentino’s summer ritual includes making the 100-mile trek to the beach towns of the Hamptons every weekend.

The 43-year-old isn’t making the journey to play with the rich and famous, who regularly dot the white-sand beaches, nightclubs and house parties in tony towns like East Hampton, New York, and Amagansett, New York. Cosentino, who works with mobile car-booking application Uber Technologies Inc., is instead there to profit off the Hamptons hordes as their driver.

Cosentino is part of a migration of hundreds of Uber drivers who head to Long Island’s east end from the city during the June-through-August season. They’ve helped define a new type of market for Uber called a “pop-up,” where drivers operate only during high-demand periods.

“I can make $1,000 in half the time it would take me in New York, where the summer weekends are dead,” Cosentino said of working in the Hamptons, while driving his Chrysler 300 to Sag Harbor, New York, on a recent Saturday.

Related: Lyft Drives Uber Competition With False-Order Allegations

Uber has in the past created pop-up markets to promote its service at events that draw big audiences, such as in Austin, Texas, during the annual South by Southwest Interactive conference. The Hamptons one is unique because it isn’t built around a single event like a conference and because of the length of time it operates -- a whole summer season.

Photographer: Andrew Harrer/Bloomberg News

As consumer demand has increased and more drivers have heard of the payouts from Hamptons driving, Uber has expanded its offerings there. Close

As consumer demand has increased and more drivers have heard of the payouts from... Read More

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Photographer: Andrew Harrer/Bloomberg News

As consumer demand has increased and more drivers have heard of the payouts from Hamptons driving, Uber has expanded its offerings there.

Lucrative Trips

The Hamptons pop-up lets Uber keep on serving the New York market, which is its biggest by revenue, even as residents move around. In the Long Island enclaves, the average trip is nearly three times the distance of one in New York City, the company said. A trip in Uber’s black-car service starts at $16 in the Hamptons, while a ride in an Uber sports utility vehicle starts at $25, the company said. Uber pays the $150 cost of a Hamptons car permit, while drivers own their cars and pay for gas and insurance.

Uber, which landed a $17 billion valuation in a June financing, has nurtured the Hamptons pop-up by sending e-mails to drivers informing them of the opportunity there. The San Francisco-based company added its lower-cost UberX service to the beach towns this year, compared with having just its Uber black car and sport utility vehicle services there last year. In July, Uber also offered a helicopter service from New York City to East Hampton, costing $3,000 and seating for as many as five people for Independence Day.

Photographer: Victor J. Blue/Bloomberg

For San Francisco-based Uber Technologies Inc. which recently raised $1.2 billion of investors’ financing at $17 billion valuation, New York is its biggest by revenue among the 150 cities in which it operates across 42 countries. Close

For San Francisco-based Uber Technologies Inc. which recently raised $1.2 billion of... Read More

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Photographer: Victor J. Blue/Bloomberg

For San Francisco-based Uber Technologies Inc. which recently raised $1.2 billion of investors’ financing at $17 billion valuation, New York is its biggest by revenue among the 150 cities in which it operates across 42 countries.

“Wherever you’re headed, we’ll be there to connect you with a safe and reliable ride,” Uber wrote in a blog post.

The Hamptons provides one of the most concentrated pools of wealthy passengers during the summer. Bill Clinton and Hillary Clinton have spent time in an East Hampton rental, while Goldman Sachs Group Inc. Chief Executive Officer Lloyd C. Blankfein bought a property listed for $32.5 million in the area in 2012.

$2,000 Weekends

All of that is drawing drivers like Don Banks, who’s worked for UberX for the past year in New York. He recently spent $65,000 on a new Chevy Suburban so he could ferry passengers in the Hamptons this summer.

“I bought an SUV to make more money,” said Banks, who owns a livery fleet of three cars in Westchester, New York.

Miodrag Susa, who has been driving his limousine for Uber’s black-car service for four months in New York, also started working in the Hamptons this year. He estimates he’s reaping $1,500 to $2,000 a weekend, while he would make $700 over a similar period in the city.

“I love Uber because I can be my own boss,” he said.

Yet working in the Hamptons isn’t always the most comfortable experience. Many of the drivers said they can’t find affordable places to stay in the area, so they typically commute each day of the weekend from the city to Long Island.

Night Peaks

So many Uber vehicles are now also flocking to the Hamptons that there’s too much supply, said some drivers. As a result, demand for Uber luxury cars only peaks at night when the party-going starts, said Mohamed Bhatti, who on a recent Saturday afternoon was driving his Suburban for UberX in East Hampton.

“There’s too much competition,” he said.

That’s good news for passengers whose wait times in the Hamptons for a ride is now a fraction of that for a regular taxi service, which on a Saturday night might have been as long as one hour, said John Foley, founder of Peloton Cycle, a maker of video-enabled spinning bikes with a store on East Hampton’s Main Street.

“Uber has done an amazing job in guaranteeing a high-quality service with an average wait of 4 to 5 minutes,” said Foley. He said he uses Uber when he wants to drink without worrying about driving back from gathering spots like the Crow’s Nest or the Surf Lodge in Montauk, the increasingly popular spot on the east end of Long Island.

Calm Cabbies

Taxi drivers, who have united to protest against the app from Europe to Seattle, aren’t pushing back against Uber in the Hamptons given the plethora of summer visitors.

“As long as people can afford Uber, there’s business for everybody,” said Ted Kopoulos, who owns five cabs in East Hampton. “Uber isn’t here during the week or in the winter, my business didn’t slow down.”

Working in the Hamptons is a perk for Uber’s top drivers. Only those with the highest ratings from riders -- at least a 4.7 out of 5 stars -- can operate in the area because “Uber wants to preserve its image keeping a high-standard of service,” Cosentino said.

Pink Elephant

Cosentino said he started working for Uber in 2012 to pay for a business degree after being honorably discharged from the U.S. Army because of an injury he suffered in Afghanistan. In a good week, he can make as much as $3,000, he said.

The Hamptons hit his radar screen this summer after Uber, which last year demoted his Chrysler 300 from the black-car service to its cheaper UberX service, opened the market to its lower priced rides. Cosentino said he usually drives to Bridgehampton, New York, on Friday afternoons because that’s the area he knows the best -- and because cellular network reception is poor elsewhere.

A typical Hamptons work night involves spending the evening driving patrons to East Hampton’s Pink Elephant or Southampton’s 1 Oak, he said. While the clients tend to be younger than the typical professionals he has in Manhattan, they are similarly well mannered, he said.

Cosentino adds that he doesn’t think there are too many Uber drivers competing for the youthful beachgoers.

“Demand is endless,” he said.

(An earlier version of the story corrected Montauk’s location in 17th paragraph.)

To contact the reporter on this story: Serena Saitto in New York at ssaitto@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Reed Stevenson

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