How Much Can You Earn Driving for Uber?
Taxi drivers around the world aren’t fond of the idea, but Uber-style ride-sharing companies appear to be here to stay. All you need to start earning money is a vehicle that meets the fairly lenient company specs and a driver’s license. The question everyone wants to be answered is how much do Uber drivers make? It’s difficult to provide a one-size-fits-all answer because Uber driver earnings can vary greatly from city-to-city and also with the particular hours and days of the week you’re available to work. Still, if you dig around online a bit there are a few studies that attempt to provide at least ballpark estimates. Let’s talk about a few of them.
Like real taxi drivers, an Uber driver needs to figure out his or her expenses because there are several items that must come out of that gross number before you can calculate what your bottom line profit is. Obviously, you should allow for oil and gas for your vehicle (‘cause Uber won’t pay for that), and the cut Uber takes for providing the software that makes this iteration of the gig economy possible.
Gas mileage can play havoc with your hourly earnings if you happen to drive a guzzler. Do the math if you don’t believe us. Forty miles per gallon versus twenty makes a huge difference. You should also know that all those extra miles you put on your vehicle come at a price that goes beyond simple fluids. Your tires will wear out faster. Repairs may become necessary sooner rather than later. The inescapable reality is that driving for Uber is a business and comes with the accompanying expenses of a business.
How Much Does Uber Pay?
An actual Uber driver and creator of the blog RideShareGuy, Harry Campbell, conducted a survey of 1,150 company drivers to try and establish how much you can make with Uber. This study questioned actual drivers from Uber and its main competitor, Lyft, to arrive at the following estimates. Keep in mind these are gross numbers and do not account for vehicle expenses.
18-30 yrs old = $17.98 hr
31-40 yrs old = $17.17
41-50 yrs old = $16.45
51-60 yrs old = $16.15
61+ yrs old = $14.57
Right off the bat, we can see that the younger drivers earn several more dollars per hour than older ones. To understand that dynamic, you should realize that Uber pays more for drivers willing to work nights, weekends, and big events like concerts or sporting events. Some of the best money (and tips) come to those not opposed to the late hours involved. You should also expect that, typically, large cities like Miami and San Francisco, where the demand for rides is higher, will end up with a better payout than smaller metropolitan areas.
Slicing Up the Uber Income Pie
Now let’s take a look at how much of a rider’s fare Uber keeps. According to a driver who divulged the details of his experience, there are two charges when it comes time for a driver to figure out whether working for Uber is a financially good deal or not.
Rider Fee: This is a flat fee that Uber charges up front. As an example, the rider fee in Los Angeles is $1.65. This amount is subtracted from the total fare.
Commission: After the rider fee is subtracted, Uber keeps 25 percent of the remaining fare. Let’s say a fare for a rider came out to be $17.65. After the rider fee, $16.00 remains. Subtract the commission from that and the driver would earn $12.00 for providing this ride. But we’re not done with the calculation yet.
Surge Pricing: During those times of peak demand we spoke about, Uber applies what is known as surge pricing, which is a natural response to supply and demand. Surge pricing merely means that the entire fare is multiplied by some factor - which changes as demand waxes and wanes. Surge pricing is a good thing for the driver since it boosts their potential hourly rate.
How Do Uber Drivers Get Paid?
The first thing to realize is that you don’t get a salary from Uber. You are not an employee. You are an independent contractor, which means you have to take care of your own taxes. This is freelancing, pure and simple. Uber is simply a service that allows you to conduct your business more efficiently than if you tried to find riders on your own.
How do you actually get your money from Uber? Driver earnings are electronically deposited into their bank account each week on either Wednesday or Thursday. Drivers can also choose to be paid almost instantly after each fare if they sign up for Instant Pay, which allows payments to be deposited onto any debit card that is associated with a traditional checking or savings account.
Driving for Uber has proven to be a popular option among drivers looking for both part and full-time work. The obvious appeal is that you can design your own schedule and are not at the beck and call of a boss. While you’re probably not going to get rich enough to challenge Bill Gates or Jeff Bezos on the list of the world’s wealthiest humans, there are plenty of examples of people being able to earn in the $15 to $20 per hour range, which is better than minimum wage in most areas. The bottom line is that how much you earn driving for Uber ultimately depends on you and your particular level of motivation.