If you want to make a bit of extra money on the side, or want to take control of your working hours and pay, working for an Uber could be a great option.
Uber drivers operate in what’s known as the sharing economy, where services are provided peer-to-peer. This results in convenient, affordable options for customers, and flexible employment for drivers.
However, although as a driver you may benefit from flexibility and having the ability to charge a higher hourly rate, there are many other costs that you may have to take into consideration – unlike typical employment, many of these additional costs will not be paid by your employer.
If you’re thinking about becoming an Uber driver, here are some of the hidden expenses you should be aware of.
How much does it cost to drive for Uber?
Unlike other jobs where your employer will often pay for your travel, maintenance costs and othe day-to-day expenses, when you work for Uber you’re technically self-employed.
This is great for people who want to have more freedom in their work, but it can place a significant financial burden on many drivers.
Not only will you have to think about the cost of running your car, but you also need to factor in unexpected costs that you could incur from traffic accidents, breakdowns, and potential repairs.
All Uber drivers are responsible for the maintenance and upkeep of their vehicles. The only time they will receive some type of reimbursement from Uber is if one of their customers causes damage to the vehicle.
Vehicle maintenance costs can involve anything from paying to get your vehicle cleaned, fixing minor repairs, or replacing tires.
As an Uber driver, you will also have to pay for all of your fuel – and you won’t be able to receive any form of reimbursement for the money you spend on gas.
Depending on gas prices and the area you live in, some Uber drivers can expect to pay between $400–$800 a month on gas alone, making this one of the largest expenses that any new driver should consider.
If you want to legally drive on the roads, you will need to have some kind of insurance. Uber does provide their drivers with some insurance, but this does not typically include collision or comprehensive insuance at all times.
Many drivers may choose to apply for their own insurance to ensure that they are fully covered at all times.
The cost of your insurance will depend on your age, location and vehicle type. Most drivers can expect to pay as little as $6 a month depending on their insurance profile.
When you’re out on the road, you can’t always prepare for the different accidents or issues you may encounter.
From collisions and crashes, to general breakdowns, there are many situations you can find yourself in that could result in you needing to fork out some cash for repairs etc.
Although some situations may be covered by your insurance, you can’t always be sure how much you’ll have to pay of your own money. It’s a good idea to have some money spare so that you won’t struggle too much if you do find yourself in one of these situations. You may also want to add some accessories and customizations to make your car stand out on the road and deliver that five-star service. This can range anywhere from air freshener to a light so you can be seen at night.
How much can you earn driving for Uber?
Most Uber drivers will make between $8.55 and $11.77 per hour on average. However, these figures can change depending on your location. For example, in New York City, some Uber drivers are able to make as much as $26 per hour.
Drivers can also make extra money through tips, or can charge higher hourly rates depending on the time of the day and peak times.
You can also choose to work longer or shorter hours, depending on how much money you need to make, so there is plenty of room to be flexible.
Although some of these hourly rates may seem pretty high, you must also remember that these rates come before any of your expenses are deducted. Because of this, your true hourly rate as an Uber driver may be a lot lower than you think.
Is driving for Uber worth it?
Uber drivers must consider all of the different expenses they will be expected to pay while they’re driving and calculate whether it still makes financial sense to take on this job.
To figure out if driving for Uber is worth it in your situation, you should consider how much you’re charging per hour, and the cost of your expenses every hour. For exampe, if you’re earning $18 an hour and your expenses only amount to $1 an hour, you’re still making above minimum wage.
However, on the other hand, if you’re making the same hourly rate, but your expenses amount to $10 an hour, that’s a significant proportion of your income that you’ll never see.
Your expenses will also largely depend on your vehicle. If you have a new, fuel-efficient car that doesn’t cost much to run, your expenses will probably be far lower than someone driving an old car that requires a lot of maintenance and fuel.
Ultimately, figuring out if driving for Uber is worth it for you will depend on your own personal situation.
Belt up and get driving!
Being an Uber driver is a great career choice for many people as it provides a level of flexibility and control that you’re unlikely to find in more traditional roles.
However, there are also a lot of different expenses that you have to consider, the main ones being general vehicle maintenance, fuel and insurance.
These costs will not be covered by your employer, so it’s important to budget for these when planning your working hours, or organising how much money you have to spend every month.
If you work out how much money you have left over after the costs of all the vehicle maintenance, and driving for Uber still makes financial sense for you, it’s time to belt up and prepare to pick up your next customer!