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The opportunity to \u201cbe your own boss,\u201d make your own hours and work as much or as little as you like may sound like a dream. That\u2019s what rideshare services like Uber and Lyft purport to offer their drivers. But can you really drive full-time for these companies and make a living?<\/p>\n\n\n\n\n\n\n\n
While there are some interesting budding rideshare apps (i.e. Ziro<\/a> in San Francisco), the only nationally available rideshare companies at this time are the giants Uber and Lyft, so we\u2019ll focus our attention on them.<\/p>\n\n\n\n The first thing to note here is that it\u2019s incredibly difficult to measure what kind of pay drivers receive from rideshare apps. How much you make can vary wildly depending on a number of factors including:<\/p>\n\n\n\n Uber and Lyft have their own algorithms based on these factors and more that determine how much a driver earns for each ride. But the companies have remained fairly cagey when it comes to details of how their pay structures actually break down, and they often update these formulas, sometimes to the apparent detriment of drivers\u2019 earnings<\/a>. <\/p>\n\n\n\n It\u2019s also a challenge to nail down an accurate approximate hourly rate since sites like Glassdoor, Indeed, and ZipRecruiter don\u2019t allow drivers to specify whether they\u2019re inputting earnings before or after subtracting the appreciable costs of doing this type of job.<\/p>\n\n\n\n Rideshare drivers are wholly responsible for paying for their own:<\/p>\n\n\n\n Generally, the industry standard is to budget roughly 20-30% of rideshare earnings for these expenses, but this amount can necessarily fluctuate due to things like insurance markups and rising gas prices. Currently, the war in Ukraine and other inflationary conditions have caused gas prices to rise nearly 50% from a year ago<\/a>. Though this may prove to be a temporary increase, it\u2019s severely affecting drivers\u2019 ability to make an income<\/a>. <\/p>\n\n\n\n Rideshare pay and expenses being as variable and unpredictable as they are, we can do our best to estimate potential income, but we should look at these numbers within the context of an ever-changing economic climate, dynamic pay policies, and other uncontrollable circumstances. <\/p>\n\n\n\n Both Lyft and Uber appear to have a history of exaggerating earnings potential for their drivers. Numbers like $29.47\/hour<\/a> and $55,000\/year<\/a> have been floated by each company respectively, while external reporting paints a much less rosy picture.<\/p>\n\n\n\n Even looking at pre-pandemic stats (more relevant to us than 2020 and 2021 data as the world continues to return to normal levels of rider demand), we see that rideshare drivers have been grossing relatively low hourly wages for some years now. A Gridwise study conducted in 2019 found that rideshare drivers in the U.S. earned an average of $17.21 per hour before<\/em> expenses. Once we factor in a 25% cut (extra rideshare costs tend to be 20-30% of earnings), we\u2019re now looking at an hourly rate of $12.90 in that pre-pandemic year. Taking no vacations and working a standard 40-hour week, a driver could expect to make around $26,832 annually. In some U.S. cities and states this amounts to less than the minimum wage.<\/p>\n\n\n\n On the other hand, some drivers have anecdotally claimed to make a very reasonable living in the rideshare space. Before the pandemic, one New York City rideshare driver<\/a> said he averaged about $250 per 9-11 hour shift. Converting to a 40-hour work week and assuming you took no vacations, that would mean you could expect to make an annual salary of $52,000 driving in NYC in 2019 \u2026 before taxes and expenses. Assuming those cost you 25% of your earnings, you\u2019re now netting $39,000. But even this amount does appear to be the exception to the rule. Notably NYC is one of the top 5 rideshare hourly earnings locations.<\/p>\n\n\n\nPay Structure<\/h2>\n\n\n\n
Costs<\/h2>\n\n\n\n
How Much Do Rideshare Drivers Actually Make?<\/h2>\n\n\n\n
Pros and Cons of Driving for a Rideshare App<\/h2>\n\n\n