Making money and setting your hours is the dream scenario for many people. Uber seemingly made this dream a reality by letting the average Joe use their car as a taxi service.
“Driving with Uber is a great way for people to earn on their schedule,” says Meghan Joyce, Uber’s regional general manager for the U.S. and Canada. “We want everyone who drives with Uber to feel that their day truly belongs to them, whether that means working around classes, campus events, or a dinner with friends.”
While the innovative company has certainly caught the attention of many people as a potentially lucrative side hustle to pay down student loan debt or kickstart their emergency fund, many considering the gig still have some questions. How much money do Uber drivers make and is it worth it?
Here’s what you should know.
How much money do Uber drivers make?
According to Uber, drivers are free to choose how often they drive and therefore how much they make. Different cities have different per-hour averages after expenses.
“I can make $400 in one weekend,” says Althea Green of Connecticut. “But, I have made $3,000 in one month when I’m driving a lot. I actually make way more money doing Uber than at my full-time job.” In fact, the only reason Althea has another job is purely for the experience — she pays all of her expenses with Uber.
San Francisco-based college student Janessa Marquez also makes a decent hourly wage driving occasionally. “I can make anywhere between $18 to $32 [per hour], and sometimes even more, “ she says. “You do have to keep certain costs like gas in mind though.”
Costs you should consider
Though Uber offers the bonus of making your schedule and using your car to make a decent supplemental income, there are some costs to consider.
A 2016 paper by the National Bureau Of Economic Research (NBER), “An Analysis of the Labor Market for Uber’s Driver-Partners in the United States,” figured out the average hourly cost for drivers, using the average number of miles driven per hour based on Uber’s data and American Automobile Association’s (AAA) estimates. Data included driving expenses such as gas and insurance, and found that the hourly cost of being an Uber driver ranged from $2.94 per hour to $6.46 per hour, depending on the size of the car and number of hours driven.
A 2016 BuzzFeed study broke down some of those costs, taking depreciation, gas, insurance, maintenance, and miscellaneous costs into consideration. They found that drivers using a $16,000 vehicle with a 250,000-mile lifespan has a depreciation rate of 6.4 cents per mile.
Gas costs drivers about $1.75 per gallon, so a car that gets 25 miles to the gallon is looking at a gas cost of 7 cents per mile. Meanwhile, insurance, maintenance, and miscellaneous costs will add up to about $1.50 per hour based on a full-time driving schedule over 50 weeks per year. That means that the average $19.04 per-hour earnings go down to an average of $13.25 an hour after expenses.
It is also the driver’s responsibility to file taxes at the end of each year; Uber does not automatically withhold taxes from your income. If you earn $600 or more from Uber in a year, the company will use the banking and tax information on your account to send you a 1099 form by January 31. You must then file the correct taxes.
Why being an Uber driver is appealing
Flexibility still reigns supreme for the reason most people become Uber drivers. The NBER paper revealed that almost 65 percent of drivers worked a differing number of hours each week ranging between 25 percent more or 25 percent less. They also revealed that more than 50 percent of drivers used the app less than 15 hours per week — meaning Uber’s primarily for supplemental income.
Janessa says it’s the flexibility that works best for her school schedule. “You can do it [in] your spare time and make money even if you have a job or are in school like me.”
Althea adds, “Your schedule and income is totally up to you. You can say ‘I want to make this amount’ and figure out how much you need to work to earn that. I own my own home, have a car and bills, and Uber helps take care of those expenses even while I have a full-time job!”
The same NBER paper looked at the hourly earnings (before expenses) over a 16-month period and found that average hourly earnings remained stable, despite riders paying less to use Uber. Researchers also looked at the average hourly earnings for drivers across 20 U.S. cities and found there was no difference in per-hour earnings between those driving a lot of hours every week or just a few. This suggests drivers can expect income predictability and schedule flexibility, whether they live in a busy city or rural locale.
Uber in the news
While Uber has been an excellent side hustle option for people all over the world, they’ve also come under fire recently. In June 2017, Uber fired 20 employees after an independent investigation uncovered 215 claims of sexual harassment and culture-based wrongdoings. Shortly after, Uber CEO Travis Kalanick resigned.
Uber has had at least four lawsuits filed against it in the past couple of years. The lawsuits allege several Uber drivers sexually assaulted passengers. Several states — including California, Massachusetts, and Texas — investigated the billion-dollar company’s driver screening practices. Their findings reported that a thorough background check did not regularly occur.
Of course, Uber continues to maintain they are a safe service and are “dedicated to keeping people safe on the road,” according to their website. They have an entire safety page explaining how their technology enables them “to focus on rider safety before, during and after every trip” and explains how to protect yourself.
Still want to start making money as an Uber driver? Head to our side hustle marketplace for easy-to-follow instructions.
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