Uber is one of the most popular rideshare platforms around the country. Millions of people use it every day as a driver or rider. However, other options exist. So how do you know if Uber is right for you?
We’ve uncovered the pros and cons for Uber drivers and riders below.
Uber Overview
Uber is a household name. Even if you haven’t driven for them or ridden in one, you’ve likely heard how they’ve disrupted the taxi industry. So no longer do you need to sit on the side of the road and hail a cab. Instead, you open an app and ‘order a driver.’ Then, if you’re a driver, you open the app and look for ride requests.
Uber is a marketplace for drivers and riders, and each side has pros and cons. Here’s what you should know.
How Uber Works for Drivers
Drivers can use Uber to earn money. But, for most, it’s a side hustle they work in addition to their full-time gig or to give them something to do in retirement. Most drivers don’t make enough to cover their bills, but working the right shifts and providing excellent customer service can help drivers make a good side income.
To drive for Uber, you must meet their driver requirements, pass a background check, download the app, and have a suitable car (and driver’s license).
You don’t have to work specific shifts or answer to a boss. Each Uber driver is an independent contractor working for themselves and is responsible for reporting their income and paying taxes.
How Uber Works for Riders
Uber riders have an easy way to hail a ride to their destination without worrying about finding a taxi.
Riders use the same app Uber drivers use to request a ride. When a rider makes a request, available drivers in the area receive it and can accept it. Riders have many options, including vehicle size and dropoff time, which can affect pricing.
Once the ride is accepted, the app alerts the rider when the driver is approximately one minute from their pick-up spot. When the driver arrives, both the rider and driver verify the identities of one another, ensuring they match what’s in the request, and the ride begins.
The driver takes the rider to the chosen destination following the in-app directions. After the ride, both the rider and driver can leave reviews, and the rider can tip the driver.
Driver Pros and Cons
Driving for Uber is a great side hustle for the one million+ drivers in the United States. But, like any side hustle or job, there are advantages and disadvantages.
Pros
Driving for Uber has many benefits, including the following.
1. Safety
Anytime you drive strangers around in your car, there is an inherent risk; however, Uber does its best to ensure the safety of its drivers.
Rather than picking up a stranger on the street, you pick up a registered Uber customer with a credit card linked to their account. They don’t share private drivers’ information with riders; everything is anonymous.
Uber also provides an emergency assistance button in the app should you need it and utilizes RideCheck. This GPS-monitored system instantly accesses resources if your route goes off the beaten path or it detects a crash.
2. Flexibility
Flexibility could be the most significant benefit drivers have because, unlike a traditional part-time job, there isn’t a schedule you must follow. You don’t need to schedule your shifts beforehand; you can work as often as you want.
The flexibility allows drivers to choose the most convenient hours and those with the highest demand, aka the highest pay.
3. Surge Pricing
Uber drivers can schedule their shifts when surge pricing is available to increase their earnings. Surge pricing occurs when there is a higher demand for rides as an incentive for more drivers to log into the app and accept rides.
The surge times vary by location and day, but on average, they occur from 7 AM to 8 AM and 6 PM to 9 PM. In addition, if there are special events or other happenings in the area, surge pricing may occur because of the higher demand.
4. Immediate Payouts
Uber riders prepay for their ride, so you don’t have to worry about getting ‘stiffed.’ Typically, Uber pays drivers weekly via direct deposit, including their cut of the fare plus 100% of the tips.
However, if you want or need an immediate payout, you can request instant pay up to five times a day for a $0.50 surcharge per withdrawal.
5. Keep 100% Of Tips
Tipping is optional for riders, but Uber drivers keep 100% of the tips earned. So while you might not be able to control how much you earn from Uber as your cut of the fare, you can influence the amount of tips you receive.
Provide excellent customer service, do more than what riders expect, and be courteous, and you’ll increase your chances of receiving great tips.
6. Simple Driver Requirements
Uber makes it easy to become an Uber driver. Here’s a quick rundown of the Uber driver requirements:
- Have at least one year of driving experience if 25 or older or three years if under 25
- Have a valid driver’s license
- Pass a background check
- Have an eligible 4-door vehicle
Cons
Like any job, there are downsides to driving for Uber. Here’s what to consider.
1. Questionable Labor practices
The gig economy has allowed millions a great way to earn more; however, there is a downside. Because you must put in a lot of time and effort with no guarantee of minimum wage, labor practices come into question.
In addition, Uber drivers don’t get any benefits, must cover all expenses, including vehicle maintenance and gas, and must handle their own taxes.
2. Driver Classification Controversy
There has been an ongoing battle about classifying Uber drivers or any gig economy worker in recent years. The state of California tried passing a law to classify ride-sharing drivers as employees and not contractors, but it didn’t pass.
3. Unpredictable Pricing
Uber drivers don’t have any control over the pricing charged. They are at the mercy of what Uber charges. The rates vary based on timing, demand, and other factors. So it’s impossible to predict how much you’ll earn.
4. Price Competition
Uber isn’t the only rideshare company competing for the same audience. There are other companies, like Lyft, and traditional taxi services. Of course, Uber has the lion’s share, but that doesn’t mean there isn’t competition.
5. Driver Competition
Because the driver requirements are so simple, there is a lot of driver competition, aka people vying for the same rides you want. If you live in an area with many drivers, you may get fewer rides than you would like.
6. Subject to Customer Reviews
Riders can leave reviews about your services, and you have no control over them. If they leave a poor review, it could hurt your chances of getting more rides in the future. While Uber won’t restrict you from accepting rides, riders can decline rides from drivers with bad reviews, hurting their chance of earning an income.
Rider Pros and Cons
Pros
Riding in an Uber has many benefits, including the following.
1. Convenient
Riders don’t need to sit on the curb, hail a taxi, or make a phone call. You can order an Uber by opening the app and placing a request. You can request an Uber from almost anywhere, and in most cases, they arrive in a few minutes. You can pay for the fare on the app, so there’s no hassle with payment before or after the ride.
2. Professional
Uber drivers have a responsibility to be professional. They should arrive in a clean, well-maintained car and treat the ride with respect. In addition, drivers must use the Uber app to conduct the drive and follow the in-app instructions.
While there’s no guarantee the driver will be professional, your chances of having professional experience are high, and if not, you can leave a review stating otherwise.
3. Easy-To-Use App
The user-friendly Uber app makes it easy to request and track your rides. You can review a driver’s reviews and turn down potential drivers if they aren’t comfortable. In addition, you handle all payments through the app and can leave a review for your driver after the ride.
4. Variety of Service Tiers
Uber has a variety of tier services to help you get the perfect ride. For example, UberXL offers room for up to six passengers versus the standard four-passenger limit for a standard Uber. You can also order an Uber Comfort for more legroom or Uber Black for a ride in a luxury car.
5. Less Wait Time Compared to Taxis
Uber drivers are usually around the corner or within a few minutes of your pick-up spot when they accept your request. Taxis, on the other hand, are hit or miss. If you’re hailing a cab, you must wait until one is nearby, and if ordering one on the phone, you may wait a while.
Cons
Of course, there are downsides to riding in an Uber, including the following.
1. Pricing
There’s no way to predict how much an Uber ride might cost. The fares are constantly changing based on demand, availability of drivers, weather, and distances. The same trip could cost different amounts on two different days.
2. Driver Cancelations
Uber drivers can cancel rides. While it’s not good practice, and Uber might do something if they cancel too often, it can happen. This can be extremely unfortunate if you have somewhere important to be, such as catching a flight or attending a work meeting.
3. Not Available in All Cities and Locations
Uber is widespread and located in 900+ cities, but it isn’t available in every city or location where you might need it.
Want to Drive for Uber? Here’s How
If you think driving for Uber sounds like a good gig, the good news is that it is easy to get started.
As I said, you must be at least 25 years old (or have three years of driving experience), have a driver’s license, a reputable car, and pass a background check. If you can pass these requirements, here are the simple steps to get started.
You must prove you can pass all the Uber requirements by providing the following:
- A copy of your current driver’s license
- Proof of residency
- Proof of car insurance for the car you’ll drive
- A clear profile picture from the shoulders up
To sign up, download the Uber app and click ‘Sign Up.’ Provide information about yourself and your car, upload the documents, and get approved. Then, you’re ready to drive!
FAQs
Riding or driving for Uber can be a great way to take advantage of the gig economy, but people have many questions about them.
Which Is Better to Drive For, Uber or Lyft?
You have a few options if you want to be a rideshare driver, so people wonder, is Uber or Lyft better?
The answer is that it depends. First, see which rideshare company is the most popular in your area. For example, if you live in an area where Uber isn’t very popular, Lyft would be better, and vice versa. However, if you’re looking for an app that pays bonuses or has a lot of challenges to earn more, Uber wins, hands down.
What Are Drivers’ Overall Satisfaction With Working for Uber?
On Glassdoor, Uber drivers give Uber 3.5 stars out of 5. Most drivers enjoy the job, but like any income-making opportunity, there are complaints. The nice thing about driving for Uber is you are your own boss, so you have a larger say in how things go.
How Does Uber Calculate What It Charges Riders?
There are many factors Uber considers when calculating its charges. It’s a complicated algorithm, but the most common factors are estimated trip distance, time, and demand at the time of the request. There may also be charges for wait time, tolls, or other factors.
What Percentage of Driver’s Earnings Does Uber Keep?
On average, Uber takes 25% of the fare charged, giving Uber drivers 75% of the fee. However, drivers also keep 100% of the tips.
