Uber is offering a new debit card that will help its drivers get paid instantly

How Uber Calculates Payments

You may be wondering “How much does Uber pay?”but in order to find the answer to that question, you need to know the way Uber calculates payments.

Depending on the service, payments are calculated a little differently. More specifically, the amount you will end up earning depends on where you drive, how often you do it, and when you drive.

For Rides

For a ride, Uber will calculate depending on the booking fee, aka the fee paid by the rider to cover regulatory, safety, and operational costs, and the service fee, which funds payment processing, app development, and customer support. But there are other things taken into consideration when calculating the payments for rides.

For example, the surge is also taken into account. Surge basically allows you to look on the heat map, which shows you, as a driver, where people have the highest demand for Uber. This allows you to earn more cash apart from your standard fare. And the standard trip fare is taken into consideration as well, which amounts to how far you drive, as well as the amount of time that you drive. Another thing added to the calculations is the earn on long-distance pickups, on minimums for short trips and while waiting for riders. Also, if a rider will cancel a request, there will be a cancellation fee that you are going to receive.  

For Delivery

When it comes to delivery, you would earn money depending on your pickup and dropoff. How far you travel will also be something that influences the amount of cash you are going to receive. In addition to that, if there are traffic and time delays, they are going to be factored into your fare.

If you happen to work in areas where people order food, and at busy times too, then you are going to earn way more cash. Also, besides getting the standard amount of cash for pickup and distance, you are also going to earn money for every dropoff.

Uber Instant Money FAQ

How To Check Uber Payment Statements?

When you become a driver with Uber, you get an Uber account. Through the driver app, you accept or decline rides, communicate with the riders, and more. You can also keep track of your earnings. Here’s how.

  1. Open the driver mobile app on your smartphone or sign in to drivers.uber.com.
  2. Find the Earnings tab and tap to open it.
  3. Open the Driver app on your smartphone.
  4. Find the Earnings tab and tap to open it.
  5. Tap on a specific week, month or year to see how much you’ve earned.
  6. Tap “View statement.” To download a statement, tap the “Download CSV” button.

How Many Times A Day Can I Cash Out Using Uber Instant Pay Service?

With Uber Instant Pay, drivers and delivery drivers can cash out the available balance up to 5 times per day.

How Long Does It Take To Receive Your Earnings With Uber Instant Pay?

As its name says, the earnings are in most cases immediately available in your bank account. Some banks may still take 2-3 days to process an Instant Pay cash out.

Can I Use A Prepaid Card Or Credit Card For Instant Pay?

No, you can not use a prepaid card or a credit card. Your card must be connected to your bank account.

Can I Drive with Uber with No Bank Account?

It is one of the requirements to drive with Uber . You must have a checking account to sign up to drive or deliver with Uber.

How to Set Up Uber Direct Deposit

Setting up your direct deposit is really easy and can be done directly from your driver app.

In order to set up your paycheck, you will need both your bank’s routing number and your account number for those transactions.

Follow our tutorial:

  • Open the app
  • Choose the menu “Payment”
  • Tap on “Add payment method”

Video

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.

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.

Self-Employment Taxes

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.

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.

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 sign up and use Uber Instant Pay

There is no separate sign-up process for Uber Instant Pay, just have to add a supported debit card to your Uber driver account

You can do that in the Payments section of the Uber Partner app. Then navigate to the Earnings tab in your Uber Partner app, click the ‘Cash out’ option, confirm the payment details on the next screen, and tap ‘Confirm Cash Out’. Then it’s payday on your terms! 

The service is completely free when you sign up for the Uber Debit Card. Otherwise, there is a $0.50 fee per transfer when cashing out your earnings. Most debit cards from visa, MasterCard, and Discover are supported.

Since Uber partners directly with the banks to make Instant Pay possible, they have the ultimate control over when you get paid. According to Uber, some banks delay the transfer of funds up to 3 days, including: 

  • Bank of New York Mellon
  • Webster Bank
  • First-Citizens
  • Northern Trust
  • First National Bank of Omaha
  • Amegy
  • H&R Block
  • BOKF
  • Silicon Valley Bank
  • California Bank and Trust
  • UBOC

Does Uber Eats Pay for Gas?

Uber Eats does not reimburse drivers for gas or provide any separate gas allowance. As independent contractors running their own business, couriers are responsible for their own expenses.

There are some exceptions of sorts.

In March of 2022, Uber Eats announced that they would add a surcharge of 45 cents per delivery to help drivers offset the increase in gas prices. However, Uber has since announced that the extra benefit would expire on June 15, 2022.

Under Proposition 22, California drivers have a minimum pay that is based on active time on deliveries and miles driven for a delivery. If delivery fares do not meet that minimum, Uber Eats has to make up the difference.

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

Surge Pricing

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.

Tips

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.

Six factors that determine what you can make on Uber Eats

Here’s the important thing to understand: Uber Eats does not pay a wage, salary or anything like that.

I think Kevin at FinancialPanther.com said it best. With any of these food delivery apps, you are not trading time for money, but you are trading tasks for money.

You complete a delivery (a task). You receive payment for that delivery. It’s as simple as that.

When you understand how the payments work with Uber Eats, you get a better feel for what you can make. You also know the things that you can control to increase your earnings.

The Uber Eats pay model boils down to four things: Delivery fees, their Trip Supplement, Incentives, and Customer Tips. Two other factors make a difference in what you make: time and expenses. We’ll look into all six of these factors.

1. Uber Eats base pay

Uber Eats calculates a delivery fee based on how far you have to go and how much time it takes.

Unfortunately they don’t tell you how they calculate the fee.

Once upon a time they used a very transparent formula.

  • A pickup fee
  • A drop off fee
  • A per-mile fee (from the restaurant to the customer’s location, actual miles)
  • A per-minute fee (from arrival at the restaurant to the time you drop off).

Uber Eats still calculates the base fee on those factors. However, they no longer tell us what those numbers are.

What that means is that the longer you have to drive from local restaurants to the customer, the higher the base fee. The longer a delivery takes from the time you arrive, the higher the base fee.

In this way, I believe Uber Eats is better than the other major apps about adjusting their delivery fee in accordance with how far you have to go. The following screenshots of delivery pay summaries show you some differences.

The driver pay summary above shows a very short, very quick delivery. The customer was only a block from the restaurant and the delivery took less than 9 minutes. The base pay on this delivery was only $1.59.

By comparison, this screenshot was for a long trip, 8.4 miles and 21 minutes. The base pay was $4.69, nearly three times as much as the shorter faster delivery.

A weird anomaly revealed the current Uber Eats formula in my market

When I was going through my summaries one time, I noticed one delivery in the middle of all the others that showed a different breakdown of fees. Evidently the computer had a glitch, because it showed all of the old elements.

Doing the math, it breaks down to:

  • 35 cent dropoff fee
  • 74 cent pick-up fee
  • 30 cents per mile
  • 5 cents per minute.

These numbers are fairly consistent with the base pay for most of my deliveries. If you do the math, the formula comes within a couple pennies on each of the deliveries above.

Under the old pay model, Uber Eats used a different formula for different markets. I don’t know if they do that still today. Either way, this shows that Uber Eats is still using a version of their original pay formula to calculate the base pay. They’re just no longer letting us know what it is.

2. Uber Eats Trip Supplement

Uber Eats will sometimes add an element to the pay called a trip supplement.

While the base fee appears to be based on a formula, Trip Supplement is the piece to make the total delivery fees “whatever Uber Eats wants them to be.”

If the base pay is less than whatever minimum Uber Eats feels like honoring, the Trip Supplement makes up for it. That first screenshot, for instance, had a 91 cent Trip Supplement to bring the total delivery fee up to $2.50.

When they added the Trip Supplement, they said it was there to “make earnings for each trip more reflective of that trip.”

I think this is a lot like what Doordash includes in their base pay. Supposedly time and distance are a factor, but the big part of how the delivery fee for Doordash orders is “Desirability.”

Basically, this is Uber’s way of adding a wild card to the payment. If they don’t think drivers will accept an offer, this is the easy way to increase pay. Bump up the supplement and now maybe someone will take it.

There’s no discernable rhyme or reason as to how Uber determines the trip supplement. At the end of the day about all it does is give Uber Eats some additional pricing flexibility.

3. Uber Eats Incentives

There’s a third piece of the puzzle that also gets paid by Uber. They have a number of incentives that they offer to try to make sure that deliveries get taken.

On a delivery by delivery basis they could bump up the pay on a certain delivery with the trip supplement. However, to handle deliveries at a larger scale they’ll use incentives to get more drivers to get out on the road.

Because those of us who deliver for Uber Eats are independent contractors, Uber cannot set schedules, nor can they require us to accept any particular delivery orders. Yet somehow they have to make sure that as many orders are actually delivered as possible.

The best way to do that is to offer extra money to encourage more people to deliver. There are three types of incentives that are the most common that I’ll discuss.

They may have some others from time to time. For instance, at one time they offered a minimum hourly guarantee in my market if you met certain conditions. I’ve heard of consecutive delivery bonuses. But these are not nearly as common, so we’ll stick to these three.

You could see one, two or all three of these at any given time. And then, when things are slow, you may not receive any. It all depends on what Uber thinks the supply and the demand for drivers will be.

Boosts

Uber Eats doesn’t work with schedules in the same way that Grubhub and Doordash do. However, they will use a boost promotion to encourage drivers to plan on delivering at certain times.

Uber will forecast what demand they think there will be within their market, and when they think they’ll need drivers the most. Using that data, they’ll post a schedule of when a certain boost multiplier will be live and in what part of the market.

The screenshot above is from the Promotions calendar in the Uber Driver app. You’ll see that boosts are planned for Monday from 5 to 9 PM and Tuesday from 4 to 8.

The number in the boost tells you how much the base pay is going to be boosted. A 1.1 boost means that you multiply the base pay by 1.1. In the second pay screenshot listed above, there was a 1.1 boost in effect at the time. The base pay was $4.69 and the boost was another $0.47. That was 10% of the base pay.

There was no boost in the first example pay summary. If there were a 1.1 boost it would have added 16 cents to the pay. Don’t spend it all in one place.

The boost is only multiplied against the base pay. Trip supplements and other incentives do not affect boost pay.

The map above is a screenshot from the Uber app that shows the boost zones available in the different parts of the city. You can identify from the map the parts of town where deliveries are paying more.

Surges

Uber Eats will also offer an extra amount per delivery called a surge during peak hours. Surge pricing for UberEats delivery drivers is similar to peak pay with the Doordash app. It’s often one or two dollars extra per delivery (or higher in the busiest times).

While boosts are usually scheduled and tied to certain times, surges often happen on the fly. In other words, Uber Eats can figure out there’s a higher demand than they expected and they’ll bump the pay per delivery accordingly.

The pay you get from a surge isn’t based on a percentage of your base pay but instead is a fixed amount that is added to every delivery in the region at that time.

Quests

To encourage you to accept more deliveries, Uber Eats will offer a Quest. If you complete so many deliveries in a certain time frame, Uber Eats will pay you a bonus of so much money.

Like boosts, Quests are usually scheduled. They come in a number of shapes and sizes.

Uber Eats might offer a larger quest for completing a certain number of deliveries in a week’s time. Or like the screenshot here, they’ll offer a quest of $10 for every five deliveries completed. I’ve seen Uber pay a quest for just a single delivery. Other times I’ve seen them give you a choice of quests for the week, where for example you could choose between whether you want to shoot for five, ten, twenty or forty deliveries for the week.

You only get paid for a quest when you complete all deliveries. The deliveries must be completed and other conditions may apply.

4. Customer tips

Tippig on Uber Eats has been by far the largest area of improvement over the past year or two.

Customers can tip one of three ways:

  • Customers can add the tip when they place their food order
  • They can choose to go into the app after the delivery is completed and add a tip. They can also adjust the tip amount if they felt service was fantastic or horrible.
  • Customers can choose to give you a cash tip as you complete the delivery.

Uber actually discouraged tipping when they started as a company. They claimed that their rideshare drivers were paid well enough that tips weren’t necessary.

That attitude moved over into delivery. Originally, customers could not tip through the app. When Uber finally introduced in-app tips, they didn’t make it easy for the customer to find. Customers could only tip after the delivery was over, and Uber didn’t make the option prominent.

Finally, starting around January 2019, Uber started letting customers add their tip when they placed their order. It took them time, but I think they finally realized that if customers tip well, Uber wouldn’t have to pay as much out of their own pockets.

Once they figured that out, Uber Eats quickly became among the best at encouraging their customers to tip.

Related: While tipping has improved immensely for Uber Eats drivers, Uber Eats does still play games with the tips. Read more about how Uber Eats is hiding the tip and then lying about it.

5. Time

The first four factors are all tied to payments you get from Uber Eats (or from the customers). This isn’t a pay factor but it may make the most difference of all of them in how much you can earn.

How quickly can you get the delivery completed?

Because here’s the thing: You get paid what you get paid for any given delivery. However, if you can get more deliveries done in a given time, that’s more money that you make.

Let’s say the average pay on a delivery is $10. If you can complete two deliveries per hour, that’s a $20 hourly rate. Three deliveries in an hour bumps you up to $30/hour and four hourly deliveries nets you $40.

Faster, shorter deliveries mean more deliveries per hour. If you can avoid wait times at restaurants, you can complete more deliveries.

Earlier in this article I mentioned how the Financial Panther site stated that this was about trading tasks for money. I agree with him, but let’s be real here. Tasks take time. That means you’re still trading time for money.

The thing is, the more tasks you complete in the same amount of time, the better your bottom line at the end of the day.

Choosing shorter deliveries and avoiding restaurants that typically have long waits can make a huge difference. Becoming more efficient at getting in and out of restaurants makes a difference. The faster you can deliver, the more you can earn.

6. Expenses

As an independent contractor, you are doing this as a business. Your contract says that you are contracting with Uber Eats as a business, not as an employee. You pay taxes as a business. You’re on your own for your costs of doing business.

Why’s this important? When you’re running a business, the money you get from Uber Eats, customer tips, from the Grubhub and Doordash apps and others is NOT what you are earning.

Your profit is what you earned. It’s what’s left over after your expenses that matters.

If you drive your car to deliver, there’s a pretty significant expense. Expenses vary by types of vehicle, but they go far beyond just the cost of fuel. Every mile you drive brings you closer to replacing tires, timing belts, and all sorts of other vehicle maintenance. Each mile you drive means your car is worth a few cents less.

You will pay those costs eventually. If you deliver a lot, you’ll wear your car out. You must take all of that into account when asking what you are earning.

Everything else in this list of factors is stuff that increases earnings. This is about not taking away from your pay.

It’s important that you know how much it costs to use your car. It’s rare to total out less than 30 cents per mile. Understand that for every mile you drive, you are reducing your earnings. Figure out how to drive less and you can increase your bottom line.

How much do Uber Eats drivers make? Measure it in Profit per Hour

Here’s where you add it all up.

It’s adding up all of the base pay fees, trip supplements, incentives and tips. Figure in how many deliveries you’re getting done per hour. Then subtract the cost of running your car.

Figure out your profit per hour. Add everything you earned, subtract your expenses, then divide by the number of hours you worked. That’s the best way to measure how you’re doing.

Once you understand your profit per hour, then you can compare it to traditional salaries. Your profit per hour gives you a good handle on whether you’re making a decent amount, or if it’s less than you might have thought.

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