If you’re struggling to pay off your student loans, it could be tempting to cash in some of your free time for…well, cash. If you have a car, driving for Lyft or Uber—or both—might seem like the perfect option.
So is it worth it to be an Uber Driver? Maybe. On the high end, some drivers claims to make around $90,000 per year. On the low end, some drivers are barely making minimum wage. Obviously, there are a lot of factors that play into your potential earnings. Let's take a closer look.
What are the requirements for becoming a Lyft or Uber driver?
If you want to work for Uber, you’ll need to meet the following requirements:
- Be at least 21 years old; 23 in some locations.
- Have an active driver’s license and at least three years of driving experience.
- Have a four-door car from year 2007 or newer in most locations.
- Have appropriate auto insurance in your own name.
- Have a driver’s license in the state where you plan to drive.
- Have in-state plates on your car and a current registration.
- Be able to pass a background and driving record check.
Some of these requirements vary depending on where you live and which Uber service you’re considering driving for. The requirements are looser for UberEats, for example—Uber’s answer to food delivery services like Seamless and GrubHub. Uber delivery drivers can be 19 years old, with a car from as far back as 1996.
Lyft’s requirements are similar to Uber’s, including passing a DMV and criminal background check, having a valid driver’s license and insurance, and owning a car that’s fully insured. Lyft drivers’ cars must be no older than 2006 in most locations.
How much money can you make?
Both Lyft and Uber pay a base rate for picking up a passenger, plus a per-minute or per-mile rate that can be affected by surge or Prime Time pricing, depending on your area.
If you’re driving a short trip that pays less than the required minimum fare for taxi drivers in your city, the company will pay a supplement that boosts your payment to the minimum.
Both Lyft and Uber also take a cut from the driver’s earnings, usually starting at 25%—but that can vary. Uber takes 28% from UberSUV drivers, for example. Lyft charges 20% commission for drivers who signed up before January 1, 2016 and 25% for those who signed up after. If you get a tip, you keep it.
As for how much money you could make—that depends on how much you drive, when you drive, and your location, among other factors. If you’re looking for hard figures, the numbers are tough to pin down.
One Slate article cites a claim that UberX drivers make a median of $90,766 in yearly income. That figure is most likely highly inflated; the same Slate article broke down a driver’s expenses—including Uber fees, gas, tolls, car repairs, insurance, detailing, and taxes—to find he was only making $12 per hour.
Some make less. A 2016 Washington Post article showed how much Uber drivers made in various parts of the country; those in Detroit made $8.10 per hour after taxes, which is less than the minimum wage in that area.
What are the benefits of working for Uber or Lyft?
The big benefit is flexible hours. You can work when you need to, for as long as you want, whenever you need extra cash. That makes it a draw for many, even if the margins are small.
And while driving for Uber or Lyft isn’t necessarily easy money, there are ways to maximize your income. Drivers can earn more during peak times and in high-volume travel areas.
Is it worth it to work for Uber or Lyft? The answer depends on how good you get at taking advantage of surge prices and the volume in your area, among other factors. There’s a learning curve—and not everyone can make it pay off. But if you can, it could be a decent side job to help you pay off your student loans.
Want to learn more about side hustles, making more money, and paying down debt? Check out additional articles in Your Financial Future.