Uber Driver Secrets: 7 Things to Know Before Working for Uber
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 a high-traffic area near your passenger’s destination, and make a beeline for that area 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.)
PBS reports that though “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,” a driver tells PBS. “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
In the past, Uber has advertised that drivers can make $50,000, $75,000, or even $100,000 a year driving passengers around. But as a NerdWallet analysis showed even back in 2015, 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 reported for The Rideshare Guy that in 2015 and 2016, Uber 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 wrote at the time. Uber has continued updating its rates in 2017 and 2018, with The Rideshare Guy reporting mid-2018 that Uber was increasing time rates but decreasing distance rates, likely keeping affected drivers’ overall earnings the same.
Ridester reports that when you ask Uber drivers across the U.S. how much they make, you find hourly earnings that are “amazingly low,” topping out at $25 per hour in the most lucrative cities and falling as low as $5 in the worst cities. The publication notes that “Many of these rates are below minimum wage, especially after you factor in car costs and other driving-related expenses.” Uber only gets away with it because many drivers don’t calculate the cost of car ownership. Ridester notes that many Uber drivers may even be “losing money every hour they drive.”
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. In 2018, the IRS allowed for a 54.5 cent per mile deduction, up from 53.5 centers in 2017. 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. Uber drivers used to be able to lease a car through Uber, but you have better options for getting a new vehicle
If you want to be an Uber driver full-time, you may be considering getting a new car. A now-defunct program enabled drivers to lease a car through Uber. But as Nerdwallet determined, the program was a risky proposition. It was a subprime lending program that locked you into Uber. And it actually cost more than a traditional lease. In fact, the program’s flaws made it obvious what you should avoid if you need to get a new vehicle to work as an Uber driver.
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. If you’re planning to lease or buy a car to drive for Uber, you need to run the numbers on how much the cars you’re considering are going to cost you. Try using this tool 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. 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 dumb 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, commiserate with them over Uber’s policies (or the law). 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 distribute them to passengers who accompany the user who booked the ride. 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.
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