The Rideshare Guide

Everything You Need to Know about Driving for Uber, Lyft, and Other Ridesharing Companies

Harry Campbell

• Publisher: Skyhorse
• Year: 2018
• Print ISBN: 9781510735316
• eBook ISBN: 9781510735323
• Topic: Business
• Subtopic: Business General
• Index: Business

An industry leader's guide to making Lyft and Uber work for you. In less than five years, ridesharing has grown from nonexistence into a billion dollar industry. Uber now has two million drivers in the United States, Lyft has seven hundred thousand, and both show no signs of slowing down. Despite the large number of drivers, Uber and Lyft provide little in the way of help for new drivers, who complain that there is a lack of guidance when starting out. Harry Campbell, founder and director of The Rideshare Guy blog and podcast and a driver himself, can help. The Rideshare Guide offers a comprehensive and engaging handbook for current and prospective rideshare drivers. Learn how to:

• Decide between Uber and Lyft
• Maximize passengers and profits
• Maintain a five-star rating
• Keep safe and interact appropriately with passengers
• Navigate legal matters and tax codes

Campbell explains these and much more, also including funny, shocking, and bizarre tales from the road. Whether you are thinking about becoming a driver or a veteran wondering about UberPool and tax help, The Rideshare Guide by the Rideshare Guy has the answers.

1

What’s it really like to be a rideshare driver?

I STILL REMEMBER MY FIRST ride as an Uber passenger all the way back in 2013. My driver was telling me about all the fun drunks he was picking up and, most importantly, how he was making a ton of money for a job that was actually pretty fun. That first driver I took a ride with had nothing but good things to say about the company and since my real job at the time had me working all day in a cubicle, getting paid to drive people around and talk to them sounded like a no-brainer.

Now, a lot of you might be wondering How hard could it be to drive for Uber? To be fair, that’s usually the first question people ask when I tell them I run a blog that helps Uber and Lyft drivers. My answer to that question is simple: Being an Uber driver isn’t rocket science, but it is a little harder than it looks. While most of us know how to drive a car, once you start to involve other people, a ratings system, and alcohol, things get a bit more challenging. Driving for hire is the ultimate combination of customer service, safe driving, navigation, and strategy.

Even though it may be fun to hype up the life of a rideshare driver, it’s not all glitz and glamour. Uber has over two million drivers on their platform, but half of them will end up quitting after just one year.4 High turnover means that there are a lot of obstacles to overcome but if you can figure it out, being a rideshare driver could prove to be one of the most unique work experiences in your lifetime.

How much you’ll make as a rideshare driver

Driving for Uber or Lyft has its perks but at the end of the day, it’s not something I would ever do for free! The average driver reports5 earning around $16–18 per hour before expenses, but a lot of variability is behind those numbers.

Unlike a cashier job where everyone gets paid the same amount from day one, different drivers will end up with different earnings. The amount you make will depend heavily on when and where you drive. Driving in busy cities like San Francisco, Los Angeles, and Chicago is more lucrative than driving in smaller or mid-tier cities since there’s so much more demand. Now, you might not be able to control where you live, but as many drivers discover, it pays to drive in the busiest places.

As an Uber or Lyft driver, you’ll also want to consider when you plan on driving. Uber offers a ton of flexibility but in order to maximize your profits, you’ll want to focus on the busiest times to drive. Typically, the peak hours occur during weekday commuting hours and Friday and Saturday nights. Now, you don’t have to drive during those times to make money but that’s usually when it’s the busiest and you’ll be able to maximize your profits. (See chapter 5 for more info on maximizing your profits.)

I drive part-time in Los Angeles but I hate traffic. I’ve always targeted the weekends and after traffic dies down on the weekdays, which can be very profitable. So even though the average driver reports making $16–18 per hour, I usually aim for $20–$30 per hour. Here’s what a recent weekend of driving looked like for me:6

Table 1: Earnings for a week of driving in Los Angeles, CA - March 2017

As you can see, I hit my goal of $20–$30 per hour but there was a lot of variability from Wednesday to Saturday. I averaged only $16–$17 per hour on the weekday nights but on Saturday, my average hourly earnings jumped up to $33 per hour.

You probably won’t hit these numbers from the get-go, but it should be used as a gauge for the potential earnings as a driver. I hear from drivers all the time who are struggling to make minimum wage, but that’s because they’re not doing everything they can to maximize their earnings.

Remember, there’s no minimum wage as a rideshare driver and there are no guarantees when it comes to how much money you can make driving for Uber and Lyft. But the smarter you work and the more strategy that you employ, the higher your earnings can rise.

As a driver for rideshare services, you’re actually a 1099 independent contractor, which means you’ll be responsible for all of your expenses, and come tax time you will need to file a Schedule C. Don’t let that scare you, since I’ll make sure you have everything you need to stay ahead of the game in regards to taxes and reporting. Chapter 8 will go over rideshare taxes and show you exactly what you’ll need to do come tax time.

What your expenses will look like

Rideshare drivers will put a lot of miles on their cars. A full-time driver can easily do a thousand miles a week or more and if you refer back to table 1, you’ll notice that the last column shows that I drove 466 miles in order to earn my $459.18. So if your car gets 25 miles per gallon and gas costs $3 per gallon, you’ll have to subtract the cost of gas from your earnings.

(466 miles / 25 miles per gallon) x $3 per gallon = $55.92 (my total fuel cost for a weekend of driving)

If we subtract the total fuel cost of $55.92 from my gross earnings of $459.18, my net earnings come out to $403.26. So now you know why so many Prius drivers are on Uber and Lyft! The cost of fuel cuts into your earnings and that’s why it’s so important to have a car that gets great mileage, especially if you’re going to be a full-time driver. We’ll cover the full cost of operating your vehicle in chapter 8 but in short, you get paid the same whether you drive a gas guzzling SUV or a fuel-efficient hybrid. So the car you drive can have a big impact on your bottom line.

Why Uber and Lyft are the most flexible jobs in the world

Let’s say you need to make $50 for an upcoming bill or even a night out on the town. With Uber or Lyft, you can flip on your app and work a few hours until you hit $50, cash out that money instantly, and not work again until you need to do the same thing over again.

There aren’t many jobs with this type of scheduling flexibility, and if you’re anything like me, having the ability to make money on a whim could really come in handy.

Jay Cradeur got the inspiration to drive from his daughter, a millennial! She enjoyed driving for Uber, and Jay, wanting flexibility so he could keep up his passion for travel, tried driving in 2015. He made $100 in his first six hours driving and was hooked!

Jay started off driving in the Sacramento market but he soon relocated to San Francisco to take advantage of all the driving opportunities in that city and now drives full-time. The extra money he makes as a full-time driver with all the bonuses has made a big difference in his income, and the weekly incentives and bonuses accounted for 25 percent of his revenue in 2016.

His full-time rideshare driving job pays for all of his bills, helps to support his daughter in college, and enables him to travel. In 2017, he took three-week vacations—even to exotic locations like Bali!

You can learn more about Jay here: therideshareguy.com/JayCradeur

Even though Uber provides the ultimate flexibility, most people don’t need it. You probably won’t want to sign on to the Uber app and do one ride and then turn it off because that isn’t very efficient. Most drivers work in blocks of three to four hours or more. And since the average ride is around ten to fifteen minutes, you’ll want to work enough to get in a rhythm and start earning decent money.

Uber and Lyft don’t set maximum hours that you can work7 but it’s important that you stay safe on the road. I generally try and take a break every couple hours, even if it’s just to use the bathroom or stretch. Sitting in a car for hours on end can be detrimental to your health so it’s important that you stay hydrated and move around when you can. We’ll expand on this topic in chapter 8.

Getting your Uber and Lyft sign-up bonuses!

Uber and Lyft have raised billions of dollars from investors over the years, and a lot of that money goes into subsidies for drivers and passengers. We’ll learn more about the weekly bonus and incentive programs that Uber and Lyft offer in chapter 5, but one of the first things you’ll want to take advantage of as you start off is the potential sign-up bonus for new drivers.

Uber and Lyft offer sign-up bonuses to brand-new drivers that can range from $25–$50 all the way up to $500 in bigger cities. Typically, the more demand there is for drivers, the higher the bonus that the companies will offer.

But as you can imagine, there are a couple hoops to jump through in order to get such a big bonus. Neither company publishes a list of sign-up bonuses online, but try and reach out to the company directly to find out what they’re currently offering. You can always sign up to drive directly on the Uber or Lyft website, but I don’t recommend it since then you won’t be eligible for a sign-up bonus. If you want to get a bonus, you’ll need to make sure you go through an existing driver’s referral link.

If you haven’t signed up yet and you’d like to use my information, I’ve included my referral codes and direct sign up links below:

• Uber: Use code 3e3dg or direct link:
www.therideshareguy.com/newuberdriver

• Lyft: Use code Harry757 or direct link:
www.therideshareguy.com/newlyftdriver

Sometimes, drivers sign up with Uber but forget to enter a referral code. In this instance, Uber gives you ten to fifteen days from when you’re activated as a driver to submit a retroactive referral code. You can reference my website for the latest instructions on this process: www.therideshareguy.com/sign-up-bonuses.

Lyft does not allow for drivers to retroactively submit a referral code so make sure that you enter it correctly the first time around.

If you’re wondering when the best time is to sign up for Uber or Lyft and take advantage of sign-up bonuses, demand for drivers usually spikes in the early summer and at the end of the year since Halloween, Thanksgiving Eve, and New Year’s Eve are a few of the biggest driving nights of the year. So, if you can take advantage of a bonus to get started, great, but don’t let that hold you back.

In 2017, Uber started rolling out a new bonus program for new drivers called “Guaranteed Earnings.” Guaranteed earnings have now replaced sign-up bonuses in most markets and the way this program works is slightly different.

You’ll still need to use a referral link of an existing driver to be eligible, but instead of a bonus, Uber guarantees new drivers that they will earn a certain amount after a specific number of trips.

Please note that the amounts and details listed in table 2 change continuously and may no longer be applicable by the time you are reading this book, but they should give you an idea of how the program works and how the amounts vary by city. In San Francisco for example, drivers were guaranteed, under this promotion, $1,000 in earnings within their first one hundred trips, or $10/trip. Based off data we’ve collected, the average trip payout to a driver is around $7, so if you earn $700 under this program, Uber would pay you an additional $300.

Table 2: Guaranteed Earnings for New Uber Drivers by City - June 2017

To maximize your earnings on the guaranteed system, you’ll want to complete as many short rides as possible. This is the opposite of a typical driving strategy, as medium to longer rides mean bigger fares. But if your earnings...

Table of contents

• Cover
• Title Page
• Copyright
• Table of Contents
• Acknowledgments
• Introduction: Why drive for Uber or Lyft?
• Chapter 1: What's it really like to be a rideshare driver?
• Chapter 2: How do I get started as a driver?
• Chapter 3: What’s it like to give your first ride?
• Chapter 4: How can you become a five-star driver?
• Chapter 5: How do I maximize my profits?
• Chapter 6: How should I deal with difficult passengers and challenging situations?
• Chapter 7: Where can I find driver support, community, and resources?
• Chapter 8: What does it take to be an independent contractor? (Including taxes!)
• Chapter 9: How can you diversify your rideshare income?
• Chapter 10: What does the future look like for rideshare drivers?
• Conclusion
• Appendix
• Index
• About the Author