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Looking to make some money on the side as your business grows? Some entrepreneurs are generating extra income by driving for Uber or Lyft but like any good entrepreneur, you know that any time not spent directly building your business better be time well spent.
What are the pros and cons to working as a for-hire driver for Uber?
1. Flexible Schedule
Possibly the biggest advantage to a job like this is the flexible schedule. You can work as much or as little as you would like and during any hours. No need to schedule your driving around other activities. You can drive when you have time.
Often, part time jobs with a flexible schedule come with a salary fit for a high school student working their first job. That’s not going to work for a budding entrepreneur.
According to Uber, drivers make around $17 per hour.
But what seems like a pro could actually be a con. Another study found that after expenses, drivers in Houston, Detroit, and Denver were making less than $13.25 per hour and even worse, drivers in Detroit brought in only $8.77 per hour. In contrast, Walmart pledges to pay its employees at least $10 per hour.
Like any job of this type, as drivers learn the platform, they’re able to maximize their efficiency driving up their hourly wage and if Uber were to respond, it would likely say that the flexibility of the work is a better value to its drivers than the fixed schedule of Walmart.
Courts ruled that Uber drivers are independent contractors rather than employees. Because of that, drivers are not eligible for overtime pay or benefits and the driver is responsible for paying their own taxes. Fortunately, as an independent contractor, you can deduct expenses associated with your business income. A good rule of thumb is to save 25% of your income for taxes but you’ll likely pay much less after deductions.
As a for-hire driver, your personal auto insurance policy doesn’t cover your vehicle when you’re functioning as a driver. Many have mistakenly said drivers have to provide their own commercial policy but Uber provides commercial insurance that covers the vehicle from the time the trip starts to when it ends. Also included is uninsured motorist coverage along with other coverages including coverage when the driver is between trips. Read more here.
4. Wear and Tear
You’ve heard it before. Cars depreciate rapidly and probably the biggest enemy to your car’s value is the number of miles. As you pack on the miles, the value of your car falls and the amount of repairs increases. There’s also the normal wear and tear of having people in and out of the back of your car. There will be stains, spills, accidental damage, and the normal wear and tear that comes with frequent use.
Although Uber will help you with some expenses—cleaning up vomit or other stains, for example—the wear and tear on your car is an expense that falls on you. Save a portion of your earnings to purchase a new car. You’ll need that money long before the casual driver will.
5. Your Safety
Most people would think twice about picking up a hitchhiker but as a for-hire driver, you’re letting strangers into your car. Uber does its best to screen riders by having a feedback system where both driver and rider rate each other but there’s no way to completely mitigate the risk to your personal safety. There are also plenty of reports online of passengers making inappropriate advances on drivers and the reverse. But like any service as large as Uber, the reports of negative incidents will always gain more attention than the majority of trips that happen without incident and end up being an enjoyable experience for all involved. All drivers should take appropriate precautions and be safety-minded at all times.
If you’re looking for a little extra money, driving for Uber might be the perfect choice given the flexible schedule. This allows you to build your business when you need to and extra money when things are slow.
However, don’t expect to make $20 per hour anytime soon. As you learn the ins and outs of how to drive for maximum efficiency, expect your revenue to rise but until then, be patient.
Finally, have realistic expectations. If you’re building a business, you need to concentrate as much as possible on that effort. Uber drivers making a salary high enough to live on are driving full time in most cases.
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