How Much Money Can You Make As A Rideshare Driver?
Plenty of people wonder just how much they can realistically make driving for a rideshare service. Maybe you know some people who work as drivers for a rideshare, or you’ve just seen advertisements from Uber and Lyft. That curiosity is natural, even if you have a fulltime job and just want to make some extra cash on the side. After all, who can’t use some additional money to pay off debts, stash away in savings, or to secure some necessities for the household?
If you just ask around, you might find some friends, family members, and others who have opinions and might even claim special knowledge of what rideshare drivers make. It’s natural to be suspicious since plenty of people have a bone to pick with these services. They have been a threat to taxi companies for years, plus they scare people in various parts of the automotive industry. This makes getting a straight and honest answer difficult.
It’s Not So Straightforward
Anyone looking for a simple, straightforward answer to the question of how much rideshare drivers make each week, month, or year is going to be disappointed. The answer is actually pretty complicated, thanks to a number of variables which you must work out.
After all, you’re not an employee of the rideshare, so there’s no flat salary you’re paid each month. This is why plenty of people use gig jobs like driving for a rideshare service to supplement their income, instead of relying on it to pay all their bills.
What makes it really difficult to say how much money you can make as a rideshare driver is the sheer number of variables or factors which impact that figure.
Each individual will have their own set of variables they must figure out to even begin to calculate what they will make each month. That means what one person makes doesn’t equate to what everyone will make. It’s a function of your only being paid when you choose to work, among other variables.
Even for the same person, how much they earn from one month to the next can change. Of course, being more consistent in how often you provide rides for users of the service will help make your income more predictable, but there will still be higher months and lower months. It’s the nature of this kind of gig economy work.
It might take you a while to work through these different variables. Even after you do, realize you’re only going to have an estimate of how much you’ll make each month.
As is the case with any contract work, the more hours you put into driving for a rideshare, the more you make, if all the other factors listed below are the same. If you decide to work really hard and put in 60 hours a week, you’ll make far more than if driving for a rideshare is something you do in your spare time and you only do it for 10 hours a week.
Of course, not everyone has the ability or the desire to put in long hours driving strangers around to earn money. You must take into account your own availability and personal goals, financial and otherwise.
Just as they say with real estate, location is everything. Where you drive for a rideshare can have a tremendous influence on what you make. While you could change where you’re working, there are only two options for doing this. One is to drive further to another area where you might make more, but that requires more time, gas, and general wear on your car. The other is to move to a different part of the country or your province, which can be inconvenient if you’re only doing it for greater rideshare opportunities.
The fact is that rideshare drivers in large cities make more than those in suburban and rural areas. That shouldn’t be surprising for a number of factors. For one, most services cost more in cities, which makes the cut that a driver for a rideshare gets to be larger.
There’s also the fact that in dense urban areas, a driver might only go a few blocks before being pinged for another fare. In areas with not nearly as dense of a population, and where more people have access to a private car, a driver could go for a few miles before getting another paying rider. That time driving without making money is what economists call “underutilization” and it’s a way to lose money instead of making it. After all, you’re burning fuel but not getting paid during those times.
For now, only New York City in the US mandates that rideshare drivers make a minimum wage. That could become a factor in some of Canada’s larger cities, like Montreal or Toronto, sometime in the future.
Essentially, if you live in or are close enough to an urban center where a lot of people don’t have cars or are wanting the convenience of a rideshare service, you can make more as a driver. If you work in more spread-out and less populous areas, expect your pay to drop significantly.
Tipping is not a city in China, but instead it is a key factor affecting how much you make as a server in a restaurant, a bartender in a club, or a driver for a rideshare service. This didn’t used to be the case, but Uber and Lyft both decided to let riders tip drivers back in 2017. It was a key incentive to get drivers to sign up for the service, as well as encourage them to be courteous and accommodating.
Just how much rideshare drivers get tipped is a mystery, because no service publishes that information. The natural conclusion to make is if you’re super nice, do a great job, and maybe even are good at conversation with your riders, you’ll rake in some good tips each time you set out. Of course, riders in certain areas might be more generous in the tipping department than others, so it really depends on where you live. What hours you work, the parts of the city where you’re driving, and even your own personality can weigh heavily in this area. Really, there are no concrete rules for how much riders will tip, or even if they tip versus not adding anything extra to the agreed-upon fare.
If you’re ever used a service like Uber or Lyft, you probably know that a ride from point A to point B can cost considerably more at certain times or on certain days. Surge pricing is a way to get more drivers off the couch and behind the wheel when demand is high, because there’s the promise of making more during each hailed ride.
By logic, if you work during these surge pricing times in your area, you will make more income. That means if you’re not able to be driving during those peak hours, you simply won’t make as much for the same amount of time worked as those who do take advantage of surge pricing.
Every business has operating costs, or the things it needs to pay just to do business. For a store that can be rent, electricity, shelving, employee pay, and the cost of merchandise, to name a few factors.
When you’re driving for a rideshare you definitely have operating costs. Too often, people forget to factor these in when they’re calculating how much they’re making, but they absolutely have an effect since they diminish what you actually take home after each period of driving around.
First off, you need to factor in the cost of fuel. This is very much affected by the car you’re driving. If you’re in something which is more efficient, like a Toyota Prius, you won’t be stopping at the pump as much as if you’re using a Chevrolet Tahoe or Ford Expedition. Those larger SUVs and other luxurious cars which really suck down the fuel can qualify for the higher-grade ride services where the rates are higher, making it even more difficult to calculate how much you can be making in different scenarios.
There are also wearable items on your car which are affected by your driving constantly. This includes tires, brake pads, brake rotors, belts, and even wiper blades, to name a few. If you’re replacing those more often, there’s most certainly a cost involved, and that number isn’t consistent for all car makes and models.
Driving more means you’re going to be facing car repairs more often. In general, the greater the mileage on a car, the sooner certain maintenance and repair items need to be addressed. Again, just how much that costs depend on the car you’re driving.
You need to tell your car insurance provider that you’re driving for a rideshare. If you don’t and you’re involved in an accident, that information is going to come out and you might be facing some serious consequences. This fact will almost certainly increase your insurance rates, so be sure to factor that in when calculating what you’ll make. If you’re unsure what the extra would cost, your insurance provider would likely be more than willing to give you an estimate. If you find that’s too expensive, it might be time to shop around for a different insurance provider. Uber does offer a commercial insurance policy that enhances your current coverage, but it doesn’t replace it. Such a thing can be more economical, but you don’t know the details until you get quotes.
Rideshare services require you to drive a car which is below a certain age. That might mean you need a newer car, which translates into a car loan with payments. That absolutely is an expense of doing business, despite the fact you might feel you’re benefitting from driving a newer ride. There’s also the option of renting a car from some services, which of course comes with its own monthly payment.
If you’re out driving and need to get some food or something to drink, you’re not just walking over to the fridge and pulling whatever out. Instead, you’re spending money at restaurants or other businesses. It’s an expense associated with driving for the service, so it does cut into your profits. Of course, bringing snacks, drinks, or even a meal from home is a good way around part of the cost.
Sometimes you must pay for tolls or parking, so take that into consideration. This of course depends on your area and the rideshare service, so do some research to get specific answers.
Drivers often outfit their car with upgrades, which might even be required by the rideshare service. This might include a camera pointed at the driver and passengers. The rideshare can also require you to do more cosmetic maintenance to your car than you might otherwise care to perform, like repairing any dings or scratches almost immediately.
Just how much income you make as a rideshare driver depends on many different factors. While it might be pretty consistent income for some, others will find their income from this gig to swing up and down more wildly each month.
The best way to learn how much you can make doing the job is to dive in and give it a try. You need to track all your related expenses to have an accurate amount after a period of time, whether it’s a week, a month, or longer. Based on that amount, you might consider not driving anymore, doing the same amount, or even increasing how much you go out each week.
If you want financial stability, it’s best to work as a rideshare driver on the side while you keep a good fulltime job. The extra income from driving can go toward paying off debts, building savings, or whatever else you need.