How Much You Spend on Driving
As we mentioned earlier, Uber drivers are independent contractors. That means that you’re responsible for paying for all of your own expenses – as well as your taxes. Your expense list includes things like gas, car payments, vehicle maintenance, and insurance. Other items, such as snacks or water that you provide for passengers, are also part of your operating expenses (though in many cases, providing those amenities results in larger tips).
When you work as an independent contractor, you’re essentially your own boss. Uber will not withhold taxes for you. In other words, instead of getting a tax refund at the end of the year, you’ll have to pay income tax.
There’s one other thing to keep in mind:
Your weekly pay from Uber is NOT all profit. Some of your earnings are just reimbursement for gas and other expenses. If you spend $20 on gas during a shift, you’ll have to make $20 just to break even. Luckily, the IRS standard mileage deduction allows you to deduct $0.58 per mile on your taxes. So if you drive 1,000 miles this year, you can deduct $580 in mileage expenses. If you drive 10,000 miles this year, you can deduct $5,800.
5 Ways to Double Your Uber Earnings
Let’s assume for a moment that you’re the highest-paid Uber driver out there (wouldn’t that be great?). Even then, you’d probably still be open to earning more money. Fortunately, there are a few things you can do to put more cash in your pocket each week:
1. Work for Multiple Rideshare Services
One of the best ways to increase your earnings is to work for more than one rideshare service. It might be tough, but plenty of drivers have mastered the art of driving for Uber and Lyft at the same time. Whether you’re a rideshare driver or a delivery driver, the trick to making money is to stay busy during your shift. But as I pointed out above, some hours are extremely slow. By working for more than one rideshare service, you’ll double your customer pool and increase your chances of finding someone who needs a ride. When one service slows down, you can open the other app and look for passengers there.
2. Drive During Peak Times and Earn Surge Pricing
The more flexible you are with your schedule, the more money you’ll make. Focus your efforts on driving when customers need rides. By working In the morning, during the evening commute, and late at night, you can increase your profits significantly. Of course, that’s not to say that you can’t pick up some rides throughout the day. But if you want to stay busy for your entire shift, peak hours are the best time to drive. Also, Uber tends to offer Surge Pricing during big events, so be aware of those. Make sure you know when concerts, sporting events, and conventions are taking place so you can profit off them.
3. Take Advantage of Promotions and Referrals
Uber offers a number of promotions to incentivize drivers to work more. Most of these promotions are reserved for new employees, but some are open to current drivers. With the Quest promotion, for example, you can earn extra money by completing a certain number of trips within a given period. One Uber Quest might give you a $50 reward for completing ten trips within a weekend. If you’re already driving anyway, there’s absolutely no reason not to embark on the Quest. There’s also the Boost promo, which works a little bit differently. With Boost, you’ll have to drive in specific areas during a particular time. Boost promos work in multiples – meaning that you can get a 2x or 3x boost just for doing a ride you would do anyway. For instance, if you do a $10 trip in a boost zone with a 2x boost, you’ll earn $20 for that ride.
Keep in mind:
Boost promos are different from Surge pricing. If the Surge price is higher, you’ll earn the Surge pricing rather than the Boost fare. And don’t forget about the Uber driver referral program. You can earn bonuses just by getting new drivers to sign up with your referral code!
4. Adjust Your Expenses
Cutting back on expenses can have a huge impact on your bottom line. If you spend less on gas, insurance, and car payments, you’ll put more money in your pocket each week. Whenever possible, drive close to home. You’ll save on gas and put less wear and tear on your car. Try to start and end your day working in the neighborhood you live in.
Also, don’t waste gas driving around waiting for a ride request to come through the app. Instead, make yourself available when you know it’s likely to be busy. If a certain time of day is consistently slow in your area, don’t even bother working during it.
When we talk about adjusting expenses, we’re not just talking about reducing them. Depending on where you live, it may be worth it to increase your expenses in order to earn more money. For example, if your car only meets the requirements for UberX, you might consider investing in a better car. That way, you can drive for a more expensive service, such as Uber Black or Uber Black SUV. It’ll certainly add a few bucks to your monthly expenses, but a vehicle upgrade can help you earn much more money.
5. Maximize Your Tips
Any rideshare driver will tell you that tips are very important. In fact, tips will probably make up most of your income. One great thing about Uber is that the company lets drivers keep 100% of their tips. If a customer pays you gratuity, it’s all yours. A lot of people even tip in cash, so you could go home with money in your pocket! But, you have to make sure to earn those tips. Take extra measures to show your customers that you deserve a few extra bucks.
There are a few ways to increase tips.
First and foremost, be courteous. Stay off your phone, keep the music to a reasonable volume, and engage in conversation (if it seems like they want to chat). A little bit of courtesy goes a long way, and making a personal connection is the best way to get a generous tip. Also, provide your passengers with extra like water, gum, candy, snacks, or mints. You can write this stuff off on your taxes, and your customers will appreciate that you went the extra mile to make them comfortable.
When it’s all said and done, most Uber drivers earn around $14 per hour. Sadly, about half of the $25 per hour that the company claims you can make. However, there are a few ways to hit that $25 mark:
- Drive in the busiest neighborhoods and work during peak hours to get as many Surge rides as possible.
- Keep an eye on your expenses and remember that the money Uber pays you is not all profit. You still have to account for car-related costs and pay taxes at the end of the year.
- To double your earnings as an Uber driver, hustle as hard as you can by working for other platforms at the same time. Take advantage of promos, too, and refer other drivers to earn extra bonuses.
Obviously, you’ll have to provide strong customer service to maximize your tips.
If you’re thinking about signing up to drive for Uber, know that you’re probably not going to earn even close to what they say you will. Know what to expect and you won’t be disappointed. After all, Uber was not created to provide millions of drivers with full-time jobs. But if you know what you’re doing, it can certainly be a profitable side hustle that helps to pay the bills.