I have been driving for Uber and Lyft for about 18 months, and I often get questions from my friends and passengers about how it works. Though I don’t do this full time, I have learned a great deal from other Uber and Lyft drivers as well. I thought I would write to you today to share what I know, and possibly inspire you to take on a “side gig” like this as well. Below is a list of pros and cons I associate with “ride sharing”.
Pro: You can make money quickly. Much like waiting tables and bartending, you can collect your payment immediately after doing even one drive. Once you complete a drive the amount of money you made shows up under the “earnings” tab on the app. For very short drives you can make as little as $2.25 in Rhode Island, but I know that drivers in Massachusetts make more. There is a $0.50 charge for every time you cash out, so I usually recommend waiting as long as possible to cash out, or even waiting for your direct deposit. When you are paid by companies like Uber or Lyft, the money is directly deposited onto your debit card. This can take a few minutes or a few days, depending on your bank.
Con: As a ride share driver, you are working in the service industry, and you will benefit from having good people skills. If you quickly grow impatient with people, you will not like this job. Personally, I like engaging in conversation with other adults, no matter what demographic they come from. This makes the job much easier for me. However, if you are not a “people person”, you will probably feel uncomfortable allowing strangers into your car. Sometimes you will find yourself waiting for an amount of time that you might find irritating. Sometimes you will find yourself in undesirable neighborhoods. Often (especially if you work at night) you will find yourself dealing with drunk people. There’s a possibility that a drunk person might throw up in your car, however as a driver you are usually reimbursed about $200 if this happens. You might even get hit on or sexually harassed. This is all part of the job, and it can be a deal-breaker. Anyone who works with the public should have a thick skin if you want to prevent burn-out.
Pro: You can make a good amount of money, depending on how, when and where you work. I have spoken to some drivers that work in Boston and make an average of $1300 a week, and some drivers who work in Rhode Island that make $650 a week, both working at least 40 hours.
Con: You will not make a lot of money during the day. To net the highest amount of cash, you have to be willing to work when most people are planning on going somewhere. This means the early morning work commute as well as the commute home. During the day the amount of rides will dip significantly, so if you were planning on making hundreds of dollars while your kids are at school, think again. In addition, late nights are when drivers make the most amount of cash. Just like a waiter or bartender, if you want to make the most amount of money you have to be willing to work at night and on the weekends. Granted, you can still make money during the day, but if you want to make the most amount of money it is best to do it on Friday and Saturday nights.
Pro: You do not have to buy additional insurance for driving with Uber or Lyft. These companies pay your insurance while you are logged into the app. If you are involved in an accident while driving for Uber or Lyft, their insurance (usually with a $1000 deductible) will cover the cost of your repairs.
Con: However, the insurance provided to drivers is not perfect. Most importantly, I have heard that Uber and Lyft do not cover you when you are logged in to the app but not doing a drive, and most auto insurance companies will not cover you while you are logged into the app at all. So this begs the question: What if I get into an accident when I am logged into the app but not doing a drive? Make sure you double check with your insurance company, as policies vary from state to state and company to company.
Pro: You can work whenever you want. This is the biggest attraction to being a driver in my opinion. You don’t have a boss and you can work whenever you have the time.
Con: You only make what you work for. There is no paid time off and no sick time. If you feel like taking the night off so you can watch football, you will not make any money that evening. You also need to find a way to pay for your own health insurance. There is a discount with a company called Stride Health that works with Uber, but it is still about $200/month for a single 40-year-old woman. You also have to claim your taxes as an independent contractor, which means you fill out a 1099 instead of a W-2. This means that your taxes are not automatically taken out of your pay.
Pro: When it is time to file your taxes, you can deduct A LOT. You are reimbursed for $0.54 for every mile you drive with companies like Uber or Lyft, and that’s just the beginning. Everything you spend money on that helps you run your ride share business is a tax deduction. This includes car washes, car chargers, and the little things you purchase to make your car more desirable for your riders. Most of the Uber drivers I have spoken to claim a very big tax return thanks to deductables.
Con: If you drive a car that is a gas guzzler, it will take you longer to net the same profit as someone who drives a hybrid. You pay for your gas yourself, and if you do mostly city driving (as most drivers do), you end up using a lot of gas. It can feel like a lot of the money you make goes towards gas, so consider this if you drive something that has low MPG. Of course, when it is time to file taxes you are reimbursed $0.54 for every mile you drive, which greatly offsets the amount you paid for gas.
I’ve shared a lot of what I have learned about driving for these companies, and I’m happy to answer any other questions that I didn’t think of here. In Rhode Island, Uber is much more popular than Lyft, though there is nothing stopping you from driving for both since you are an independant contractor. If this article has helped you decide to jump on board the ride share train, please use my referral codes below:
Thanks for reading, and happy driving!