Uber is the largest taxi company in the world, yet it doesn’t own a taxi. That used to be the case, now they do own cars, both driverless cars and cars they lease to Uber drivers. That is not the point of this article though. Today I wanted to talk about Uber to earn money from home. That is right you can signup to drive for them and make money. Uber claims their drivers make $25 per hour on average. We have all seen these claims. Is that claim real? Just how much can you make by driving for Uber?
What is Uber
Uber is a rideshare application that connects drivers with people who need a lift somewhere. They are located all over the world, but we are going to focus on the United States Market, mostly. The jest of Uber is you as an independent contractor get paid to pick people up and deliver them to their destination.
How Much Money Can I Make With Uber?
This is what you came for, the so-called meat and potatoes. As I mentioned above Uber claims $25 per hour. Is that true? In order to answer that you really need to start with how it is all calculated.
The passenger fare is a two-step process. The first step is getting the subtotal which is simply the base fair (for the area) plus the time and distance. Of course, the base fare varies from one location to the next. Once you start driving you will easily be able to calculate each base fare if you want. Shown in an equation it would look like this:
Subtotal = base + time + distance
The second part of the process is getting the final fare amount. That is calculated by taking the subtotal and multiplying it by the surge price and adding the booking fee. Surge prices are higher prices for times when drivers are in short supply and customers are in high supply. Shown in an equation it would look like this.
Final Fare = (Subtotal x Surge Price) + Booking Fee
Let’s not forget the fact that Uber takes 20% of the final fare amount. Why do they do that? They need to make money as well and they provide the platform to allow you to make money. Really it is a fair deal. Stating this in an equation it would look like this:
Driver Take= Final Fair -(Final Fair x 20%)
So, let us see how that really plays out. Let us say that the base fare is $1.50. The drive time is about 15 minutes and the minute fair is $0.18 or $2.70. And the distance is 2.4 miles with a charge of $0.85 per mile or $2.04. Then the subtotal would be $6.24.
Final fare calculations, in this case, we will assume there is a surge fair of 1.5, because of a special event or something. Then we would multiply the subtotal of $6.24 x 1.5 or $9.36. Then we need to add the booking fee of $1.20 or $10.56. If we take that and multiply it by 4 assuming you can get one ride right after the other that is suddenly $42.24 per hour!
That would be great, but we also need to give Uber their part of the fare. So, we take that $10.56 and take 20% away or take away $2.11. The driver would then get about $8.45. Multiply that by 4 and you end up making a little more than $33 per hour. One thing that you must realize though is really you will only get 2-3 passengers an hour because you need to go to the new person’s location. With 2 passengers an hour (with the same numbers as used above) would be about $16.89 and with 3 would be $25.34 per hour.
While you are again not going to get rich doing this you can make some extra money.
What Are the Expected Expenses?
You are responsible for all your own costs. Things like gas, phone, data used on phone, personal car insurance, rideshare insurance, toll road cost, and wear and tear on your vehicle. As far as insurance goes you want to maximize your limits on your pickups then the cost of insurance per ride is the least possible.
All your personal expenses whittle away at the $16-$25 an hour. Just keep them all in mind.
How to Sign Up to Drive with Uber
There are some obvious things you will need to qualify to drive for a rideshare program. First, you would need to have a good driving record and no DUI’s. The driver must be 21 years of age as well.
You will also need to have a reliable vehicle. Most rideshare companies require the vehicle to be no older than 2001 to 2010 depending on the location and have 4 doors. There are some exceptions, for example, if you have a classic high-end car.
You would simply apply here. If you reach all the qualifications you will be charged $20 for your vehicle inspection and be able to start shortly after you pass. They pay you by direct deposit.
Any Other Options
There are many driver programs out there including Lyft which is Ubers biggest competitor. You can make a little extra money or even make a living doing this. It goes without saying that when you are not driving you are not making any money with them.
I personally like making money in a way that allows me to still make money on my down times. That is why I like blogging. You can find out more about how I started earning money online through my top recommendation here.
If you have any experience or want to share how much you make by driving for Uber please leave your comments below.