If you drive for Uber, are you really making money or just selling them your car a piece at a time?
In an earlier posting about pizza delivery, I opined that it really wasn't that great a job. Desperate people take these kinds of jobs and hope to make some extra cash, as I once did. If you wreck your car, you may find that the damage isn't covered under your collision insurance - which is written for non-commercial use, only. Want a commercial policy? That would cost you a ton of money.
When I worked for Domino's, and asked them about this, the manager's response was, "Well, don't tell your insurance agent!" which was less than helpful. And as I recounted, a young friend of mine wrecked his brand-new Jetta, and the insurance company refused to pay out the claim. Only 36 more payments to go, on a car that was in the junkyard.
But what about Uber? Surely, that has to be a good deal, right? Maybe. Maybe not. I opined in an earlier posting that Uber was basically a shitty job - driving a taxi - made shittier by Uber. Getting hard numbers about how much money you'll make is hard to do. This Uber site talks about a lot of things - including how they provide liability and "contingent" collision and comprehensive insurance. But in terms of specific dollar amounts earned, it is very vague. It just says "click here to sign up!"
This Time/Money site is also less than helpful, but provides dollar amounts, from surveys, in terms of dollars per month, and dollars per hour, but not dollars per mile. The latter is more important in determining whether you are actually making money at this gig. Cars cost money to own and run, and people have a naive notion that the cost of gas is the only cost in running a car. As I noted in another blog posting, it can cost $8,000 a year to run a $25,000 car - something that a lot of people simply don't see coming. You can figure on about 50 cents to a buck-per-mile to drive your car, according to the AAA. And if you are being paid $15 to drive someone 15 miles, you really aren't making much money in the deal.
The Time/Money article does provide this interesting insight:
Campbell recently conducted his own study, which polled 1,150 drivers from both Uber and Lyft. He found that the average Uber driver made $15.68 per hour before factoring in expenses like gas, maintenance, and depreciation. (Lyft drivers in the survey made $17.50 per hour before expenses, and reported much higher satisfaction than Uber drivers.) The study also revealed an interesting breakdown that showed hourly earnings on Uber and Lyft deteriorating by age.
Let's assume an average of $15 an hour for an Uber driver, and for every hour "on duty" he is driving 50% of the time. The average car drives about 30 mph between combined city and highway traffic (at least according to the trip computer on my old BMW). In city traffic, the average might be only 15-20 mph. So if you figure for every hour worked, you are driving half the time, an average of 20 miles an hour, or about 10 miles. That means you'll spend anywhere from $5 to $10 just on car operating costs. Your "wage" for driving would be anywhere from $5 to $10 an hour - or about what you'd make at Wal-Mart.
Now granted, you might make more on "surge" pricing, and if you drive more, you might make more. But the more you drive, the higher your car costs are - at least the variable costs. And the problem with driving the car more is that the more miles you put on it, the more it costs you in terms of depreciation.
Worse yet, Uber promotes leasing deals so you can lease a car and drive it for Uber. Problem is, most leases have mileage limits, and taxicabs (which is what you are) can put hundreds of thousands of miles on the odometer within a few years. You might end up paying more than you are making, driving that additional mile.
Again, it is difficult to figure out exactly what the numbers are - the Uber site is specifically vague in that regard. Needless to say, no one is getting rich driving for Uber - or Lyft for that matter. It is a job you take when all other options are not available, or you need that second job to make some extra cash. And by "extra cash" it seems to be about $300 to $350 a month - hardly enough to cover a car payment!
Whether it is worth it or not is something you might be thinking about the first night some drunken patron barfs all over the back seat of your car...