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Earning Money as a Rideshare Driver

The gig economy is becoming increasingly popular because of its flexibility and work-life balance. Being a driver for Uber, Lyft, or other ride-sharing companies is one of the most common gigs, and with good reason. Rideshare drivers can earn $15 to $20 an hour driving people around town.

Is Being a Rideshare Driver Right for You?

Each platform has their own requirements that you must be able to meet before you can start earning money as a rideshare driver. 

To drive for Uber, there are city and state requirements. Most states require you to be at least 21 years old with at least three years of driving experience in the U.S., or 23 years old with one or more years of experience. All drivers must have a valid driver’s license, a clean driving record, and no criminal history. You must also have an eligible four-door vehicle with current registration and insurance.

Uber requires all their drivers to pass a background check that includes seven years of your criminal and driving history. Drivers who have a DUI or drug-related offenses, a history of reckless driving, or are involved in any fatal accidents will not be accepted.

Lyft, on the other hand, has slightly different requirements. You must be at least 21 years old with an active U.S. license for at least a year. You must pass a background check that also looks at your driving history. You will not be accepted if you’ve had more than three moving violations in the past three years, a major moving violation in the past three years, a DUI or drug-related offense in the past seven years, or any driving-related conviction in the last seven years. If you’ve ever been convinced of a violent crime, a felony, a drug-related offense, a theft offense, or a sexual offense, you will not be accepted.

Your vehicle must match requirements, which vary based on the city and state you plan on working in. In some cities, it’s okay for your vehicle to be as old as a 2002, but others require the vehicle to be newer than 2010.

Vehicles must be in good condition with no cosmetic damage and no commercial branding – meaning you can’t be getting paid to advertise other companies. Your vehicle will need to pass an inspection.

Gather your documentation – driver’s license, registration, and proof of insurance – before starting the application process to make it move faster. You should hear back within a few days, but sometimes, it can take weeks if your background check gets held up.

To be successful as a rideshare driver, you must:

  • Keep going: In the beginning especially, it can be frustrating. There are a lot of people who have plenty of negative things to say about rideshare driving. Crunch the numbers yourself before deciding it’s not for you. Yes, you’ll have extra expenses for car maintenance, gas, insurance, and incidentals, but much of this can be written off on your taxes as business expenses.
  • Know when it’s time to stop driving: It’s important to follow the rules of the road, because people don’t want to feel like their lives are at risk when they’re in the car with you. If you’ve driving for hours on end, you’re likely to get tired, and it will show in your driving. It’s okay to take a break.
  • Treat the passenger as if they’re always right: Even if they’re disrespectful and make you wait, eat in your car, or do other things that annoy you, if you are vocal about it, chances are you’ll end up with a bad rating. You can leave them a bad rating, too, of course, but if you get too many bad ratings, you’ll be deactivated as a driver.
  • Understand the rider point of view: Before you start driving, take a trip as a rider with the platforms you’re driving for. Many people drive for both Uber and Lyft to make sure they’re maximizing their earning potential. 
  • Take a mix of short and long rides: When your car is in motion with a passenger, that’s when you’re making the most money. Traffic is your enemy, so take advantage of a mix of short trips and long rides to balance out your earning.

You can offer “extras” like phone chargers, snacks, and water to your riders. This helps improve their experience with you, which increases the likelihood they’ll leave you a good rating.

Pros of Being an Uber Driver

  • Flexibility: You’re free to choose your schedule, driving only when you want to and are able to.
  • Payments: Uber drivers can cash out their earnings a few times a day, which is useful when you urgently need money which gives you freedom to plan.
  • Meeting New People: A lot of riders don’t mind the light conversation with the driver, so if you like to meet new people, you’ll have a lot of things to enjoy about the job.

Cons of Driving for Uber or Lyft

  • Insurance: You must notify your insurance company about immediately and review the various plans they offer for drivers. Uber and Lyft have their own insurance coverage that applies throughout the journey, whether a driver is waiting for a ping, driving to pick up the passenger, or transporting a passenger in the car.
  • Wear and Tear on Your Car: When you transport people in your car, all expenses associated with wear and tear are on your own. Carefully track your mileage and expenses to maximize your tax deductions.
  • Holidays: While other people are spending the holidays with family and friends, you’ll need to be on the road to make the most of your money. Of course you’re free to skip them, but many drivers don’t.
  • Unstable Demand and Fares: The number of drivers in an area, as well as rates, are always changing. This results in fewer daily rides and lower income. 

Startup Costs

If you’ve already got a car that meets Uber and Lyft requirements for your area, you can get started right away. You may run into some costs if your vehicle doesn’t pass inspection, but you can make the necessary repairs and get up and running.

If you don’t have a vehicle that meets their requirements, you may be able to find a rental car solution through Uber partners – available in some cities. Lyft has partnered with General Motors to provide the Express Drive Program. There’s also the option to go through another service like HyreCar. Generally speaking, this kind of program only helps you make money when you’re in a major market like Chicago or L.A.

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