Everything you need to know about making money with Uber

Written by Emma Kansiz

Published 2022-07-05 / 4 min read

I’m sure that Uber needs no introduction. Whenever anyone mentions the phrase ‘gig economy’ or the rise of flexible work, Uber is one of the first companies that comes to mind. The word has entered the public consciousness in just a few years. But what is it like in front of the steering wheel? Sure, Uber is worth the hype for customers; but is it worth the effort for potential workers? In this article we are going to dig further into what Uber offers for potential freelance drivers and whether or not it is a good option for your side gig.

What is Uber?

Uber is a rideshare company founded by Travis Kalanick and Garrett Camp in 2009 in San Francisco, California. It revolutionized ride sharing and nearly obliterated the taxi industry in several major cities. In less that fifteen years Uber has become the go-to option for riders around the world, inspiring many copycats. According to Uber’s own data, there are over four million drivers across the world. In 2018 they reported that on average there were 14 million uber rides taking place around the world - every single day!

How does Uber's earning structure work?

Now for the fun stuff, right? Earnings through Uber can vary wildly. Depending on where you live you can make a full-time income if you make Uber your full-time job. Most drivers earn $5 to $26 per hour after factoring in gas, maintenance costs, and taxes. Uber also takes a portion of each fare, called a service charge, which varies depending on different factors like the length of the trip or the time of day. Uber is exciting because there are options to make a healthy income by driving during Surge periods (periods of peak demand and low supply) and by waiting for fares near the airport or after sporting events and concerts.

Uber sometimes offers promotions where you can earn a bonus for doing a certain amount of rides. If you live in a tipping culture like the US or Canada you can also turn on the charm to make a few extra dollars. If you’re doing hundreds of trips a month, small tips can add up.    

You are responsible for gas and maintenance costs as an Uber driver. Uber will pay for tolls that are taken during your ride. The tolls will be covered by the customer and reimbursed to the driver. Uber does cover damage done to the car by the customer, like vomiting or food and beverage spillage. Uber will assess the costs and then bill the customer for the damages done to the car. The money collected will go to the driver, which offers a measure of comfort to drivers who are on shift on weekends or after special events when riders may be intoxicated.  

What is the time commitment for Uber?

Uber is fabulous for gig workers because it offers full flexibility. A lot of drivers make Uber their full-time job but you can dip your toes in and see how many hours work for you. Uber drivers can choose to work three hours one week, twenty hours the next, and not at all if other priorities take precedence. This makes it a wonderful option as a main side gig for busy workers or students. 

Uber drivers can also sign up with an eye to keeping it as a backup option for earning extra cash when the need strikes. If you want to work a few days a month to earn a bit of money from busy weekend rushes or concerts then you’re absolutely able to do so. For this reason Uber can be a great option if you want to designate your earnings from this gig for a certain purpose, like a vacation fund or a new electronic item. 

How to get started with Uber?

The sign up process for Uber is fairly intuitive and straightforward. To begin you can create a profile on the Uber website. The profile setup will ask you for your name, contact information, and whether or not you have your own car. The second step includes sending in your driving documents, proof of residence, and answering questions about your driving history. These documents will then be screened to ensure that you meet the legal requirements to become a driver. The background screening process can take up to ten days. 

If your documents are accepted you will be obligated to bring your car to an inspection center or for a vehicle inspection. Requirements for what kind of inspections are valid do vary from location to location. If the inspection goes smoothly, your account will be activated and you will be ready to activate the driver mode in your Uber app.  

Keep in mind that in addition to meeting the requirements listed above, there are also city regulations for vehicles that vary from place to place. Once you have signed up to drive, Uber will send you more details on the pertinent requirements for your location.

Uber requirements

Required Resources

Uber drivers need a car but not necessarily one of their own. Recently Uber has partnered with Avis and Hertz to allow part-time drivers to rent a car for their work. Some of their weekly rentals are priced as low as $260 a week. This is a great solution for people who want to drive full time but don’t want to pay upfront for a car, or don’t need a car in their personal life. That being said, there are also hourly rental cars that can be picked up on a more flexible basis through Kinto Share, Zipcar, and Getaround. Bonus? Insurance is included! 

Your car must also meet certain requirements pertaining to size, make, and year. If your car is an older model with high mileage in subpar condition - it simply won’t be approved. Uber only approves cars that are reliable and in good working condition. Some cities only approve cars that are under 15 years old. Your car must not have any commercial branding or logos on it. Uber requires you to have an inspection once a year or every 50,000 miles. Uber cars must have four doors. Drivers for UberXL must have six seats in their car and UberBlack drivers must have a luxury class vehicle.

You must also have a smartphone which will be the center of your universe as an Uber driver. Your phone is your portal for all activity while driving, including confirming rides, coordinating pick-ups, and communicating with Uber support. 

Required Skills

To drive for Uber you must meet the minimum age requirement to drive in your area. For prospective American drivers you must have one year of licensed driving experience in the States, or three years if you are under the age of 23. It should come as no surprise that you need to be legally eligible to drive in the country where you will be driving for Uber.

Required Documents

In order to begin the sign-up process you must provide your social security number to ensure that you are legally able to work. You must have documentation that shows that you are legally able to drive in your country like a driver’s license. You must show proof of residency in your city, province, or state. You must also show proof of vehicle registration and valid car insurance. Your car insurance coverage will vary by state, province, and country.  

You must also send in a driver profile picture. This picture must feature a passport-style headshot of the applicant with no additional individuals in the photograph. It must be a high-quality, clear photo with the applicant in focus. You must not wear a hat in the photograph.

Once you have amassed the required documents, Uber will ask further questions about your driving record and criminal history.

Other important details

As an Uber driver you are considered an independent contractor, regardless of how many hours you work. You need to set aside money for income taxes, retirement, and medical costs. Uber sends its drivers a tax summary, and if you have earned above a certain threshold, a 1099 form that you must include with your annual tax return. Currently, independent contractors are taxed at 15.3% of their income. Working for yourself necessitates disciplined planning of your finances. A budgeting tool or spreadsheet will be invaluable as an Uber driver. A high quality CPA can help guide you so you can write off certain business expenses.   

You will be driving more than an average office worker and your car will require more frequent maintenance, oil changes, and tune-ups by extension. It is important to put aside money every so often for vehicle-related expenses so you’re not caught off guard by any repairs or issues that crop up. Keep in mind that Uber does not reimburse you for fuel costs and as gas prices continue to rise you will have to be strategic when accepting rides. If a fare is fifteen minutes away, for instance, Uber is not going to cover your gas costs for the ride there, and you won’t be getting paid either. 

We also suggest looking at your regional requirements with a fine-tooth comb. Some states, like New York, require you to have commercial car insurance in order to drive for a ride share company. Factor this into your startup costs if this turns out to be the case for your region. 

Uber does offer an in-house car insurance but it is only valid while you are signed into the app on driver mode. If you are logged in to the app but not currently driving a passenger, Uber covers third party liability if your personal auto insurance doesn’t apply. The coverage includes $50,000 in bodily injury per person, $25,000 in property damage, and $100,000 in bodily injury. When you have a passenger in your car your third-party liability insurance limit is one million dollars. It also covers comprehensive and collision coverage following payment of a $1000-$2500 deductible if the driver has personal comprehensive and collision coverage. 

Our review

Uber is at the heart of the ‘gig’ or ‘sharing’ economy and for good reason. It was one of the boldest and most ubiquitous companies to take advantage of the business model. Because it has such an extensive presence worldwide, Uber has a fairly consistent set of best practices and structures. Uber is a good entry point into gig work because it is intuitive and generally transparent once you have been approved as a driver.

It is a great option for city dwellers who live in busy, high-density areas where there will always be a high demand. You can earn money in the early morning hours, after-work rush hour, and on weekends. Traffic to and from the airport can be pretty consistent as well. Uber is a great strategy for those who live in smaller towns to medium sized cities as there is significantly less competition and demand on weekends and for special events can increase your profit margin substantially.

It is important not to have rose colored glasses when approaching your new side gig with Uber, however. Most drivers will tell you that in order to make consistent income you have to be willing to drive for long hours. These hours may be inconvenient for you and your social or family life as well, for instance early mornings during the week and super late nights on weekends after bars and nightclubs close. It is important that you create a schedule that accounts for your other interests, responsibilities, and commitments. You want to ensure that Uber is adding to your life, rather than detracting from it. With this in mind, it is also important to remember your health. As an Uber driver you will be sitting for long periods of time and it is no surprise that convenience foods found at gas stations and takeaway joints are not exactly nutrient-dense. Prioritize getting out to stretch or go for a walk, and ensure that you bring some healthy food and water with you so you can remain alert during long shifts. Happy driving!