Content of the material
- Have merch on hand for higher tips
- How Much Does Uber Take From Your Pay?
- What Affects How Much You Can Earn by Driving for Uber?
- How Far You Drive Per Ride
- Where You’re Driving
- What Service Tier You Work In
- Surge Pricing
- How Often Does Uber Pay You?
- How to Make More Money on Uber
- Take Advantage of Every Surge Period
- Save on Personal Expenses with Uber Partners
- Earn Tips from Happy Customers
- Stay in the City Center
- Download the Passenger App
- Uber’s Pay Structure
- Qualifying Earnings
- What Is a Base Fare?
- Does Surge Pricing Affect Drivers?
- Cancellation Fees
- A Shortage of Uber Drivers
- Good To Know
- The Pros and Cons of Working on Uber
- Pros of Working on Uber
- Cons of Working on Uber
- Join Us
- What Taxes Do Uber Drivers Need to Pay?
- Quarterly Estimated Tax Payments
- Self-Employment Taxes
- How Much Are Uber Driver Expenses?
- Frequently Asked Questions
- So How Much Do Uber Drivers Actually Make?
Have merch on hand for higher tips
Wouldn’t it be nice if you could earn the same mark-ups you have to pay for a bag of chips at the convenience store? Well, that’s totally possible. You can sell all kinds of items (with a fair markup) right from your car.
Who doesn’t want to avoid those nuisance requests like, “Can we stop so I can buy a snack from the corner bodega? I’ll be right back…” Just pull out your stash of merch and munchies, let them buy what they need, and keep your driving gig moving along.
Here are some ideas for items you can sell to your customers:
- Disposable phone chargers (to keep them juiced even after they leave your vehicle)
- Candy bars
- Chewing gum
- Rain ponchos
- Small umbrellas
- Clear bags (for large events)
- Energy boosters
As a reseller, you’ll have to check with your state department of revenue and inquire about how to handle sales tax.
Key takeaway: If you’re resourceful, you can make more than a few extra dollars selling items customers need right from your car.
How Much Does Uber Take From Your Pay?
Drivers don’t get to keep all of the money a rider pays. Uber takes 100% of riders’ booking fees. Then, Uber takes a 25% cut from each fare. Drivers keep 100% of tips and bonuses. In the Uber driver app, you can exactly how much you’re earning vs. what Uber’s earning.
What Affects How Much You Can Earn by Driving for Uber?
Signing up for Uber doesn’t guarantee you the average 2020 wage of $17.21 to $19.89 per hour. How much you earn depends on the following:
How Far You Drive Per Ride
Part of your fare earnings is based on how many miles you’re driving and how long you’re driving. Longer trips bring in a bigger fare.
Where You’re Driving
Drivers earn different amounts based on where they’re driving. For example, if you drive in big cities or do airport runs, you can expect to make more than a driver working in a smaller suburb.
What Service Tier You Work In
Uber offers many service tiers. Not every tier is available in every location. Drivers with nicer cars that can hold more people enjoy higher rates than drivers who participate in UberX, which is the cheapest service tier for riders.
- UberX: most affordable rates for 1 to 3 people
- UberXL: affordable rides for groups up to 5
- Uber Select: stylish rides for 1 to 4 people with highly-rated drivers
- Uber Comfort: newer cars with more legroom
- Uber Pool: shared rides, discounted rate per rider
- Uber Black: premium rides in luxury cars
- Uber Black SUV: premium rides for 6 in luxury cars
- Uber LUX: top-rated drivers in luxury vehicles
- Uber WAV: wheel-chair accessible vehicles
- Uber Green: sustainable rides in electric vehicles
- Uber Taxi: local taxi cabs
Uber uses an algorithm to detect rider demand and driver availability. When rider demand is high and driver availability is low, Surge Pricing goes into effect to incentivize drivers to give rides. Drivers earn the normal rate for rides multiplied by a surge price multiplier.
During times of Surge Pricing, drivers see what the multiplier is in the app. For example, when SURGE is at 2.5x, a ride that’s normally $10 would be $25.
As noted above, tips added an average of $1.31 per hour to a driver’s 2020 hourly wage. Being more personable and supplying extras like mints or tissues are ways Uber drivers can increase their chances of getting tips.
How Often Does Uber Pay You?
As an Uber driver, you may have irregular hours but don’t let that keep you from viewing the job as a stable income. Uber will provide you with a regular paycheck. As an Uber driver, you’re paid weekly on a regular schedule.
Fares are deposited directly into your bank account. Uber’s pay periods begin on Monday at 4 a.m. and end the following Monday at 3:59 a.m. Emails will be sent to you that link to your pay statement. Pay statements are also visible in your “partner dashboard,’” which you can google to find. Every Thursday, Uber will direct deposit your pay into your bank account. However, be sure to enter your bank information at vault.uber.com.
If this doesn’t sound fast enough to you, there’s another option. Uber offers instant pay to their drivers. This lets you transfer your pay whenever you need to. Instant pay can be used up to five times per day. However, you will need a debit card in order to access it. You can use your personal debit card for $.50 per cash out. Or you can also use an Uber debit card from GoBank for $0 per cash out. Each time you transfer money your weekly pay statement will say “instant payouts.”
However, when considering instant pay, you will need to look into your bank’s procedures. Certain banks will take a few business days to transfer your money. Some of these banks include:
- H&R Block
- First Citizens Bank
- Amegy Bank of Texas
- California Bank and Trust
- First National Bank of Omaha
- Webster Bank
- Silicon Valley Bank
- Northern Trust
- Bank of New York Mellon
How to Make More Money on Uber
Now that you know how to start working on the Uber platform, you can make additional income and increase your median income by having a good driving strategy. Here are some tips on making more money on Uber.
Take Advantage of Every Surge Period
When there is an increase in demand for drivers, the fare price and booking fee rise significantly above standard trip fees. The Uber app notifies you when there is surge pricing in specific areas, which you can use to boost your total earnings. While surge prices or amounts can be unpredictable, you can predict busy times to some extent and plan your schedule around these surge periods.
Save on Personal Expenses with Uber Partners
Uber has several partnership programs that help drivers save money on driver expenses. One of such programs is Uber Pro. Uber Pro is a loyalty reward program that helps you earn more money by saving up to 25 percent on vehicle maintenance.
Some drivers in this program may also enjoy 100 percent tuition payment at Arizona State University ASU online. If you qualify but do not want to attend school, a family member may use the benefit. To enjoy Uber Pro benefits, you must drive frequently and provide excellent services to your riders in order to accumulate points over time.
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Earn Tips from Happy Customers
If you are an Uber Eats driver, you can make extra income from tipping. Uber doesn’t deduct any service fee from your tips. It is important to note that these tips are not mandatory, so you should not pressure your clients to tip you. All delivery drivers need to do is provide exceptional service. When the client is asked to leave a review, they will have the option to tip the driver.
Stay in the City Center
Driving without passengers will only cost you money in the long run. The same can be said about working in the suburbs. Even if you live in the suburbs, you should go to the city center in the morning and work there until you are ready to return home. You will find the most riders in city centers.
Download the Passenger App
To optimize the experience and earn more money, you should download the Uber passenger app. The app has features that aren’t available on the driver app. One powerful feature is the location of drivers. Passengers can see the locations with the highest number of drivers. You can use this and other trip details to your advantage.
Uber’s Pay Structure
Uber’s pay structure is dynamic and flexible. It is calculated according to location, time of day and frequency of work. Pay may vary on a day-to-day basis.
Uber provides “earnings estimates” instead of a set wage to help drivers identify their likely profits. These should be viewed strictly as projections. They are based on what other drivers working the same hours in the same location earned over the previous month.
Uber drivers earn from a combination of factors including customer tips and trip fares. Occasionally things like Quest promotions may lead to additional earnings.
What Is a Base Fare?
The base fare is the flat rate that a pick-up pays. Time and distance increase the trip fare.
Does Surge Pricing Affect Drivers?
Uber uses surge pricing when demand is high, increasing the costs of rides. Uber drivers can use a local map to find surge prices and time their availability. This can increase earnings.
Make Your Money Work Better for You
Drivers are protected if a ride is canceled while they are en route to pick-up. They will receive a cancellation fee.
A Shortage of Uber Drivers
Recent increases in gas prices have led to a shortage of Uber drivers, which may bode well for those looking to pick up some rideshare gig work. Here, again, understanding the fine print and variables is important.
Fewer drivers result in increased costs for riders. As more people are looking to get back on the road as COVID-19 restrictions ease, they’re finding wait times and prices that reflect the shortage of drivers.
In April of 2021, Uber developed an incentive program number of $250 million to get drivers back on the app. It also started charging riders fuel surcharges to help drivers cope with the increasing gas prices of 2022. This, combined with increased fares due to scarcity, means drivers are seeing better financial opportunities than before. In large cities like New York, Philadelphia and Chicago, drivers are making over $30 per hour.
However, this temporary demand imbalance combined with Uber’s dynamic pricing structure suggests this pay increase is likely an unusual exception, not the rule. Those signing up as drivers now can make good money, but they should do so with an end date in mind.
Good To Know
The average car insurance will not cover a vehicle used for rideshare work. Uber provides insurance that covers drivers while they are waiting for a request, en route to pick-up or during a ride. To protect yourself when you use your vehicle for Uber, be sure to sign up for a rideshare auto insurance policy.
The Pros and Cons of Working on Uber
Like every other business model, working as an Uber driver has benefits and drawbacks. Weighing these pros and cons will help you decide whether a full-time job as an Uber driver is the best option for you.
Pros of Working on Uber
- Flexibility to work when you want. Uber is one of the most flexible rideshare companies you will find today. All you have to do is change your status on the app to “Available”, and you can begin accepting rides. When you want to rest or do something else, simply change your status to “Unavailable”, and you will not receive rides. You can work flexible hours as long as you own the vehicle.
- Get paid each time you drive.You do not need to wait till the end of the month or week to get paid for the rides you complete. Uber drivers are paid instantly, allowing you to drive people whenever you need money. Furthermore, the charges per ride rise significantly during peak hours, allowing you to earn even more.
- Earn bonuses for putting in the work.Uber offers bonuses to drivers at intervals. These bonuses serve as incentives for drivers to work hard and reward those who put in a lot of hours.
- You don’t need to own a car. While most Uber drivers use cars, you don’t always need a car to make money on Uber. For example, people can use motorcycles, bicycles, and even scooters to make money on Uber delivery services like the Uber Eats platform. You can also work for someone who owns a car and pay a set amount each week.
- You can work anywhere. You can work as a driver as long as the Uber app is available in the city you are in. So, if you want to relocate, you don’t have to worry about finding a new job. You’re able to drive as long as your app is operational and you’re driving the same registered vehicle.
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Cons of Working on Uber
- You have to pay double insurance. Uber is not responsible for providing drivers with rideshare insurance premiums. However, they make it mandatory and deduct it automatically from your hourly income. This means you’ll have to pay your regular car insurance as well as rideshare insurance every month, regardless of how much you make.
- The cost of doing business is on you. Whether you are the car owner or you are leasing the vehicle, you will have to pay for maintenance costs, repair costs, income tax, sales tax, and the cost of gas. Individual drivers cover the entire operational cost that comes from working with Uber. This may significantly affect the total amount you make monthly and make it difficult to work with a budget.
- Driving for Uber doesn’t mean you are an Uber employee. Using the Uber app to make money doesn’t mean you are an Uber employee. You will be an independent contractor. As a result, you should not expect to receive the traditional benefits that come with working for Uber as a part-time or full-time employee. If you want to enjoy these privileges, you will need to learn how to become a software engineer or an Uber data scientist or
- There are no clear-cut terms. Uber has different terms and conditions in different countries, and they are not always favorable. For example, the terms in the United States are completely different and more favorable than the terms for drivers in developing countries like Nigeria. A typical example is the difference in hourly income and subsequently annual earnings.
- It is not as flexible as you would expect. While you have a high degree of flexibility when you’re working as an Uber driver, you are obligated to accept almost every ride you get. It makes no difference if you are uncomfortable with the rider or if you are unsure about getting to the destination. Uber will ban you from driving if you reject rides you aren’t comfortable taking.
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What Taxes Do Uber Drivers Need to Pay?
Most Uber drivers need to make quarterly estimated tax payments and pay self-employment taxes. Consult a tax professional in your area for more specific tax advice about becoming an Uber driver.
Quarterly Estimated Tax Payments
When you drive for Uber, you don’t have income taxes taken out of your pay like you would with a traditional job. Instead, you, the independent contractor, may need to make your federal, state, and local income tax payments throughout the year. These are called quarterly tax payments or estimated tax payments. Whether you need to do this depends on how much you expect to earn during the year.
Fortunately, Uber drivers can claim all of their business expenses to reduce their overall taxable income. Drivers can take the standard mileage deduction or claim the actual amount spent. The standard mileage deduction in 2020 is 57.5 cents per mile driven for business use. If you claim the actual amount spent, you can deduct the cost of gas, repairs, depreciation, lease expenses, and other car-related expenses. Regardless of whether you claim the standard deduction, Uber drivers can also claim in-car amenities made available to riders.
When you’re an employee, your employer pays half of your Social Security and Medicare tax liability. The other half comes out of your pay. When you’re an independent contractor, you have to pay your half plus the half an employer typically pays. The combined tax rate for both equals 15.3%. You can deduct the employer portion (7.65%) from your taxes.
How Much Are Uber Driver Expenses?
We all know that maintaining, insuring, and gassing up a car can be expensive. So, when you work for Uber, you may wonder how expenses like these are covered. To answer this question, they’re covered by you. Uber drivers are expected to cover their own car expenses fully. These expenses commonly include:
- Car lease payments. You can lease a car from Uber but are responsible for the fees. You can also drive your own car and are responsible for any fees that come with that ownership.
- Insurance. Age, location, vehicle type, coupled with a variety of other factors determine what you pay for insurance. Uber does offer drivers a commercial insurance policy. This policy is $1 million of coverage per incident.
- Tolls, license, and permit fees. These are all paid by you. However, your passengers will find themselves paying a surcharge when you encounter tolls on the road.
- Maintenance. All maintenance fees are your responsibility. The one exception is when a customer damages your car. Uber will reimburse you in this situation.
- Gasoline. You will need to pay for your own gas as an Uber driver. Don’t expect to be reimbursed.
These expenses all vary depending on the age of your car, mileage, amount of driving, and destinations you travel to. Also keep in mind that as an Uber driver you can claim a deduction for your vehicle expenses. There are two ways to claim this deduction.
- Standard mileage rate. The IRS issues a standard mileage rate each year. For 2018, it is 54.5 cents per mile. If you drove 1,000 miles driving for Uber, your deduction would be $545.
- Actual expense method. With this method, you track the actual cost of gas, repairs, car insurance, registration, licenses, and depreciation or lease payments for the year, then multiply those expenses by the percentage of miles driven for business. For example, if your total automobile expenses were $5,000 in 2018 and you drove 10,000 miles for the year, 2,000 of which were for Uber, your deduction would be $1,000 (20% of $5,000).
You can also deduct business-related smartphone use, as well as water or snacks given to passengers. In addition, the cost of parking and tolls paid while driving for Uber can be deducted.
Recently, the Tax Cuts and Jobs Act created a special deduction for owners of pass-through businesses such as sole proprietorships, partnerships, LLCs and S corporations. If your Uber driving business qualifies, you may be able to deduct up to 20% of your business income from your taxes. There are several rules and thresholds to navigate, so talk to your tax advisor to determine how the pass-through deduction will apply to your situation.
Frequently Asked Questions
Here are a few questions people ask about driving for Uber.
Is Uber meant to replace a full time job, or supplement income as a side hustle? It’s fair to say that, for most Uber drivers, a job with Uber has to be a supplement to a salary they earn elsewhere. There simply isn’t enough consistency for the typical Uber driver to make enough money to sustain themselves with Uber alone. So, many Uber drivers are only part-time drivers.
But, drivers who operate full-time in a dense urban area, and optimize their trips by supplementing their time behind the wheel by providing other Uber services can certainly earn a respectable income.
At that point, they are working a full-time job but don’t receive the benefits that other full-time workers enjoy.
For instance, you will not receive any paid time-off or sick leave working for Uber.
How much Uber drivers make by using the platform is up to them, but the ancillary benefits of full-time employment are not attainable as an Uber driver, as you are not an employee of Uber.
How long does it take to make 100 Uber trips? That depends on how buys your operating area is and how much you are working. If you are operating in a densely populated urban area, it’s quite possible you could complete 100 trips in a week to ten days, depending on the number of hours you work. But, if you are in a more rural setting, with longer rides for each trip, or you don’t work many hours consistently, it will take much longer to complete 100 trips.
Can you make $1,000 in a week with Uber? You can. But, you might be the exception to the rule. Most Uber drivers do not make that kind of money. But, by keeping in mind Uber’s payment structure, targeting times where your trips are eligible for surge pricing, and providing quality service that earns tips from your passengers, you can drive your earnings higher.
There are a great many factors that can make it easier (or harder) for full-time drivers to earn money with Uber.
It’s up to you to tailor your efforts to maximize your wages.
So How Much Do Uber Drivers Actually Make?
Many Uber drivers are students who want to pay their way through college. How much Uber drivers earn varies from one driver to another, and it all depends on how much they drive, and many other aspects, such as car maintenance, gas expenses, tolls, insurance, and so on. The time of the drive is also relevant to the amount a driver is going to earn at the end of a ride. It is hard to calculate an average number.
Overall, a driver is said to get an average weighted driver wage of $21.90 per hour. If a driver works 30 hours a week, the rough projected annual driver salary would be around $34,164.
However, it is important to consider that drivers do receive bonuses sometimes. It can be a little rare, but they still get some advantages. Some of the bonuses include sign-on bonuses and referral fees.
If you are still curious about numbers in different major cities across the United States, then check out this 2019 chart that says how much drivers made per hour before expenses and after TNC commission.
|Market||Earnings Per Hour Median||Earnings Per Mile Median||Earnings Per Trip Median|
|Los Angeles, CA||$17.07||$0.87||$9.84|
|New York, NY||$20.96||$1.10||$13.33|
|Bay Area, CA||$21.21||$1.06||$11.67|
|San Jose, CA||$21.80||$1.00||$11.51|
|San Diego, CA||$17.15||$0.79||$9.39|
|San Antonio, TX||$12.44||$0.64||$9.29|
|Las Vegas, NV||$15.37||$0.89||$8.61|
|Oklahoma City, OK||$14.05||$0.62||$8.29|
|Kansas City, MO||$16.85||$0.69||$11.23|
|New Orleans, LA||$14.33||$0.90||$10.31|