One of the biggest barriers to entry for a lot of new delivery drivers is an eligible vehicle. Today, we take a look at all of the vehicle rental options that are currently available for gig drivers.
Gig Car Rental Options Compared
We took a first look at some of the most popular programs to see how they work and, most importantly, how they stack up against each other. Each has certain strengths and weaknesses. This is a high level review and terms change often, so make sure you confirm with the company before pulling the trigger on a rental. All of these programs do require that you be at least 21 or older to use them though.
Recommended Option for Delivery Drivers: HyreCar
Hyrecar is the best car rental option if you want to work for Uber, Lyft, Instacart, Uber Eats, Lyft, Postmates, Doordash, etc.
Hyrecar is the best option to rent a car to drive for a rideshare or delivery app. No contracts, no sign up fees, and no waiting.
HyreCar is a vehicle rental market specifically designed for on-demand drivers. It’s actually pretty cool because you can filter by price, model, and location to find what fits your needs best. You can rent a vehicle for as little as 2 days, and it is a great way to test the waters if you want to give a gig driving job a try without the hassle of car shopping.
They have designed the process to be as quick and easy as possible for drivers to get on the road in as little as 24 hours.
You can sign up for Hyrecar here (use this link to get the best deal)
Or read our Hyrecar review for more information.
More Car Rental Options
If you’d like to see a full list of vehicle options, head over to our Vehicle Marketplace page.
Since the launch of Uber’s “Xchange” leasing program in 2015, we’ve seen a rush of new competitors filling the space with different vehicle options for drivers. These programs have been insanely popular with drivers (despite the high cost) since they don’t require great credit and are extremely flexible. But now, Uber and Lyft are pushing an even more flexible option with rideshare rental programs.
Rental programs allow you to avoid the hassle of car research, going to a dealership and haggling over prices since all the terms are pretty much set in stone. Uber has already launched a partnership with both Enterprise and Hertz while Lyft also has a partnership with Hertz, but is investing heavily in their Express Drive program with General Motors. There are even some third party options like Evercar and HyreCar that are looking to compete with the big boys.
Today we’re going to review some of the rideshare rental options that drivers have, but for a full list of options, head over to our new Vehicle Marketplace page.
Rental Car Options For Rideshare Drivers
Uber-Hertz Rental Partnership
Hertz signed a deal with both TNCs since more travelers are opting for rideshare these days than car rental. With Hertz, the rental fee is less than Enterprise at $180 per week. No credit check required.
- $180 per week, plus taxes and fees. No word on whether there is a “Startup” fee.
- $250 refundable deposit.
- Unlimited mileage.
- Maintenance handled by Hertz.
- Insurance Details: Hertz Loss Damage Waiver during periods 1 and 2. Uber insurance during period 3.
- Rental Period: 7 days minimum, 28 days max.
Toyota Corolla “Or similar”- no word yet on how widely they interpret “similar”.
Compared: So Hertz is a little cheaper than Enterprise at $180 per week. It also seems to offer most of the same things as the Enterprise. However, there is no “start-up” fee.
Car Rental options for Lyft drivers: Lyft Express Drive
Lyft has made an aggressive play towards rentals this year. They are focusing on this as a competitive move against Uber to leverage their partnership (and recent $500 million investment) from General Motors. Beyond this GM + Lyft program, Lyft is also set up with Hertz to rent cars to drivers. If you rent through Lyft’s portal, your pay will be deducted from your weekly earnings summary and you will not qualify to use Express Pay.
Lyft’s Express Drive program is the most unique rental option. It is available in San Francisco, Chicago, Baltimore, Boston, Washington DC, and Los Angeles- with intentions to expand rapidly to other Lyft markets.
The program is clearly geared towards driving full-time on Lyft. Those who stick with Lyft get a lot of benefits while the costs are substantial for not being loyal.
Pricing: The rental and mileage fee can be waived if you meet the ride count criteria in your market. Per week charges start at around $149 for a small sedan and go as high as $239 for a small crossover SUV.
Every driver is automatically enrolled in Lyft’s “Rental Rewards Program” which makes those weekly charges zero upon doing enough rides. Miles driven outside of “driver mode” will incur a $0.25 charge per mile regardless of how many rides you do. Unfortunately, the Express Drive will remove you from Lyft’s Power Driver Bonus and and Average Hourly Guarantees.
- Maintenance: Handled by Lyft/GM. You must bring your car in every 8 weeks for maintenance.
- Insurance Details: Check “Rental Policy”
- Deposit: Varies, but refunded after completing first ride.
- Rental Period: 4-52 weeks depending on market. Return car at anytime. Schedule 24 hours in advance.
- Competitive Lockout: You will pay a heavy price for driving this vehicle on another platform.
Express Drive Vehicles
General Motors vehicles ranging from the Chevy Cruze, Equinox, Impala, Malibu, GMC Terrain, and more.
Source: Express Drive Rental Car Program
Notes: This program is aimed at those who want to drive for Lyft full-time. If you want to drive for Lyft and pay very little for a vehicle in the process, then this is a good program, but you must minimize miles outside of driver mode. If you meet the Power Rental Rewards program than you can end up paying very little for the vehicle (assuming you minimize personal use).
However, if you are in a market (like SF) where you can earn more via the Power Driver Bonus + Average Hourly Guarantees, then this program may not be best for you.
Rideshare Rental Startups
There are a bunch of third party companies that are focusing on rideshare rentals these days. They have a unique take on how rentals work for rideshare drivers and offer some stuff that Uber or Lyft just simply are not willing to offer.
HyreCar is a vehicle rental market designed for all on-demand services. You can rent in increments of days from private individuals who place their car for rent via their platform. Cars range from beaters to BMW’s, Prii, and minivans.
An interesting strategy with HyreCar is that you can rent an UberXL or Uber Select when a big event comes to town or if you want to test the waters on a different platform to see if there is enough business.
HyreCar works both ways though and you can also let a driver rent your car out to drive for Uber or other services. So you can rent your car out if you don’t want to drive for a few days.
You can rent by the day, week, or month. Generally the person who is putting the car up for rent will control the rates and mileage. So be sure to shop around. Most seem to have mileage limited to 150-200 miles a day.
You can sign up or check-out more here: HyreCar
There are several other local players like Ubit International (Arizona), WorkCar (SF), E-rive (Chicago) and FlexDrive that offer rentals and flexible vehicle options. You may want to check them out to see what they can offer you if they are in your market. Just go to Google and search for “rent a car for Uber” or something similar. Especially since the rideshare rental space is heating up. They might come out with something exciting but for now there isn’t a whole lot of information on them.
Why Are Rentals Such a Big Deal Now?
Owning and operating a vehicle for rideshare and delivery is expensive, complex, and stressful. To make things worse, both companies are driving down the cost of fares in order to increase their user base and the frequency in which they call a ride. Obviously this affects drivers because our pay is based off of the total of the fares. Drivers bear the costs to operate vehicles, and these costs can vary tremendously depending on the vehicle, how new it is, gas mileage, and its financing terms. This all adds up to stress for drivers and makes retaining drivers very difficult for Uber and Lyft.
Instead, rentals make the calculation simpler. Drivers pay a weekly fee that includes insurance and maintenance without worrying about how many miles they put on the vehicle, or its depreciation. Their costs get lumped into rental and gas costs instead. Further, if someone doesn’t like driving, they can return the vehicle without being stuck in a 2-3 year lease. They can then rent again if they need to drive for a week or two as needed.
Should You Rent a Car?
Renting may not be the best long-term option for many, but it is still a pretty good option for several reasons.
It can help many people determine whether this type of work is for them before committing to a long term loan or lease. Rentals are also a good option in the event that your primary rideshare vehicle breaks down- greatly reducing the time a driver is off the road while their car is in the shop. Rentals provide better access to seasonal drivers like students or even to those who are unable to get their hands on a car. Further, rentals shift a lot of costs away from the driver, like depreciation, maintenance, and insurance. This turns many of the biggest costs for drivers into a fixed and predictable cost.
I’m also a big proponent of being comfortable in the car that you drive. Renting can help you put a car through real-world tests in order to make the right choice in a rideshare vehicle.
Tax Ramifications of Rideshare Rentals
Choosing to rent a car for rideshare can affect your taxes because “rent and lease” falls under a separate category than owning a car. A renter will not be able to take the IRS Standard Mileage Deduction of $0.54/mile for the miles they put on their rental. Instead, they would have to deduct their actual expenses while driving for an on-demand service like Uber or Lyft.
This would mostly involve rental fees and gas costs. You can track these expenses by syncing them with an app like QuickBooks Self-Employed and then further simplify the process by creating “rules” that automatically file these expenses whenever they occur. Doing this will become more important than ever because you are going to want to track all of your expenses to minimize your tax liability. This is especially true if you cannot take the mileage deduction.
My (Always Humble) Opinion
All of these rental options are expensive. We haven’t done an in-depth financial analysis yet on rideshare rentals vs buying but I’d assume that the latter comes out way ahead. But for a lot of people, these rentals make sense since they are extremely flexible and don’t require much in the way of a down payment or credit.
So if you’re not ready to commit to buying or leasing a car on your own, these rental programs can be used to your advantage. I suggest driving like a mad man with the rental while you have it though. Ultimately, it’s imperative to take advantage of whatever features the program offers. So if you’re looking for flexibility, unlimited mileage or just to test the waters, there’s sure to be a program that meets your needs.
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If you’d like to see a full list of vehicle options, head over to our new Vehicle Marketplace page.