How much money can you make driving for Uber?

How Much Money Can You Earn Driving Uber?

Can you make money with Uber? As an Uber driver you can make as much money as you want. The amount you make all depends on the hours you choose. For example, 35% of Uber drivers work 12 to 19 hours a week. On top of this, Uber drivers make an average of $19 per hour. Therefore, say you worked 12 hours at $19 an hour. You’d take home $228 in just one week.

If you’re looking for part time work, this may be a satisfying income for you. However, if you’re looking for full time work, you can always up your total hours. In fact, if you work more hours, Uber will eventually pay you more money per hour.

Your hourly pay is based off of the fares customers pay you. Each passenger you pick up pays a fare for the ride. However, these fares are not the amount you are paid directly. Uber does take a small portion out of each fare’s total.

The elements included in Uber’s fares are:

  • A trip fare. This covers the length of the trip and how long it took to complete.
  • A booking fee. These are different depending on your geographical location and city. Booking fees are used to help cover Uber’s safety, insurance, and other operational costs.
  • Tolls. The total amount paid in tolls is included into the fare for each trip.
  • Uber fees. This fee helps pay for technology and app development for Uber’s drivers. These fees are not applied to toll costs. You will be paid fully for each toll you encounter.

As an Uber driver, you will also charge surge pricing during certain time periods. Surge pricing occurs when there is a high demand at a certain time period. This high demand causes prices to go up and customers either wait longer for a ride or give in and pay the surged price. To determine a surge price, you multiply a trip’s fare by the surge multiplier.

However, don’t stop there when calculating your profits. Your money making opportunity with Uber doesn’t end with fares. You will also receive tips. Passengers can use the app to send you a tip directly.

Your overall net income from driving for Uber is up to you. Some Uber drivers have made up to $90,000 or more a year after working for many hours. Your annual salary is based on:

  • How many hours you drive
  • When you drive
  • Where you drive
  • What you receive for tips
  • What expenses you have to pay

How Does Uber Calculate Your Pay?

According to Uber, they calculate your pay on a weekly basis by summing up your trip fares, cancellation fees, tips, promotions, referral awards and tolls. They then take away any Uber fees, vehicle fees and device subscriptions where applicable. The total pay is then deposited in your bank account and in most cases deposits are daily!

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What are Some Common Expenses for Uber Drivers?

Vehicle Maintenance

When you drive for your job, you drive more miles than you otherwise would. You’ll need to change the oil, other fluids, and tires more frequently.

Car Payment

If you don’t already own your car outright, you will need to continue making lease or car loan payments. According to Experian, the average monthly payment for a new car loan is $568. The average monthly payment for a used car loan is $397.

Car Insurance

Uber drivers need to maintain comprehensive and collision coverage on their personal auto insurance. According to data from the National Association of Insurance Commissioners, collision coverage costs $363 per year on average, and comprehensive insurance costs $160 per year on average.

Uber has additional insurance coverage that protects your car should you get into an accident while on the clock. However, drivers must pay a $1,000 deductible before the coverage kicks in. Uber also has third-party liability insurance and uninsured/underinsured motorist bodily injury insurance for drivers. Learn more about Uber and insurance here.

Gas

Gas prices vary significantly, depending on where you live. Uber drivers must pay for the gas used to operate their Uber business. You can claim gas using the standard mileage deduction or by tracking actual gas expenses and deducting an exact figure for gas.

In-Car Amenities

Some Uber drivers choose to offer riders in-car amenities like mints, phone chargers to use, water bottles, tissues, hand sanitizer, etc. Amenities aren’t required, but some drivers claim amenities help boost their ratings.

You can claim in-car amenities as a business expense outside of the standard mileage deduction.

Instant Pay Fee

Uber pays drivers weekly, but if you want your earnings faster than that, you will need to sign up for Uber Instant Pay. With Instant Pay, drivers can withdraw their earnings using a debit card for $0.50 per transaction. To avoid the fee, drivers can open an Uber debit account through GoBank.

Not every bank processes withdrawals immediately, so although it’s called Instant Pay, it could still take a day or two until the money appears in your account.

Health Insurance

Currently, driving full-time for Uber doesn’t mean you get benefits like health insurance. Uber drivers need to secure their own health insurance if they don’t already have health insurance through a family member, partner, or employer.

This might change in the future. In the Spring of 2020, Uber announced plans to establish a health insurance policy for drivers. Uber would reportedly pay for health benefits on a sliding scale based on hours worked.

Other Benefits

Uber doesn’t give drivers matching contributions to a retirement plan, life insurance, dental insurance, vision insurance, or other benefits. If you want these benefits, you will need to purchase them for yourself as an independent contractor.

How Much Do Uber Drivers Actually Make?

Uber’s pay structure factors in several variables: base fares, tips and other incentives. Calculating a realistic average is difficult. However, according to Salary.com, most Uber drivers earn about $15 to $22 per hour.

Make Your Money Work Better for You

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.  

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How Much Can You Actually Make on Uber?

You can make a median salary of $56,066 as a full-time driver for Uber in the United States, according to ZipRecruiter. Annual income could go as high as $130,000 or as low as $14,500, depending on several factors. Factors that affect median earnings include hourly wages, the type of Uber driving, and location. For example, Uber Eats drivers currently earn an average annual salary of about $40,176

The top three highest paying cities for Uber rideshare drivers at the time of writing are San Mateo, CA, Berkeley, CA, and Daly City, CA. Full-time Uber driver earnings in these cities include an average of $69,121, $66,778, and $66,592 yearly respectively. 

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Gross vs. Net Income

Several significant deductions will reduce the amount that Uber drivers net. These are important to consider when considering gross versus net income as a driver.

Uber drivers are contract, or 1099, workers. This entails they work on their own schedule with their own supplies. Drivers are responsible for all vehicle maintenance, gas and insurance compliance.

As contract workers, income taxes are not withheld from pay. Drivers must remember that they owe taxes on the pay they receive from Uber. Not only do they need to calculate their income taxes, but they must also pay a self-employment tax if they make more than $400 per year as a 1099 contractor.

The self-employment tax is 15.3% and covers both the Medicare and Social Security tax contributions that both employee and employer pay in a typical job. Since Uber drivers are self-employed, they must pay 7.65% — half of the 15.3% total — more than they would as regular W-2 employees.

How Uber Commission and Fees Work

It’s not that difficult to understand the way Uber fees and commissions work.

For instance, when it comes to fees, the passengers are the ones who have to pay a booking fee, as well as per minute and mile fee for their ride. After the ride, you as a driver would be paid the majority of the fare you made. And you only get “the majority” and not all of it because Uber is going to get their cut, respectively the “Service Fee”.

More than 25%

The amount that Uber says it charges their drivers is 25%, but it actually takes a little more than that from their earnings. This is all due to the fact that some additional fees are taken by rideshare companies, resulting in a higher percentage for the cut.

In the past, Uber drivers had to drive around 2.36 miles to make $10 before fees, but nowadays, the prices were lowered by Uber. As a result, a driver will have to drive 4.71 miles to make the same amount of cash.

Fees

Also, there is the booking fee and a safe rides fee for every Uber ride, which is between $1 and $3. These fees vary by city, but the driver cannot actually see these in their bank account, as this goes directly to Uber.

So, the commission taken by Uber is higher if the ride fare is lower, meaning the rideshare drivers would make less. So, in the end, even if Uber claims to take 25% of its drivers, it will actually take up to 42.75%. If you are doing short rides, then it won’t be too profitable for you.

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Earn passive income

There’s nothing better than passive income to bump up your earnings to $1000 per week and more. There are a few ways to put in very little effort and come out with a nice stash of cash.

You’ve undoubtedly noticed offers from both Uber and Lyft to pay you for referring new drivers. Companies are frantically trying to recruit drivers, and those referral fees are going through the roof. 

Referrals.

Drivers can get a referral link to send to friends and acquaintances who might want to take up the rideshare driving gig in a serious way. All you have to do is make sure you get your link in range of the right eyes. Here are some suggestions:

  • Email or text your link with a “Hey, how are you doing?” message.
  • Put your link on your website, even if it involves a totally different kind of business.
  • Carry business cards with your link on them, and hand them out liberally.
  • Post your link on your social media.

As with all sales pitches, make sure to tell people they can pass it on to a friend or family member who might be into it. It can’t hurt you, and every time a new driver signs up with your link and completes the required number of rides, your virtual cash register goes “ka-ching!”

Advertising

Some companies make ads specifically for drivers to carry on and in their vehicles. On the outside, they’re in the form of car wraps and rooftop ads. Companies such as Wrapify pay car owners up to $450 a month (depending on wrap type and campaign structure) to display their ads on drivers’ cars. 

On the inside of your car, you can get video games with ads, and news and information programming to keep your backseat travelers occupied. Improve your riders’ experience and sign up with Play Octopus to receive a free gaming tablet. You can receive cash rewards of up to $100 per month for driving activity and passenger game play!

You will need to check regulations, both with your local governing body and with Uber and Lyft. In most cases, though, these ads offer ways to bring in money with almost no effort on your part.

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

Ways Uber Drivers Make Money

Now, let’s take a look at the different ways Uber drivers make money.

Fares

Uber drivers receive a base fare plus compensation for how long and far they’re driving. According to the Uber website, how much you make per mile or per hour varies by city. Fares can change over time, too. For example, in 2019, Uber dropped rates in Southern California from $0.80 per mile to $0.60 per mile. This led to protests and strikes in California.

Tips

Riders can tip their driver during or after their ride. Tips vary greatly, and most riders don’t tip. A 2019 study from the National Bureau of Economic Research found that only 1 percent of customers always tip and around 60 percent never tip. The average tip (of those who do tip) is $3. Female drivers are more likely to get tips than male drivers.

Ridester’s 2020 driver survey also found that tips added just $1.31 per hour to a driver’s earnings in 2020.

Bonuses & Promotions

Uber offers different bonuses throughout the year that enable drivers to earn extra money. An example bonus on the Uber website states, “earn $30 extra for completing 20 trips this week.”

Sometimes Uber runs driver sign-up promotions that give new drivers a $500 to $1000 bonus for signing up and completing 50 to 100 rides in their first month. Sign-up bonus availability depends on the time of year and where you plan to drive.

Cancellation Fees

Uber drivers must wait a certain amount of time for the rider to show up. If the time limit passes, an Uber driver can mark the rider as a no-show. In most cases, the driver gets a cancellation fee of around $5.

How Much Can You Earn Driving for Uber? The Bottom Line

How much do Uber drivers make? Working as an Uber driver can provide a steady revenue stream.

There are quite a few factors that will influence your daily earnings, and some of them are outside of your control.

Working in an urban area is probably the best way to enhance your earnings as an Uber driver.

But, by targeting opportunities to increase your profits, like working during surge pricing and high-volume periods, you can tilt the playing field to your advantage and earn more money for your time behind the wheel.

And remember, all Uber drivers set their own schedules and priorities.

So, for someone who wants to avoid the demands of an office-based or nine-to-five type job, the flexibility of an Uber schedule can be especially appealing.

If you are thinking about driving for Uber, sign up today and see what you can earn.

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