Driving for Uber and Lyft: The Real Pros and Cons of Being a Rideshare Driver
by Alex Berrios Jr.
Increasing one’s income is a useful method to meet financial goals, especially if you’re struggling to cut expenses. Fortunately for us,technological advances have brought about the so-called gig economy.
Gig Economy – economic activity that involves the use of temporary or freelance workers to perform jobs typically in the service sector
Merriam Webster Dictionary
Freelance work is irregular on-demand work. Today the technology exists to efficiently transform snippets of idle time in even the busiest schedules for paid work. The internet has exponentially increased our ability to communicate and conduct business with new customers. Take advantage of free time to supplement (or replace) your income stream.
I’ll go through my firsthand experience with the popular ride sharing and restaurant take-out delivery platforms Lyft, Uber and Uber Eats. I hope that sharing my experience may inform you on how best to integrate a side hustle into your busy schedule.
I was chasing the American dream. Get married, buy a house, make babies (not necessarily in that order.) When I realized buying a house took more funds than I had (plus a less than ideal debt-to-income ratio), I found driving for Uber and Lyft to be convenient side hustles.
My strategy was to budget for my necessities bills and food with my main income. The extra money coming from the side job would go towards saving for the house minus the cost of operating and cleaning the vehicle. I was surprised by some benefits and drawbacks.
Soon after a few days ride-sharing with customers the known benefits I had in mind, extremely flexible schedule, and extra cash were realized. But I noticed other benefits I couldn’t have imagined beforehand.
Taking advantage of surge pricing.
Driving during a busy Friday or Saturday night you not only multiply the earnings during peak demand (last call!) but also means you’re not participating in the normally budget-destroying partying oneself. A carefully timed evening nap after home-cooked meals, and you can make fewer hours more profitable and avoid spending money going out.
Both platform applications (Lyft and Uber) were pretty intuitive despite the occasional bugs and glitches. Lyft stands out as the first to implement the feature allowing riders to tip drivers. (Fun fact, my partner at the time was tipped significantly more than I was, despite the fact that my car was cleaner and had more perks (bottles of water and mints). Personality goes a long way.)
Additional features like instant cash out meant that if I had an unexpected budget shortfall, or wanted to get some cash in the tight days before payday, I could drive a few hours and make the money needed to meet that urgency.
The added value of experience
Another cool aspect that I didn’t think about was just exploring different parts of my region. Those nooks and crannies in your town can reveal your next favorite restaurant, park or point of interest. If you’re like I was and contemplating your first home, with rideshare driving you get first hand experience visiting potential properties in other parts of town.
You’ll also gain unexpected insights into those neighborhoods. For instance, I experienced diverting around flooded streets taking a rider to their destination in a hip part of town. Sudden deal-breaker for a neighborhood I previously thought ideal.
Additional financial incentives
Take advantage of program incentives. Surge pricing mentioned before is the most common one. Referrals were easier to come by when Uber and Lyft were relatively new platforms. I made quite a bit of money through referrals by simply tapping a few buttons on my phone to share my referral code.
Don’t be “that guy” and spam your friends and family though. Challenge bonuses are meant to get you to drive more often rewards available for meeting a particular goal such as “complete 30 rides in one week.”
Another is the car leasing, referral bonuses, and challenge bonuses.
Leasing through your rideshare
The program involving car leasing is available to those that want to put fewer miles on their personal car, ones with an unqualified vehicle (broke-down, too old, etc.), or for drivers that don’t own a vehicle. You have a built-in gig with increased income if you buy through these programs.
Being more intentional with downtime
Rather than driving aimlessly through town adding uncompensated wear and tear on your vehicle and burning gas (or electrons for you EV folks) you can park near population centers and use the slivers of time between rides to catch up on studying, reading, or making phone calls to friends or family.
While driving you could listen to music, podcasts, and audiobooks. That would depend on the rider. Often, I discovered new music or podcasts by listening to rider-requested content. I met interesting people and had very memorable conversations driving.
Pro tips: Best way to make bank while driving
I learned that a series of closely timed short rides (5 minutes and under 5 miles) and really long rides (20+ miles and 30 or more minutes) were the most profitable. The medium distances were not the best moneymakers in my experience. In larger cities, you can pick up multiple passengers through UberPool increasing your productivity.
The thing is with more passengers come more problems. I preferred to deliver food in the end for reasons I’ll get into later. But through Ubereats, you can also take multiple orders on one “trip”.
The downside of being a rideshare driver
There are some drawbacks. I’ll briefly cover the obvious ones.
Major vehicle repairs can easily cancel a significant portion of the revenue you generate from ride-sharing. Regular maintenance will occur more frequently. Tires, oil changes, brake pads, cleaning, and very importantly, the time it takes to complete those tasks are your uncompensated responsibility. Fuel is an operating cost you will feel immediately and you will soon learn where all the cheapest gas is available and top off the tank each gas stop.
Don’t risk driving without commercial insurance. In some states, this is offered through the rideshare platforms, but like insurance in general, your coverage requirements will depend on location. Admittedly, your insurance rate will be a bit more expensive (eating into profits) but not nearly as expensive as an accident without it.
The surge pricing typically happens at times that are inconvenient.
If you are a morning person, I suggest picking up work commuters in the morning and delivering Uber eats at lunch. Night owls can burn the midnight oil (or 87 octane) picking up passengers leaving restaurants and bars at night.
If you are not careful, you can easily start to drive up a sleep deficit or at least throw off your normal sleep schedule, making the side-hustle not worth the costs to your health. Consistent sleep is not just important for babies.
Leases are too good to be true.
Often you can get better rates for leases and car ownership by going through credit unions.
The ridership can vary with the seasons. You may have to travel far to the nearest large airport or sports venue and not being able to rely the a steady stream of income can stress you out if you rely on it as your primary source of income.
Safety is a concern, even for pro athletes.
We have all seen the drivers attacked by unruly passengers. Late-night intoxicated passengers can be the stuff of nightmares.
My horror stories include disrespectful smokers, fast food accidents, shoes on the dash, and vomit.
There’s always the option to avoid people almost entirely while you’re driving.
My preferred paid trips while driving were for Ubereats. With expanded offerings from DoorDash, gig work related to driving doesn’t have to flex your social bones. Skip the humans and cart the food. The only downside I could find there? My car smelled funny.
Don’t let the cons outweigh the pros. I often drove a couple hours and then took my now wife out for dinner. Too often, I plugged a hole in my budget to get some quick cash for one thing or another. Always keeping the end goal in mind, I ultimately saved for my first home.
I can easily see myself driving again to generate cash for home improvement projects. I recommend everyone with a car to give a shot for a time. Reduce that debt or save for vacation, all the while you learn about the humans near you and drive past many places you never thought you’d see.