Should you become an Uber or Lyft driver and are you missing out?
Passenger fares have never been lower, but the jury is still out on whether the ride-sharing gig is worthwhile for its drivers. We’re going to cover not only how to get in on the ride-share driving business, but how much you can expect to earn as well.
Explore this Guide:
- How to Become an Uber Driver
- How to Become an Uber Eats Driver
- How to Become a Lyft Driver
- How to Become a Driver without a Car
- How Much Uber Drivers Make
- How Much Lyft Drivers Make
- Average Earnings by City
- Average Earnings by Vehicle Class
- The Cons of Being an Uber or Lyft Driver
Ride-sharing services are one of the fastest growing companies of our time. Ride-sharing apps appeal to potential drivers because they can come from all walks of life, they can be self-employed, and they get to be in control of their own hours. For passengers the appeal of ride-sharing services is the convenience of hailing and paying for their ride all on their phone.
Ride-hailing companies have really grown into a giant business—Uber alone exists in 63 different countries and is operating in over 700 cities. They’ve also recently broadened their platform to include not just car services but bikes, scooters, food delivery, and even freight. In the future they also hope to add air taxis and driverless cars to their many services.
Needless to say, the ride-sharing app business is growing and here to stay.
You’re probably wondering now how you can get in on this flexible form of self-employment and never answer to a boss again! But before you download the app, quit your job, and hop in your car, hear us out, because becoming a driver for a ride-share business may not pay as well as you’d think.
How to Become an Uber Driver
First, to become an Uber driver you must meet the following requirements:
- Meet the minimum age to drive in your city
- Have at least one year of licensed driving experience in the US (3 years if you are under 23 years old)
- Have a valid US driver’s license
- Meet vehicle requirements (an eligible 4-door vehicle)
Second, if you meet these requirements then you share the following documents:
- A valid US driver’s license
- Proof of residency in your city, state, or province
- Proof of vehicle insurance if you plan to drive your own car
- A driver profile photo
- Must be a forward-facing, centered photo including the driver’s full face and top of shoulders, with no sunglasses
- Must be a photo only of the driver with no other subject in the frame, well-lit, and in focus; it cannot be a driver’s license photo or other printed photograph
Third, you complete an online screening that reviews your driving record and criminal history. And that’s it! After your application is accepted you can download the uber app and start taking rides.
How to Become an Uber Eats Driver
Uber Eats is a delivery partner that has teamed up with many restaurants that don’t typically have their own delivery services. As an Uber Eats driver you deliver food orders made via the Uber Eats app. Becoming an Uber Eats driver is similar to signing up to become a driver. Once you sign up to be an Uber driver, upload the required documents, and complete the online screening you simply do the following to start receiving delivery requests:
- Go to your account
- Select vehicle options
- Accept delivery terms
However, when delivering for Uber eats you can also use a scooter or bike instead of a car. In order to drive either of these options for your deliveries you have to meet the following requirements.
How to Become a Lyft Driver
Uber’s rival Lyft is a newer ride-hailing company out on the roads right now. To become a Lyft driver you can visit the Lyft website to fill out their application and start their process. You’ll basically have to do the following:
- Fill out the application
- Vehicle Inspection
- Background check
- Meet the requirements of your city
How to Become a Driver without a Car
At this point you may be wondering, but how do I become an uber driver without a car? How do I become a lyft driver without a car? If you don’t have your own car to drive with, Uber has partners that can rent a car to drive with. Lyft has something similar with Lyft Express Drive. With this you can use a rental car and return it at any time, with things like insurance and standard maintenance included in the rental price.
How Much Money Do Drivers Actually Make?
How much you can really make as an Uber driver is riddled with caveats. Yes, you can earn good money from driving during surge hours and getting tips from your passengers, but then other things, like all the costs that go into having and running a vehicle, will dent your earnings. Because ride-share drivers are technically self-employed they have to take on all the costs necessary to run their business, and this is where ride-share drivers experience major disappointments in their earnings with apps like Uber.
How Much Uber Drivers Make
There are many people out there that would love a lucrative way to be self-employed, and there are many aspects of businesses like Uber and Lyft that draw in new drivers every year. There are estimated to be about 833,000 Uber driver participants in just one year. Uber has also said that their drivers can earn $75,000 to $90,000 a year, while the typical taxi driver only makes about $30,000 a year.
If these numbers were true to what most drivers are actually making then why would almost half of all drivers only stay in the business for less than a year before dropping out of the game? It is because most Uber drivers don’t end up seeing earnings this high.
In reality Uber drivers make an average of $15.68 per hour, which means Uber drivers make about $7.84 per ride, and about $109.76 per week if they work all 7 days. Surveys done by Earnest have also found that Uber drivers make $364 per month on average, which would mean that Uber drivers make an average of $4,368 per year. Uber does give drivers the ability to earn extra with surge pricing. This is when passengers fees go up during higher density hours.
How Much Lyft Drivers Make
Lyft drivers make pretty similar numbers but the difference might be just enough to make you switch apps. Lyft drivers make an average of $17.50 per hour. This means that on average they make about $8.75 per ride, and about $122.50 per week if they work every day. Earnest also found that Lyft drivers tend to make an average of $377 per month, which would mean that Lyft drivers make an average of $4,524 per year.
Average Earnings by City
Not all cities are created equal when it comes to the demand for ride-hailing services. How much work you can get and how much you’ll get paid on average will depending on what city you work in. But remember, many of the best cities to work in for ride-share drivers are also more expensive cities to live in, and a higher cost of living will affect your earnings as well.
The 10 BEST cities for ride-share drivers are . . .
- Honolulu, Hawaii at $25.55 an hour
- Seattle, Washington
- Long Island, New York
- Pittsburg, Pennsylvania
- Westchester County, New York
- San Jose, California
- New York City
- Minneapolis, Montana
- San Francisco, California
- Cincinnati, Ohio at $19.18 an hour
The 10 WORST cities for ride-share drivers are . . .
- Buffalo, New York at $9.74 an hour
- San Antonio, Texas
- Tulsa, Oklahoma
- Oklahoma, Oklahoma
- Indianapolis, Indiana
- Tampa/St Petersburg, Florida
- Springfield, Missouri
- Houston, Texas
- Raleigh/Durham, North Carolina
- Akron, Ohio at $4.94 an hour
As you can see, drivers in some of the bottom tier cities aren’t even making minimum wage.
Average Earnings by Vehicle Class
If you were wondering how much drivers tend to make according to their vehicle class we found that information too. Overall they found that most drivers make the following according to what class of vehicle they’re driving:
- UberX = $13.70 an hour
- UberXL = $14.84 an hour
- UberSELECT = $14.85 an hour
- UberBLACK = $24.87 an hour
It would then seem like the higher class your vehicle is the better you’ll get paid, but you have to remember that you are the one paying for the more luxurious car. Passengers also pay more to ride in the higher-end vehicle types, which will affect how much demand there is each day for the vehicle class you offer.
The Cons of Being an Uber or Lyft Driver
There are actually many reasons these promising numbers don’t become a reality for most Uber drivers. First of all, there is the nature of how Uber drivers are employed (or technically not employed) which affects their pay and benefits (or the lack thereof). Then there are the many other costs that fall on the driver to pay and manage on their own. Finally there is the matter of location that dictates how much work is even available in a driver’s area.
Drivers are considered independent contractors, which means that they technically are self-employed. Sounds great right? Who doesn’t want to be their own boss? But there are a number of disadvantages to being self-employed.
Since drivers are independent contractors they have to take care of their own benefits, like insurance, and they are also in charge of all the costs of maintaining their vehicle. Below are some other cons to being an independent contractor for Uber:
- Because you aren’t a W-2 employee, Uber is not required by any laws to pay its drivers minimum wage.
- Because you aren’t a W-2 employee, you have to cover your own Social Security and Medicare taxes. Officially employed W-2 workers will typically only pay part of these taxes with each paycheck, while their employer pays the rest.
- You are considered self-employed, but you still work for a business that will control and regulate aspects of your “self-employment” and control the percentage you get paid.
Demands on Your Own Pocket
Because you are only getting a percentage of your earnings, while the ride-sharing company takes the rest, this makes the personal costs of running your driving business all the more impactful on your wallet.
Instead of all the proceeds of your business going to you and your business, the ride-share app companies take a cut, and they get to decide how big a cut they get. Below are just a few examples of all the costs you have to pay out of your own pocket to run your driving business:
Not only do you have to pay for your own health insurance—since ride-share companies won’t consider you an employee and provide any benefits—but you also have to pay for your own car insurance.
Ride-share companies won’t provide you with a vehicle the way that other taxi companies do for their employees. Providing yourself with a vehicle to drive and work in is also all on you.
Any maintenance, repairs, and general upkeep that your vehicle will need in order for you to drive is completely your own responsibility. And since you are driving your vehicle for your work it is going to need much more regular maintenance.
You are not reimbursed for what you spend on gas. Business insider found that drivers can spend up to $150 on gas just in a week, and the more you work, the more you’ll be spending on gas each week.
If you drive through any tolls your passenger will likely pay an added amount on their fare, but you will be responsible for taking care of the toll fee upfront.
A recent study was done by the Bureau of Labor Statistics in May 2018 and they found that ride-share drivers may not be any better off than taxi drivers. They found that self-employed drivers only made up 35% of the driving business, and at an average $14 an hour they’re not even making a taxi driver’s salary of $30,000 a year. Because of this it seems ride-share driving truly does belong in the gig economy as more of a part-time job for extra cash, than a full-time occupation.
If working for yourself means a lot to you and the projected numbers we’ve outlined don’t look that bad, then maybe ride-share driving is still the gig for you. You can also always take advantage of Check City Title Loans to help your car stay in business. But it may also be a side gig that needs some revamping by those in charge in order to be made truly worth-while for the drivers once again.
US Bureau of Labor Statistics. “Taxi Drivers and Chauffeurs.”
Technology Policy Institute: Studying the Global Information Economy. “The Competitive Effects of the Sharing Economy: How is Uber Changing Taxis?”
Economy Policy Institute. “Uber and the labor market Uber drivers’ compensation, wages, and the scale of Uber and the gig economy.”
New York Times. “With Uber’s I.P.O., Dara Khosrowshahi Is Taking Travis Kalanick’s Company Public.”