Depending on where you drive, when, and how frequently, your driver earnings could be very different – even from drivers in your own city. However, one thing all drivers have in common is expenses. From gas to insurance and more, how can drivers budget to make sure they’re not spending more than they’re making? Senior RSG contributor Jay Cradeur tackles this question and shares his cost and earnings breakdown.
Over the years, I have seen many articles about how little Uber and Lyft drivers earn per hour. Even before I started driving, I remember doing some research and reading an article that said drivers make less than minimum wage.
Still, I signed up with Uber in late December 2015, and a week later with Lyft, then drove for a while to test the waters. On my first day, I drove for 5 hours and made $100. I said to myself, if I can make $20 per hour on my first day in Sacramento, what could I do with some experience in San Francisco?
This article breaks down this driver’s earnings so we can see if my earnings are better than minimum wage.
Over the past 6 weeks, I averaged $2,300 per week, and 52 hours per week. Therefore my gross earnings per hour are $45 per hour. The chart below breaks it out for you.
I am using my most recent pay statements so that we get a realistic figure. Drivers who were active back in 2012 – 2014 were able to earn substantially more due to significantly higher ride charges and lower commission taken by Uber and Lyft. I have no doubt that if I drove back during the good old days, I would have earned well over $200,000 in a year.
In every city, these are not the good old days. While my experience is in San Francisco, regardless of how much you make in your city, one thing we can all control and measure is expenses. With good strategy and planning, you can become one of the top earning drivers in your city.
First, we must deduct all the additional expenses that a rideshare driver incurs. These are expenses that I would incur as a result of driving for Uber and Lyft. I have broken them out as follows:
My Number 1 Expense: Gasoline
I am a driving animal. I drive 6 days per week, and I drive an average of 250 miles per day. That is 1,500 miles per week.
My car gets 50 MPG, so I am using 30 gallons of gas per week. I am currently paying $3.59 at my local ARCO. This may vary widely depending on how much gas costs in your city. According the AAA, the average national cost of gas is $2.84. Clearly, it’s quite a bit more expensive in California.
Doing the math, my total weekly gas expense is a whopping $107.70. There is nothing I can do about this expense. ARCO might not seem like the cheapest gas in your city, but here in San Francisco, $3.59 is a good price. I’m not loyal to any gas station – when ARCO stops being the cheapest, I’ll go elsewhere.
Gas prices go up and go down. I have to drive miles to make money and that takes gas.
Uber Fair Unlimited Mileage Car Lease
I recommend that all full time drivers lease a car with unlimited miles. This way, you won’t need to worry about depreciation destroying the value of your car, or your bottom line. I further recommend leasing a Toyota Prius or similar hybrid car that gets in the range of 50 miles per gallon. This will help reduce your gas expense.
With the lease, a company called Donlon provides free minor services every 5,000 miles. A minor service is an oil change, tire rotation, and every 25,000, installation of a new cabin air filter. All the other expenses I have to purchase on my own. I’ll cover those later in the article.
I will assume that if I did not drive for Uber and Lyft, I would still own a car for driving around town. In order to be conservative, let’s say I purchased a car with a small $300 per month payment including insurance and repairs.
Consequently, I will add back $68 ($300 / 4.4 weeks in a month) to my automobile calculations so that we accurately represent only additional expenses incurred from rideshare driving.
I use a company called Metromile to cover all my auto insurance needs, including rideshare insurance, as required for by my lease. I pay an average of $200 per month. Therefore I pay $45.45 ($200 / 4.4 weeks in a month) per week for complete automobile insurance.
Note: Metromile no longer offers rideshare insurance (Jay was grandfathered in). If you’re looking for rideshare insurance, check out our Insurance Marketplace, which has insurance options for rideshare drivers in almost every state.
Auto Repair Expenses
There are two expenses that I have incurred on an annual basis: tires and brakes. My latest set of 4 tires was $500, and my latest brake job was also $500.
You may not need to get your brakes replaced as often as once per year, but as I drive the many hills of San Francisco, I have to ride my brakes pretty hard. The per week expense is $19.23
I pay for a cell phone. But I would pay for a cell phone whether I drove for Uber and Lyft or not. I also pay $35 for a monthly car wash subscription, but I would do that regardless of my profession, as I like a clean car. I subscribe to Spotify, but again, this is not an additional expense since I would have it anyways. I do pay an average of $10 per week on parking meters.
Expenses account for roughly 15% of my gross revenue. The expenses knock my hourly earnings from $45 to just short of $40. There are three main factors that contribute to make this relatively high earning per hour figure possible:
- City Location
- Bonus Opportunity
- Driver’s Experience and Skill
In my case, I was determined to make this rideshare gig work, so I relocated to San Francisco. Unlike many drivers, I don’t wake up and drive 1 to 2 hours to get to a destination such as San Francisco. Since I live here, I can work more efficiently. I wake up, get gas, get coffee, and turn on my app. Ping!
The Allure of San Francisco
I did some calculations on what a traveling rideshare driver could earn in San Francisco in 4 week’s time. My calculations assume you can get to San Francisco for $500 or less. It also assumes you can get a private room at an Airbnb residence for under $2,000 (I just got one for $1,200), and that you work your behind off for the full four weeks, such that you earn a minimum of $2,500 per week.
I realize some folks really need to make money. I do! For many parts of America, bringing home $5,000 might be just what the doctor ordered.
It is an interesting proposal for sure. I am the type of guy that likes short intense projects like this. You would have to make car arrangements and secure an Airbnb. And, of course, you would have to do a ton of driving.
It is the type of project that requires a strong vision of returning home with $5K (or $2K or $3K) in your bank account to inspire you.
Some articles say you will make less than minimum wage driving for Uber and Lyft. In our survey, over 1,100 drivers reported average hourly earnings of about $17 an hour before expenses.
The truth of the matter is that your earnings per hour will be based on many different circumstances and no article can tell you with any certainty what you will earn, as so much is dependent on the driver. I recommend you do what I did and give it a try, and then learn each day from the experience and improve. You will improve. Your earnings per hour will go up. Maybe I will see you in San Francisco!
What do your rideshare expenses look like?
A $545 Tax Deduction Every Week?Full-time rideshare drivers can put up to 1000 business miles a week on their car. Rack up your mileage deductions and track your business miles with QuickBooks Self-Employed.
-Jay @ RSG
Latest posts by Jay Cradeur (see all)
- What Do My Expenses Look Like After a $2,800 Week of Earnings? - July 2, 2018
- 3 Things to Never Talk About as a Rideshare Driver - June 20, 2018
- Rising Gas Prices! What Can A Driver Do? - June 11, 2018