Before we discuss the salary that an Uber driver expects to get, let's take a quick look at the latest court settlement that was brought against Uber for docking excessive fees from driver's pay.
2,421 drivers were represented in a $3 million settled call action lawsuit, when drivers claimed that Uber breached the contract for including sales taxes and "black car fund" fees, which increased the Uber service fee, reducing the driver's pay considerably.
The case also accused Uber of misrepresenting their driver's salary levels when stating that drivers could "drive and make $5,000 guaranteed" in the first month when driving for Uber.
The settlement was issued on 29th December 2017 and is valid if the claims are dismissed including those that drivers are anything but independent contractors.
Why did we start this article on this note? Because there have been so many issues related to Uber driver's salary, that it was important to show everyone that your salary calculated here can be affected by other forces, which might require legal action.
How is Uber Driver's Pay Calculated?
An Uber driver's pay is a straightforward calculation based on total fare less Uber fees, less expenses, and end of the year taxes(Federal, Social Security and Medicare.) The salary is based on the miles and hours you drive, where the miles are more important, but time is a factor that can affect your pay performance. The number of hours will affect salary, so expect to earn more when driving more frequently. Where you drive also sets the tone, and when you drive during busy hours can add surge pricing. The car you drive sets the category, and you can earn more from less driving if you are an UberBlack driver than an UberX driver.
Bottom line, the average pay per hour is also dependent on which city and state you drive in. However, the basic pay per hour differs when asking different sources, such as SherpaShare or Earnest Loan , and Harry, the RideShareGuy. These three sources provide different results. Let's take a look at each one and then add a fourth, our findings.
Market Research on Uber Driver Pay
Earnest provides us with some interesting facts about Uber and people who are part-time working. The provision that Uber states that you make $5,000 must relate to a full time five-day shift job, since Earnest's findings show us that the average income for an Uber driver is only $364 a month.
What Earnest did find is that 85% of all Uber drivers are part-time, and make less than $500 per month. Their study covered the gig economy industry and included other services, such as Airbnb and Postmates, not just ride-sharing companies like Uber and Lyft.
Since we do not know how many hours the average driver drove in Earnest's study, we can only use it as an indicator when looking at other sources and using our own evaluation. This would point to an average monthly schedule of 24 hours, or 0.77 hours per day, which points to most Uber drivers only working realistically 3-4 days a week, which gives us an average of 1.4 hours a day. Since this is the Salary from net driving or Period 3 driving, we can estimate that the average Uber driver works 2-3 hours a day for 3-4 days a week.
TheRideShareGuy, Harry has performed quite a few studies of the rideshare sector, and his research has led him to publish the hourly pay for Uber drivers at $15.68 per hour. He also estimated that the higher income brackets were based on where and when drivers were active. He also provided a graph of pay based on drivers age.
SherpaShare made a comprehensive study of the US rideshare industry and produced a comprehensive map of pay. It shows the difference in earnings for Uber and Lyft drivers across the US. Since the industry is constantly fluctuating, these figures will change on a constant, monthly basis.
Our research considered all the above factors but added one important fact that all research discounted, the cost of car purchase. In industry, the capex (capital expenditure) is one of the most important value that determine production costs. The same with driving, the gas might be important, but the cost of the car, as well as its depreciation, are even more important. By figuring in only depreciation, the calculations give a false result. That is why we present the following calculation that considers the purchase price of an economical vehicle and factor in average Uber fees and expenses, as well as a workload.
Rideshare salary is made up of three sections;
- Booking Fee
- Pay per mile
- Pay per minute
The booking fee is a set figure; the miles are also basically set by the navigation route; the only changeable variable is the time it takes since traffic can change a five-minute drive to a half hour drive. However, the income for a minute is much less than from a mile, so there is a trade-off that makes driving during congestive hours not a good solution to increase pay. It is better to drive more fares as quickly as possible and rack up the miles or drive the same miles but be in a surge or boost price.
That is why it is best for the driver to pick a strategy that suits their lifestyle and salary levels.
Here is a quick comparison of two days, showing the impact of driving in congestion against driving in a car-free environment.
Hours of driving: 3
Miles drove: 80
Number of rides: 8
Gross pay: $54.60
Gross Pay per hour: $17.43
Take Home pay after Expenses: $37.00
Net Pay per hour (before Tax): $11.81
Hours of driving: 4
Miles drove: 76
Number of rides: 12
Gross pay: $78.67
Gross Pay per hour: $19.50
Take Home pay after Expenses: $62.00
Net Pay per hour (before Tax): $15.37
As you can see, there is an extreme difference between the two, while Friday produced more pay from the same number of miles in comparison to Tuesday. This was due to Surge prices; surges are great ways to increase income. Also, the time driven on Tuesday was a relatively slow time with lots of congestion, so the miles were the same, but the time took we longer, making the salary lower.
Rideshare Salary Averages
Based on standard figures but without factoring in surges and boosts, the average income per ride (when miles and time are average too) are:
Uber Booking Fee: $1.65
30-minute ride, 15 cents per minute: $4.50
9 miles ride, 90 cents per mile: $8.10
- Total Passenger Fee: $14.25
We now get an average gross pay per mile of $14.25, now let's calculate the expenses.
Rideshare Expense Averages
Expenses are calculated per annum and then aggregated to per mile.
Expenses calculated per mile for a Toyota Prius C 2017 model:
Car price: $24,686
Loan interest: 3.79%
Insurance costs: $1,350
Gallon of Gas: $2.35
Miles per gallon: 50
Car cleaning: $25
One-time Purchases per annum: $2,250
Total expense per mile: $0.31
The commission ranges between 20-25%.
Net pay calculations
Passenger Trip pay: $14.25
20% commission: $2.52
Expenses for 9 miles: $2.79
Total Expenses: $5.31
Net pay from this trip: $8.94
- Net salary per mile: $0.933
Average Driving Time Per Week
According to a study done by Benson Strategy Group and renowned economist Alan Krueger, the average rideshare driving hours are between 11 to 30, these account for 68% of the drivers, 14% drive under 10 hours and 17% drive over 40 hours a week.
Based on these numbers we can figure out the average income per percentile where an average of 18 miles per hour are driven, giving us the following income calculation:
$0.933 x 18 x hours = net per week, month and year income before tax.
These are UberX based calculations, so if you are driving UberBlack, SUV, Pool, Lyft etc., adjust the calculation accordingly.
As you can see, our calculation comes close to Earnest and the Harry's as well as SherpaShare, but gives you a detailed breakdown of expenses that will change radically based on the car you buy, how you buy it and for how long you intend to keep it.
Improving your Salary
How to increase your rideshare pay?
It's one thing trying to raise your rideshare rating; it's another thing trying to raise your income. There are a few tricks of the trade you need to learn and learn fast because these are the only ways of increasing your income. The rookie drivers tend to learn from the many articles that experienced drivers have posted, so the learning curve is easier over time. However, nothing replaces experience, and with all the theoretical knowledge you will still need to gain experience and feel the real street under your wheels.
When to drive
Knowing where to drive is key to success. Hitting traffic is not the worst issue, hitting traffic with no rides is. Going into lull areas and missing surges are terrible feelings, and driving around large crowd events at the wrong time is also a problem. Timing is a key issue and learning how to arrive is as important as learning to drive.
One interesting issue with timing is what time of the day to drive. If you are only working as a rideshare driver, then your hours are pretty much your own. You can decide to drive early morning or late-night hours, as well as drive during rush/peak hours too. Working the so-called early morning quiet hours can be productive, sure there are fewer customers, but then there are even fewer drivers. You will also get those early airport runs, which can be lucrative since they occur daily.
Driving on weekends and holidays is also a good source of pay if you are willing to be active on Christmas Eve, New Year or Halloween.
Driving late at night is a great time to catch all the bar crawlers and frat party goers, and by watching the social media and reading up on local activities, you can find out when a major crowd event will occur.
Where to drive
Once you know when to drive, you will now need to learn where to drive. Sure, you know where the late-night watering holes are, you know where the major crowd events occur, and you know where the airport is located. However, sometimes knowing where an event is happening is not as good as knowing how to avoid the traffic and still get the fares. Finding alternative routes or places to park for pick-ups is as important as knowing where the pick-up might be before they ask for a pickup.
Study the maps and drive around just to learn where and how to get anywhere. Go driving around aimlessly, noting small side roads and shortcuts through parking areas and gas stations. Sometimes you hit a hidden hot spot, a place that is so far out that no one ever thought of it, but once you arrive on the scene and if you also have an Uber light too, you can attract some attention of the crowd.
Find out where all the distant pubs and bars are situated, its much better working in driver free zones, leaving your co-drivers to deal with highly populated watering holes.
Whom to drive
While you might shy away from drunks, it pays if you come prepared. You will find loads of drunk passengers late at night around bars and pubs. Just be prepared for some bumpy rides and be patient. They can prove to be a lucrative focus, a rideshare driver for drunks. Just make sure you have a lot of patience, a lot of towels and cleaning supplies and are not taking on any violent or abusive passenger.
Another group to try and consolidate are frequent flyers. Academicians, physicians, and business people. Try to find central points where you can advertise your services to increase your net passenger list with these travelers. The more airport runs you get, the less you will need to supplement pay. Some drivers are known for only doing airport runs.
Once you signed up and got your sign-up bonus, you will need to maintain your lead with a guarantee. These are basic competitions; the more rides you get per hour, the bigger your income. Watch out for the various time-related bonuses, such as hot-spot bonuses and surges. They pay more but have their issues.
Finding hot spots and predicting surges is a major science these days. Most experienced rideshare drivers still haven't gotten the hang of this. However, once you know where a hot spot or surge will occur, make sure you are there when it happens. If you must drive there, the probability is that it will be gone by the time you arrive. Don't chase a surge, and remember, there are lots of surge chasers, they end up getting tired especially at night, don't become one of them.
Driving for more than one rideshare company
It is always prudent to sign up for more than one company, this way you maximize you passenger pick up rate. Another service you can work for apart from ride-sharing is delivery services. If you are already driving around for pay, why not expand your experience and drive for DoorDash too or go to some of the local restaurants and fast food joints that look for delivery driver's notices. Sometimes, when times are slow, you can do a few of these and make up the missing cash.
Marketing(Mostly for UberBlack & SUV)
Remember, everywhere you go and every one you pick up, ask for a tip(not directly, use headrest signs), and give your card, ask if they will refer you to another client too. Always do your best to increase your salary. Build a web presence, which includes a Facebook page, a Linkedin profile and any number of referral networks as well as a personal blog. By increasing your web presence, you are increasing the chances that your name will come up in searches as well as in discussions when people talk about Uber drivers. Just make sure you post all your incoming complements, so people can see how great you are in the eyes of your passengers.
Improve your Ratings
If you follow these simple tips, you will improve your ratings which will go a long way to improve your pay.
- Navigation might seem easy; sure, you grew up in the area, you know all the shortcuts and quick get-always. You might even know traffic patterns, but let's put on a show for the passenger and show them how professional you are and how serious you take their safety.
- Phone dash mounted; will make it easier for you to drive and to see and control the applications.
- Navigation apps such as Google or Waze, even if you know the way, key in the address and drive via the shown route, the psychological effect is huge. If you want to deviate because you know something Waze doesn't, explain that to your passenger, and key in your change, in any event, just to show them the difference.
- Safe driving, listen to all the navigational orders and maintain all traffic and road rules. Hesitate when uncertain, take no risks and don't accelerate like a madman. Nothing is worse than holding onto your seat praying to get out as fast as possible.
- Turn down the sound or off completely, you don't want the app to take over the silence or sounds of the entertainment system.
- Give explanations about where you are, let them know you are knowledgeable about the city and all its surroundings. Study up on local attractions, shopping, and culture; sometimes your knowledge will tip the scale.
- Drive safely, don't speed and accelerate slowly for smoother riding.
- Show confidence, talk but not too much, ask about small things like weather and the day, don't interrogate.
- If it's a long drive, ask if they want entertainment and if they want to stop along the way for refreshments.
- Make sure you have invested in various appliances and comfort items so that the trip will be smooth even with situations (sick, toilet stops, etc.)
- Always make sure the care is clean outside and inside, with a fresh smell. There is nothing worse than a shabby, smelly car.
- Always be courteous and polite.
- Be patient, even with the most annoying passenger, unless they step out of line, then deal with it legally, use police if necessary but never become abusive or violent.
- Upholstered seats, make sure they are attractive, comfortable, and clean. When you have time between trips, vacuum or brush them before every trip.
- In-car entertainment, make sure you have a constant selection of films or music and make sure you maintain them up-to-date.
- Working air-con or heating: The worst feeling is a hot car in summer and a cold one in winter, unless your passenger is ill, then open a window for G-d's sake!
- Blankets or Pillows should be an option available for long trips or kids.
- Child seat/Booster is not necessary but would be helpful in some instances.
- Towels, always useful for drying wet things, like clothes, spillages, hands.
- If a passenger wants to smoke, offer them a place to stop at for a cigarette, but never let smoke permeate your car. It sticks and is offensive to most people.