The gig economy is growing, and one gig, in particular, has become the poster child of the side hustle: driving for Uber. The rideshare giant, which allows users to call drivers with their app, claims to have 900,000 drivers in the U.S. alone and triple that number across the globe. It’s also the most popular taxi app in well over 100 different countries. With so many people flocking to download the app and sign up as drivers, a question naturally arises: how much money can you make as an Uber driver?
While the answer to this question varies widely depending on a variety of factors, one thing has become resoundingly clear in the decade since Uber was founded: driving for Uber doesn’t pay very much. In fact, the average Uber driver tends to struggle to stay above minimum wage. However, while Uber may not be an excellent long-term career option, it certainly can be a great way to generate a chunk of change in the short term.
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How Does Uber Work?
In order to properly vet the viability of an Uber paycheck, it’s important to understand what goes into being a rideshare driver in the first place. The process begins with an application. This requires a variety of documents for both yourself and your car, all of which are outlined in the next section.
Once you and your vehicle have been approved to drive, you must set up the app on your smartphone and then sign in. From there, you can set your phone in a hands-free stand and then signal that you’re online. Eventually, a rideshare will be offered to you, at which point you can choose to accept the trip and the directions will appear on the screen.
Driving for Uber allows you to create your own hours, receive weekly paychecks directly into your bank account, and have a support team always readily available to answer your questions.
Uber Driver Requirements
While the process of driving for Uber is fairly straightforward, you won’t be able to get a single ride until you’re initially approved as a driver. According to Uber’s website, the requirements for a person to drive in the U.S. include the following:
- You must meet the minimum driving age in your city.
- You must have at least one year of experience driving if you’re 23 years old or older and three years of experience if you’re under 23 years old.
- You must have a valid U.S. driver’s license and an eligible vehicle.
An “eligible vehicle” must meet a variety of factors. It needs to be from 2006 or newer, must have 4 doors and as many working seatbelts, and must be in good condition.
When applying, you’ll need:
- Your license.
- Proof of residency.
- Proof of car insurance.
- A driver photo.
After you sign up, you’ll be able to complete a driver screening online that will vet your driving record and criminal history. If you can pass this battery of simple yet important steps, you’ll be able to turn on the app and drive whenever you’d like, day or night.
How Do Uber Drivers Get Paid?
Uber drivers are paid via direct deposit once a week. There are options to receive your money more frequently, although this comes with additional fees. While the specific numbers vary, one estimate puts the average Uber driver’s hourly income at $24.77.
This number sounds impressive — until you consider the costs involved in reaching it. Along with Uber’s cut, which can be as much as a third of each trip, drivers must factor in a variety of other costs including:
- Vehicle maintenance.
- Smartphone payments.
- Tolls, licenses, or other permits that aren’t compensated.
- Additional car insurance.
If you drive for Uber as a full-time job, car payments and benefits must also be factored in. Also, your location — rural versus a city center, for instance — can affect how many rides you actually get. When all of these costs are considered, the take-home pay typically drops to around $10 per hour.
Uber Surge Pricing
Along with the basic pay, Uber also offers surge pricing. This temporarily increases the pay per trip depending on the demand in a certain area.
Heat maps in the app can show a driver where surge pricing is currently taking place, although often these disappear before a driver can relocate. Uber’s surge pricing algorithm is affected by many different factors such as time and location. For instance, a surge of riders leaving a concert all at once may cause local Uber fees to spike.
Uber did not allow tipping for several years after its inception. However, in 2017, the company incorporated a tipping option into the app. Riders can now tip you directly from their phone, although many still choose to do so with cash. This has helped to incentivize drivers to act more accommodating and professional.
UberEats Driver Pay
Along with serving as a taxi, an Uber driver can compete with GrubHub, DoorDash, and even the local pizza delivery kid by signing up for UberEats. This added function allows a driver to deliver food orders rather than passengers.
If an order comes in, an Uber driver is paid based on a pickup fee, a drop-off fee, and both the distance traveled and time spent delivering the food. Uber still takes its cut, but drivers keep all of their tips.
Once approved for Uber, you can request additional approval for UberEats without having to apply from scratch. This can expand your side hustle efforts without having to pick up an entirely different job. While UberEats doesn’t tend to pay better than normal Uber fares, it does provide another source of income if you live in an area with less overall demand.
How Much Does Uber Take?
As previously mentioned, Uber takes a significant portion of a driver’s earnings. While a specific number is nearly impossible to nail down, most averages tend to put Uber’s share at around 25% of each driver’s earnings.
This allows Uber to maintain it’s overhead, provide support for drivers, and continue to improve their technology and expand their operations.
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