Many Americans make their living by driving. Most professional drivers are truck drivers, however, using your own car to drive people and products is a career venture that is growing rapidly. Now with companies like Uber, anyone can utilize their car to make money as a personal driver.
Becoming an Uber driver: Where to Start
Before you get too invested in the Uber process, start by filling out the application. Uber will then do a background check to make sure you meet the following qualifications:
- You are at least 21 years of age
- You must have at least three years of driving experience
- You must have car insurance in your name in the state you live in
- You must have an in-state car registration, although it does not need to be in your name
- You must have a current in-state driver’s license and Social Security number
- You must have a clean driving record (no DUI or drug-related offenses, fatal car accidents, history of reckless driving)
- You must not have a criminal history
If you recently moved to a new state, you might be required to submit extra information to verify your driving history. Be sure to have your old state’s driver’s license and insurance on hand.
What Kind of Insurance and Driver’s License Do I Need for Uber?
The type of car insurance coverage you need depends on your state. Uber does offer coverage, but only when you are logged into their app and driving customers. When you are logged on and waiting for a driver request, Uber’s insurance covers “contingent liability coverage with 50/100/25 limits...provides secondary coverage that pays only for losses not covered by driver’s personal policy.” When you are driving a passenger or are en route, Uber's insurance covers more, including:
- Commercial liability insurance with a $1 million limit
- Uninsured/underinsured bodily injury with a $1 million limit
- Contingent comprehensive and collision coverage with $1,000 deductible (only for drivers with personal comprehensive and collision coverage)
What Kind of Car Do I Need to Join Uber?
Depending on the city you live in, you will either need a 2000 or newer car model or a 2005 or newer model. Typically, nicer or busier cities require you to drive more recent model. The vehicle also needs to be a four-door sedan that seats four or more passengers, not including the driver. The vehicle must not have a salvaged title or be a marked vehicle or taxi.
There are other tiers of Uber, including Uber XL and Uber Black, which have additional vehicle requirements. For example, an Uber XL driver must have a vehicle that seats six or more, and an Uber Black driver must have a luxury class vehicle within a certain age range.
If you do not have a car that meets Uber requirements, you can consider buying a used vehicle that qualifies. Do not buy a new car for your Uber position since you will be putting a lot of wear and tear on the car. You can also research the possibility of leasing a car, although it is wise to know the mileage limitations before you sign the lease. (For related reading, see: Pros and Cons of Uber and Other E-hail Apps.)
How Much Money Will You Make?
Most drivers will make about $10-20 per hour after accounting for expenses such as gas and car maintenance. Uber frequently offers cash bonuses when you apply to be a driver. Uber has also been known to offer up to $500 to Lyft drivers to join Uber. Harry Campbell from TheRideShareGuy.com says, “There's plenty of earning opportunity as an Uber driver, but you can't just flip on the app and expect to make a ton of money. You have to be willing to try new places, new times and basically go above and beyond what other drivers are doing.”
Another way to maximize your earnings is to drive a cost-efficient car. Driving a hybrid vehicle can save you up $200 a month on gas, which will then boost your earnings. Other ways to make more include driving during a surge, which is when Uber charges riders higher rates due to the lack of available drivers in a certain area at a certain time, or for rides in a populated city. For example, if you live in San Fernando, Calif., it would be better to travel to Los Angeles to find multiple driving opportunities. (For related reading, see: Will Uber Replace Airport Taxis?)
How Do Uber Drivers Pay Taxes?
As an Uber driver, you will be considered an independent contractor. At the end of the year, you will receive a 1099-form, and you will have to set aside a percentage of earnings to cover taxes. You will also be able to write off job-related expenses, such as miles, gas and more. Be sure to keep a detailed log of your miles and expenses. Talk with a certified public accountant (CPA) to get a better idea of what can be written off when you file.
What Costs Does Uber Cover?
As an independent contractor, you are responsible for all of your gas costs, car repair and maintenance costs, and any other car-related expenses. Uber will cover cleaning costs if a rider spills something or vomits in your car. It is a good idea to invest in a dashboard camera to protect yourself against abusive riders and incidents.
The Bottom Line
Is driving for Uber right for you? Uber offers a flexible way to earn money. As the driver, you decide how much and which hours you drive. You can easily work for Uber as a part-time or full-time business, or fit it into your school or existing work schedule.
(For related reading, see: Businesses You Can Start For Under $1,000.)