How Much Does an Uber Driver Make?
Ride-share companies are becoming more and more popular all the time, and the two most popular ones are Uber and Lyft. The concept is very simple. Riders download an app onto their phone and when they need a ride somewhere, they just tap on the app and schedule their ride. Uber’s official first ride took place in San Francisco in 2010, and the company has grown by leaps and bounds since then. For people who work for Uber, it’s a great job because you can work when you want to work, but how much money can you actually make as an Uber driver? Just how much does an Uber driver make in the United States?
How Uber drivers pay breaks down
One of the first things you’ll notice about being a driver for Uber is that the “salary” you make is easy to figure out ahead of time. First of all, Uber charges its rider a certain amount based on the time of the ride, the mileage, and the location of the rider. Uber’s pay period is from Monday at 4 a.m. to the following Monday at 4 a.m., and drivers get paid via direct deposit either on Wednesday or Thursday. Once the costs of the rides are added up, Uber takes a 25% cut from each of the fares, and the rest belongs to the driver.
With Uber, you are a contract or “1099” worker, which means you are not an official employee of the company but instead work on a contract basis for them. This means you will not have any taxes or Social Security taken out of your check each week. If you made $216 in the past week, for example, your check will be in the amount of $216. This means you’ll have to pay the taxes yourself come tax time. When you get your paycheck, it will include all fares plus bonuses, promotions, and reimbursements.
According to Indeed, in 2020 the average Uber driver working full-time made $30,557. When you consider that this is not a standard, traditional job, that is not a bad salary at all. In addition to the salary, you also have to consider that you can work when you want to work because you’re your own boss, so this isn’t a bad deal at all. Uber also gives drivers chances to make extra income on a fairly consistent basis, including special promotions and contests, as well as extra incentives when the number of available drivers is low or during certain times when extra drivers are needed.
Of course, it is difficult to pin down a specific salary since there are so many factors that come into play when it comes to how much you can make. For one thing, each city has its own pay scale, and drivers in bigger cities make more money per-ride than drivers in smaller cities. You also get paid a little more for driving at certain times; for instance, during rush hour when people are trying to get to and from work, on Friday and Saturday nights, and on special events.
Uber driver paycheck breakdowns
To give you some idea of what your paycheck will look like when you get paid by Uber, here are a few terms you might like to know:
- Cancellation fee: a $5 payout if the rider cancels a request after two minutes or you have to wait five minutes for the rider to show up.
- Fare corrections: this is the amount, if any, that Uber pays you for what they owe you.
- Fare: the amount of money you received on the ride, not including Uber’s fee.
- Long pickup fee: small fee for when you have to pick up someone far away; for example, 10 minutes away.
- Other payments: these include referral bonuses, as well as incentives, promotions, and guarantees.
- Other: line item for fare corrections, cleaning fee, and miscellaneous reimbursements. It includes reimbursement if you have to clean up after a rider who’s made a mess in your vehicle.
- Rider fee payment/deduction: you collect the rider fee from the passengers and Uber collects it from you.
- Surge: additional earnings from Surge rides.
- Tolls: these are reimbursements for any tolls you had to pay while driving a passenger around.
- Total payout: this is how much will be on your next direct deposit.
- Uber fee: the fee taken out of your earnings by Uber.
- Wait time: small, per-minute amount that starts accumulating after you’ve waited for a passenger for two minutes.
As far as bonuses go, there are two basic types:
- Driver referral bonuses: Uber calls these referral rewards. To get this payment, riders have to sign up using the promo code that you gave them, and they have to complete a certain number of rides. After that happens, you will see this amount on your paycheck. It is a total amount associated with all riders who have done this since your last paycheck.
- Passenger referral bonuses: Uber calls these rider acquisition rewards. These are the $5 bonuses you get when a rider enters the promo code and takes the required number of rides.
Bonuses do not always come in right away. You may have to wait a week or so to see them on your paycheck. Nevertheless, they will eventually be there, and you can view them by visiting partners.uber.com.
Speaking of partners.uber.com, this is the site you’ll visit for anything related to your paycheck. You can enter or edit your bank information, view your earnings in detail, check on any bonuses you’re expected to receive, and perform any other action you’re interested in taking. Uber has this information available by Wednesday or Thursday of each week. If you don’t see your information by late in the day on Thursday, something may be wrong, so you should contact Uber to get the help you need.
One more thing – if for some reason you are unable to log into your account, it might mean that your account has been deactivated for one reason or another. If that happens, just contact Uber and they can help you get back on track.
Back to the Money!
In some markets, Uber allows you to get your money a little faster with something called Instant Pay. It is essentially a debit card, and it allows you to transfer your earnings into this account any time you want, even if “payday” hasn’t arrived yet. Again, it isn’t available in all areas, but if you’re interested in this option, you can look into it on the Uber website.
Not counting UberEats, which is a meal delivery service, here is how your pay is calculated each week:
- Base fare plus the amounts you earn for how long and how far you end up driving. All per-minute and per-mile amounts are different depending on where you live.
- The Surge pay is calculated during times when drivers are in high demand. When there is a shortage of drivers or when a lot of rides are expected to be needed, prices automatically go up, which means so does your pay!
- Finally, any additional pay is added, such as additional passenger pickups on pools, on minimums for short trips, and while waiting for riders.
If you’re curious about tips, here is the good news – as the driver, you get to keep 100% of your tips. There is no fee taken out of these tips, so you keep the entire amount!
If you’re curious about the average salary in the United States, most full-time drivers tend to earn between $30,000 and $44,000. The lowest salary is roughly $24,000 per year, while the highest is around $51,000. A lot of your pay will depend on any bonuses you get, when you drive (for example, during rush hour, holidays, and so on), and of course, the city where you live. Of course, you can drive part-time if you like, and the per-hour salary averages anywhere from $15 per hour to $40 or even $50 per hour. Full-time drivers average $20 to $35 per hour or more.
Still, all of these salaries are good when you compare them to the salary you’d make flipping burgers or making tacos at your local fast-food restaurant. Add to that the fact that you can work when you want and all you really have to do is drive around in your car all day, and it’s easy to understand why being an Uber driver is something so many people love doing.
Now for the Not-So-Good News
There isn’t any actual “bad” news when you’re working for Uber, but there are some things you need to know. For starters, you are responsible for the upkeep and maintenance of your vehicle, as well as the gas. Uber does not reimburse or pay for any maintenance, repairs, or gas that is required to operate your business. You can, however, deduct part of these expenses off of your income taxes each year. The IRS allows you the following deductions:
- Per-mile fee for your mileage, which is 57.5ȼ per mile for 2020.
- A portion of your cell phone bill, since you need this to conduct your business.
- A portion of your maintenance and repair bills on your vehicle.
If you check with your accountant, you might be able to deduct part of your home office if you have one. In fact, it’s a good idea to check with an accountant before tax time arrives because home businesses can deduct a lot of their expenses, and this can save you a lot of money on your taxes.
The important thing to remember is that the upkeep of your vehicle is something you alone are responsible for, as is your cell phone bill because this is how you get your jobs each day. Even though you can deduct part of the expenses on your income taxes each year, these are still expenses you have to pay for upfront, so this is something you need to be prepared for when you decide to become a driver for Uber.
Other Opportunities with Uber
Uber offers other opportunities for drivers as well, including UberEats and special services for businesses and other specialized services. If you are currently an Uber driver and you’re interested in exploring other opportunities with them, it is easy to do so. Just check out their website or contact them for additional information. Uber started out as an easy way for people to get rides at the spur of the moment without using a commercial taxi service, but it has since become so much more. Uber benefits drivers as much as it benefits its riders, which is why the company has grown so much since it offered that first ride in 2010.
When it comes to being a driver with Uber, you will of course have to meet certain requirements, including having a four-door vehicle that is of a certain age, having experience as a driver, having the appropriate state-required insurance on your car, and being a certain age. You can click here to find out more about being a driver with Uber. Most Uber drivers love their jobs and consider it well worth their time, so exploring their opportunities further is a great idea if you’re looking for either a full-time job or a job that will supplement your current income.
Uber drivers earn above-average wages for either part-time or full-time work. The money they earn is way above the minimum wage, and you do not need a college education to get the job. You do have to be screened for the safety of the passengers, but for most people this is a simple process that involves a background check, and it usually only takes a day or two to complete. This means the time from signup to accepting your first ride could be just a matter of days.
If you are looking for a job and you love being in your car, you might want to consider Uber as an option. Their website will provide all of the information you need to get started, and of course, you can contact them at any time with any additional questions you might have.