Deciding to drive for Uber
Generally, I will always have a side gig to help me fund my love for traveling. I enjoy driving and meeting new people. I thought Uber would be a great way to earn some flexible extra income. During Christmas 2016, I signed up to earn some extra money. After each trip, it was exciting to see just how much I made on that trip. I was hooked and kept saying “just one more trip” so I could watch my earnings increase.
Driving for Uber during my first year was actually enjoyable. I was gifted a 2005 Ford Five Hundred from my family with over 200,000 miles. Due to the mileage, I figure it was going to break down sooner or later in the next two years, so I wasn’t concerned too much about depreciation. It did indeed break down while I had an Uber passenger. He was a nice guy and actually tipped me $10.00 even though my car was on the brink of dying the whole way to his final destination.
In 2017, Uber drivers were over-abundant in Tampa, Florida. There were many days that I spent 30 minutes to an hour just sitting and waiting for a ride. Since surges were gone, there was no such thing as making 2x or 3x the rate during busy hours which is what made Uber worth it for me. I had the realization that Uber was not as great as I initially thought.
Dealing with the challenges
In 2016, I started my own company used Uber to financially get it off the ground. My passion for building my company and using Uber to finance it is what kept me driving. There’s a lengthy list of challenges with Uber, so I’ll just talk about two major ones:
most passengers made me wait between 5-15 minutes when I arrived at their location. Just waiting 5 minutes for 12 passengers a day means I worked 1 hour for free. Uber currently charges the rider after two minutes of the drivers’ arrival at 0.17 cents a minute (15 min = $2.55). It’s better than nothing, but still not great.
Drivers also lose money when riders ask if we can stop by the store so they can “run in”. Since the car is not moving we do not earn any money for mileage but the “meter” is still running for time which is at 0.08 cents a minute (15 min = $1.20). You have the option to deny their request but that will ruin your hope for a tip. I say yes to everybody but warn them that I will leave at exactly 5 minutes since we only make 0.08 cents a minute and majority understand.
Most passengers really enjoy this opportunity to get to know a complete stranger. I understand that they’re just intrigued to learn about an Uber driver’s life. I love to talk and learn about life experiences, but conversations aren’t always that great for the driver, as the first 10 minutes of every ride is repetitive. What passengers don’t realize is that they hop in the car and just start firing off the same questions as the last rider. 90% of the questions get personal quick. Most of the questions go something like:
Do you drive part time or full time?
Do you like driving for Uber?
What side of town do you live on?
Where do you work?
What’s your craziest story?
I have even been asked several times how much money I make at my full-time job and if I lease or own my car. Riders were also very disappointed when I didn’t have any bad stories to share with them. Within 3 minutes they know my name, license plate number, what side of town I live on, and where I work. Yikes! That’s a lot of personal information. It bothered me for a long time. However, I recently realized we all have different stories, and I think riders are just fascinated by Uber drivers. I had to get it out of my mind that they were not just trying to see what my personal or financial status was.
Making driving worth it
Over time I learned to turn these conversations with riders into a learning experience for me by asking them to suggest good places to visit or one of their favorite restaurants. In return, I took the time to education riders on things such as travel tips, new apps, etc. Throwing in some of my interesting and crazy life stories as a bonus surely kept them entertained. That led them to share information with me. We both walked away with new knowledge we could use and lots of laughs.
Let’s talk about earnings
Someone once told me that Uber is no more than a payday loan and now I understand why. I had a choice to either get a loan for my business or drive for Uber. I don’t have debt but the depreciation from the 16,000 miles that I put on my car still counts as a loss because I will need a new car much sooner. 16,000 may not seem like many miles but that doesn’t include the other 30,000 miles I put on my car for personal use (including 1-hour commute to work). Now we’re looking at 46,000 miles in just 1 year.
I got rid of my hunk of junk and bought a new car in January 2017 for $23,000 with a $350 a month car payment. Now you better believe I started to care about depreciation and wear & tear on my new car! At this point, I didn’t have much of a choice as I needed the money quick to financially support my business. Uber released two features that kept me driving: option to cash out at any time and the money I earned would be deposited into my checking account instantly and passengers were given the ability to tip through the app. This increased my earnings by about $10.00 – $30.00 a week on average.
How much do you actually make driving for Uber?
First, let’s look at how much Uber charges it’s riders and how much the driver actually gets to keep. Here’s a look at a 1 hour and 10 min trip.
|Base Fare $.80
$.68 cents a mile
$.08 cent a min
The Trip Details includes the information that each driver sees after each trip. But the Fare Details is the section you have drill into to see the true percentage of the amount earned.
Things break down like this:
Uber says they take a 25% of the cut and leave you with 75% but in reality check this out…
The rider paid $7.22 25% would be $1.80 so I should have made $5.42
In reality, I only kept $3.40 and Uber got $3.82 more than 50%.
What does it really cost to be a driver? Let’s Take a Closer Look At The Numbers
Here’s a look at my entire year of 2017 starting out with a brand new car. Here’s what they don’t show you:
Uber Mileage & Expenses
Uber Tax Summary
They lead me to believe that I earned 7,925.76
but wait, there’s more! We still have to add in the depreciation of the vehicle so let’s try this again.
1040 Schedule C Tax Form
Is It Really Worth It?
With Uber expenses, vehicle expenses, and vehicle depreciation of 15,584…not only did I not make money but I lost almost $4,000. So why did I continue to Uber? Honestly, I had no clue that it would be such a large financial loss. I figured I was at least making minimum wage. After crunching the numbers, though, I know this isn’t at all true. I wish I would have taken a part-time remote home job as I would have made over 10,000 and have 16,000 fewer miles on my car.
If you’re a new driver or considering driving for Uber, my hope is that you run the numbers in advance and educate yourself. If showing you my exact figures make you reconsider, I will have done my job here.