Uber drivers offer passengers a safer way to get home after a late night out, a hassle-free way to get to the airport, and in some markets, even deliver users’ orders from restaurants or other local businesses. When you sign up as an Uber driver, you’ll be an independent contractor and will get paid weekly. Uber has played a large part in ushering in the on-demand economy, which is powered by contract workers. The model is very different from what you’re used to if you’re accustomed to being a salaried employee, and while it has a few drawbacks, driving for Uber also offers some unique opportunities. Read on to find out the top seven things you should know about becoming an Uber driver.
1. As an Uber driver, you can set your own schedule, but that’s more complicated than you might imagine
When you’re driving for Uber, you can decide when you work, where you go, and whom you pick up. But if you’re looking to maximize your earnings, you’ll need to do your research. You should avoid chasing surge pricing, and instead keep meticulous records of the best times and places to work. As explained in a helpful Rideshare Guy video, chasing surge zones is tempting, but rarely pays off, since surge zones are Uber’s strategy to redistribute available drivers. The only time it makes sense to go a surge zone is when there’s a predictable reason for the surge, like bars closing or major events ending.
One winning strategy that can help you maximize your earnings with Uber include minimizing the distance that you go between pickups. Look out for high-traffic areas near your passenger’s destination, and make a beeline for that destination to wait for your next ping. Try driving at different times of the day and night to determine when the fewest drivers are on the road, and keep track of the best times and places to drive in your city.
2. Uber’s rating systems have a surprisingly big effect on drivers
The rating system you’ve likely noticed as a passenger will become more significant when you become an Uber driver. The system is there to encourage good behavior on the part of passengers and drivers, and both parties can rate one another on a five-star scale at the end of the ride. As one driver told PBS, ratings are much more important to an Uber driver than a passenger might think, and can actually affect whether you can continue to work as an Uber driver. (Just as there are some behaviors that can get passengers kicked off Uber.)
While “a four-star review in any normal situation would seem great,” that’s not the case when it comes to the ratings your passengers leave for you as an Uber driver. “Unfortunately, a four-star review on Uber’s system is a vote to have the driver fired. Basically you’re expected to get a 4.6 average, and if you go below that, you’ll get a warning before they quickly deactivate you.” Uber also believes in the aphorism that the customer is always right. “Uber is very rider-focused just because they’re trying to grow the company,” the driver adds. “Sometimes we have to give the rider the benefit of the doubt, and they won’t come to us, the drivers, for our side of the story, for instance.”
3. You probably won’t make as much money as a driver as Uber’s advertising claims
Uber advertises that drivers can make $50,000, $75,000, or even $100,000 a year driving passengers around. But as a NerdWallet analysis showed over a year ago, you’d need to make tons of trips every week to approach those levels of earnings. And that was before Uber cut its rates. Harry Campbell reports for a blog called The Rideshare Guy that for the past two years, Uber has cut drivers’ rates in dozens of cities each January. “You will not find a driver who is making more today than they made two years ago,” Campbell writes, noting that while an Uber driver’s pay depends on the mileage rate, time, and base fare, the most recent cuts have reduced drivers’ pay by as much as 42%.
Rates aren’t likely to go back up anytime soon, since Uber’s goal isn’t to compete with taxis or Lyft, but to compete with the cost of owning a car. The company wants to make it cheaper for passengers to rely on Uber for their transportation needs than to own a car of their own, which is why it continues to lower fares despite already being significantly cheaper than a taxi. Ridester reports that in many cities, few drivers make more than $11 an hour. In some cities, like Detroit, where drivers make just 30 cents per mile, drivers could legitimately make less than minimum wage — something that Uber gets away with because many drivers don’t calculate the cost of car ownership.
4. To succeed as an Uber driver, you’re going to need to track your costs
Some drivers have reported that, if they account for wear and tear on their car, they can break even or lose money on some rides. But to figure out if a ride is worth it, you need to figure out exactly how much it costs you to own and operate your vehicle. Most drivers don’t do that, and instead just look at IRS deductions, which don’t give the whole picture. For 2016, the IRS allowed for a 54 cent per mile deduction, and in 2017, that number dropped slightly to 53.5 cents per mile. But that alone isn’t the cost of operating your vehicle. The IRS mileage rate is the deduction you will get, and if you track your income and expenses, it can save you a lot of money.
But you should also account for the cost of owning and operating your car. As Christian Perea reports for The Rideshare Guy, that cost includes not just the amount of gas used per mile, but also things like depreciation, new tires, new brakes, maintenance, insurance, state fees, car washes, financing, and more. You should figure out what your costs are, and once you have your total expenses, subtract them from the amount you made that week to find out how much you really brought in.
5. While you can lease a car through Uber, it’s not the best way to get a new vehicle
If you want to be an Uber driver full-time, you may be considering getting a new car. You can lease a car through Uber, but as Nerdwallet determined last year, you should probably steer clear of the company’s vehicle financing program. With Uber’s leasing program, drivers put $2,000 down to begin leasing a car. Uber deducts regular payments from drivers’ paychecks, which makes the program a convenient option. While thousands of Uber drivers have taken advantage of the discounts and financing that Uber has offered on new and used cars, the program really isn’t a good deal; it’s a subprime lending program that locks you into Uber, and actually costs more than a traditional lease.
If you need to get a car to drive for Uber, your best bet will usually be a used hybrid or another efficient car. If you keep the purchase price and the cost of gas down, you’ll be able to save money for the maintenance and repairs that will inevitably pop up. And again, you need to track your costs and budget for expenses to figure out how much you’re making. If you’re planning to lease or buy a car to drive for Uber, you need a tool to run the numbers on how much the cars you’re considering are going to cost you. Try using this one at ProjectionHub to figure out whether you should lease or buy a car.
6. Angry passengers are part of your job, but they don’t have to ruin your night (or your rating)
Whether they’re mad that you can’t pick them up at their preferred airport gate or upset that you won’t let them carry an open beer can into your car, there are plenty of situations in which you’ll find yourself with an angry passenger on your hands. And as you’ve already learned, the ratings that passengers leave you can have a big effect on your future as an Uber driver. So how can you make the most of the situation?
A great way is to take a page out of Uber’s book and realize that the customer is always right — even if there’s nothing you can do about the situation. If a customer is upset that they have to drag their bags to a lower level of the airport for you to pick them up, agree that it’s stupid that the airport’s policies prevent you from picking up passengers where they’d prefer. If a passenger is angry that they can’t bring an open beer into your car, or that they can’t fit six friends into your vehicle, commiserate with them that Uber’s policies (or, as the case may be, the law) are unfortunate. You won’t be able to win every time, but making the most of the situation can help you avoid low ratings.
7. Recruitment bonuses can add to your income as an Uber driver
You’ve likely heard that Uber will pay you a recruitment bonus when you get new passengers to sign up for the service. Getting new passengers to sign up helps you and all of the other drivers in your city by increasing demand for rides. So you can create business cards that include your referral code and information about Uber to hand out to potential users, who will get a discount on their first trip when they sign up.
Once you’ve printed your business cards, you can hand them out at events, give them to local businesses like hotels and conference centers, or even give them to passengers who are accompanying the user who booked the ride, but don’t have an Uber account themselves. While it takes some extra effort, securing those recruitment bonuses helps you earn extra money without spending more hours driving. You can also earn lucrative bonuses by recruiting other drivers. While that might not be your top priority if you already feel that there are too many other drivers in your city, it can definitely help your bottom line.