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Are you thinking about signing up to become a Uber or lyft driver? Become you do, let’s go through the facts and statistics and see whether it is really worth is driving for Uber or lyft full-time (or even part-time).
How Uber (Or Lyft) Drivers Make Money
First, what do you need to get started driving?
There is an application you need to fill up and submit.
To sign up as a driver, you have to meet certain requirements:
- You must be at least 21 years old
- You must be licensed to drive in the US for at least one year, or three years if you’re under age 23
- You need a 4-door vehicle that is 10 years old or newer (in most cities)
- In-state auto insurance with your name on the policy
- In-state driver’s license
- In-state license plates with current registration
- You must have a social security number
- You must pass a background check and a driving record check
Once your driver application has been approved, you are set to go.
So, how do you make money with Uber or Lyft as their driver?
There is a driver’s app that you need to download.
Once you are online and in the driver’s mode, this app will start showing you ride requests that you can choose to accept or reject.
If you choose to accept the trip request, you pick up the passengers and drive them to their destination.
When the trip ends, passengers will be charged a trip fare.
According to Uber and Lyft, they take a cut of 25%.
And the driver gets paid the majority of the fare after Uber or Lyft takes its cut.
Uber Fees: How Much Does Uber Pay, Actually? (With Case Studies)
How Much Uber(Or Lyft) Drivers Really Earn
You might have seen the advertisements of Uber claiming that its driver can make $90,000 a year.
Well, we finally know if it is really too good to be true.
Although you might not be making $90,000 a year driving Uber, is it still worth it driving for Uber or lyft?
Now, let’s look at the actual pay that Uber and Lyft drivers get per ride.
To find out how much Uber and lyft drivers really make, we need to find answers to the two questions below:
- How much does the Uber ride cost?
- How much are Uber driver expenses?
First, how much does the rider gets charged for the ride?
Rider’s Fare = Booking fee + Base Rate + Rate for estimated time and distance of trip + fare surge (if there is high demand )+ tolls ( if applicable)
(Note: fare also varies, depending on the location of your trip)
For example, a rider in Las Vegas is booking a ride from Caesars Palace to Las Vegas Outlets.
The base fare is $1.57.
The cost per minute is $0.22 and the cost per mile is 0.84.
The ride is about 5.5 miles, and it takes approximately 15 minutes.
The booking fee is $3.25.
Rider’s fare: $3.25 + (0.22 x 15) + (0.84 x 5.5) + $1.57 = approximately $12
Now, we know how much the ride costs to the passenger.
How much can the driver actually earn from the ride?
For Uber, it takes a 25% cut on all fares.
By the way, the booking fee directly goes to Uber and Lyft and is not included in the driver’s fare.
So, here’s how much you get after deducting Uber’s service fees:
75% x ($12 – $3.25) = approximately $6.50
Let’s assume that you can do 3 rides per hour after factoring in all the pick-up time, dead time and drop-off.
That is about $19.50 per hour.
But, this earning is NOT your net profit because you have not taken into account of all your own expenses such as gas, car payment, car wash, car maintenance and repair, and insurance premiums.
If you are driving for Uber or Lyft full-time, you still have to pay for your own payroll tax because you are independent contractor not employees of Uber or Lyft.
So, what you are really earning is much less than that.
There’s this report from EPI which found that Uber drivers earn the equivalent of $9.21 in hourly wages.
Is It Worth Driving Uber (Or Lyft)
So, is it worth driving for Uber or lyft?
Let’s see what real-life Uber and Lyft drivers are saying about that.
And here’s how much he makes a week.
In total, he drove 11 trips on Uber and 16 trips on Lyft, for a total of 27 trips. and a total of 13.75 hours.
How much did he make?
He made $152.57 on Uber and $104.77 on Lyft for $257.34 in gross pay, which gave him an average of $18.72 per hour before expenses.
For ride-related expense (i.e. gas), he put 291.1 miles on his Prius and used about 5.75 gallons of gas, which is about $13.22 in gas expense.
For him, it’s really worth it because the hours are flexible and he made $257.34 a week in gross pay for 14 hours of simply driving around, listening to music, and talking with mostly nice strangers.
So, driving for Uber and Lyft part time seems good so far.
What about driving for Uber and Lyft full-time?
Is it worth it, too?
Let’s look at what full-time Uber and lyft drivers say.
Al Castillo, a full-time rideshare driver in New York City, works about 9 to 11 hours a day.
On a typical day, Castillo makes about $250.
So, that’s $1,500 per week and $6,000 per month if he works 6 days a week.
On top of that, he earns an additional $100 to $300 per month by using Cargo, which pays him a monthly rate for selling products like snacks and headphones to passengers, and Play Octopus, which pays him to mount a tablet that offers trivia games and plays ads.
If you add all up, that is about $75,000 a year before taxes and expense.
What about his expenses?
On average, his expenses (i.e. gas, insurance, car maintenance & repair, etc) totaled $17,000 each year.
So, his net profit is about $58,000 a year.
This still doesn’t take into account of his monthly car payment because he just bought an almost brand new $40,000 car.
Lastly, he still needs to pay taxes on his income.
Let’s not forget that in an expensive city such as NYC, Uber drivers probably make more than drivers in all the others cities.
Now, let’s look at another full-time driver’s story.
Sonam Lama, a full time driver in NYC, woke up at 3am to start driving.
He says that he is struggling to make a living and wants to stop driving for Uber.
In fact, he’s already trying to apply for a job with the New York Police Department.
So, is it really worth it to be a full-time rideshare driver? Can you really make a good living doing this full-time?
I highly doubt so.
First of all, there is a limit to how much you can earn because you can only drive for so many hours a day.
Secondly, your pay is not stable because there is no guarantee that you will make a certain amount every day while most of your expenses are fixed costs.
Thirdly, when you are working full time for Uber or Lyft, you are not considered employees but independent contractors.
In other words, you don’t get any company benefits such as 401K or healthcare benefits like when you typically get working at a full-time job elsewhere.
So, driving for Uber or Lyft might be a good side hustle to supplement your job income, but I definitely don’t recommend that people do it full-time because it’s simply just not worth your time and effort.
Good Alternatives To Make Extra Money
If you are looking for ways to make extra income, there are actually other ways that you can make good money on the side without even leaving your home.
A few years ago, both my husband and I lost our jobs unexpectedly because the company we both worked for suddenly closed down.
So, we needed to make some money quickly to help pay the bills.
After some research, I found out that the fastest way to make money was to sell services.
But, there was one problem – no sell-able skills.
Then, an idea struck me.
Why not sell other people’s skills?
Then, I noticed that there are literally hundreds of thousands of talented freelancers selling their skills online on freelance platforms such as Fiverr & Upwork.
And, a lot of them are always looking for more freelance work.
So, why not get clients for the service they offer and outsource the work to them?
And I call this ” Service Arbitrage”.
So, I started my own graphic design agency to offer graphic design services to businesses.
What I did next was that I found a group of talented freelancers online from platforms such as Fiverr, and asked them to work with me because I always have projects that I want to outsource.
The freelancers need work.
And I need talented people to deliver the work for my clients.
So, it is a win-win situation.
How I make money is that I will charge my clients at a higher rate than what I am paying my freelancers.
Want My FREE Email Course: A Step-by-Step Guide On How You Can Start A $1,000/Month Service Arbitrage Business In Your Free Time
Here are some other proven ways to earn some extra cash outside your day job either on weekends or online:
- Online Freelance Writer
- Esty Seller
- Teach English Online
11 EASY Part-Time Online Jobs (That Pay Well) In 2020
*DISCLOSURE** The numbers and figures listed in this article are meant to give a general representation of what some Uber & Lyft drivers in the industry are currently making. I am by no means claiming that you will or will not make these amounts. What you earn depends on many factors out of my control, and I cannot be held accountable for the final number you pull in.