Uber, the popular ride-sharing service, makes a very compelling pitch to recruit new drivers. The company’s ads claim that you will make money just by driving around town – in your own car and in your free time. That’s basically right, but there are countless anecdotes, backed by numerous studies, indicating that it’s not quite as easy as it sounds to become a profitable Uber driver. It requires a lot more than simply downloading the Uber app and starting up your engine.

Not an Employee

The first thing you need to know is that Uber drivers are not actually employees of Uber – they’re independent contractors. As an independent contractor, you need to think like a smart business person. If you make good decisions on that basis, and you’re willing to give up your nights and weekends (among the most profitable times to drive) for a chance to earn extra money, driving for Uber might be a smart move.

Perhaps the first key question to ask is: Are you doing this as a full-time job, or as a lifestyle supplement, driving only occasionally, when it’s convenient or when surge pricing is in effect? Your profits will depend on how you answer that question.

What You'll Earn

A 2015 Princeton University study discovered that drivers in the UberX program – the lowest-cost option for riders – if driving between one to 15 hours weekly, had a lower hourly average (about $1.42 less) than drivers who worked between 35 to 49 hours. These numbers didn’t take expenses into account, which is among the many variables that can affect your bottom line.

Uber guarantees an hourly minimum rate in select cities, but the minimum might not apply to your specific situation. Given all the variables, we recommend that you do as much research as possible – starting with talking to drivers in your area.

Vehicle Type

You should pay close attention to Uber’s requirements that specifically apply to your location and desired level of service. UberBLACK and UberSUV, which are more-expensive services in luxury or large vehicles, earn higher fares. However, these services require nicer and more expensive vehicles than what an UberX driver uses. In the UberX program, the requirements are relatively basic: a car with four doors that passed a local inspection and is relatively new (made between 2000 and 2005, depending on the city). Uber drivers at all levels must also be at least 21 years old. They must be licensed and insured, pass a background check, and have a relatively clean driving record.


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Uber drivers, as independent contractors, need to track their own expenses and pay their own taxes. These can be time-consuming tasks – with steep penalties if you neglect your responsibilities. For example, if you accidentally misreport your income or deductions to the IRS, you could be on the hook for fines. If you lack the will or the basic skills to record and report your personal finances, or complete tasks associated with basic tax preparation, this might not be the gig for you. Of course, getting an accountant to do these things for you is an option, but that will increase your expenses.

[Read Uber vs. Lyft]


Uber insures its drivers against the most likely scenarios, such as crashes while on the job. According NerdWallet, a finance blog, Uber provides up to $1 million in liability protection, as long as Uber customers are in the car when the accident occurs. However, Uber drivers may also want to consider ridesharing insurance or commercial insurance, both designed to protect drivers who make money carrying passengers. Personal auto insurance probably won’t cut it because it’s not likely to cover accidents or other situations that occur while an Uber driver is on duty, especially if the insurance company hasn’t been informed the vehicle is being used for commercial purposes. And if there’s no customer in the car at the time, Uber’s insurance might not kick in either. The safe bet is to carry ridesharing insurance, which is designed to cover this gap.


Uber drivers should also be aware that the job can be dangerous, and that Uber won’t necessarily have your back if something goes wrong. An article in the March issue of WIRED points out that it’s easy to underestimate statistical evidence of violence or harassment faced by rideshare drivers, since there are few laws specific to this relatively new industry.

Uber and other rideshare companies aren’t required to disclose detailed statistics about driver safety, so they usually don’t. And because drivers are independent contractors, there are limits to what Uber can and must do to help improve safety conditions on the job. If drivers are offered safety training, for example, Uber would then be violating one of the federally imposed conditions that firmly classifies its drivers as contractors instead of employees. If you choose to drive for Uber regardless of the safety risks, keep in mind that, as a contractor, you can choose not to work late, and you can turn down rides that go into unsafe areas. Buying and installing a dash camera will be yet another expense, but that can be a deterrent to unruly passengers.

Risks for Your Car

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Even the politest passengers are still strangers, and as an Uber driver, you have to be totally comfortable constantly having strangers in your personal vehicle (that you pay for and maintain). Consider this: Your car’s backseat will become something like a city bus, in the sense that drunk or unruly strangers will be using it for rides. If you are private person, or squeamish, Uber might not be the best way to earn extra money.


With those caveats in mind, there are undeniable perks to an Uber driver’s lifestyle. Need time off for a doctor’s appointment or the kids’ soccer game? That’s your prerogative. Want to save up for a vacation and take a week or two without asking for permission or feeling hassled? You can work a little extra to supplement your budget, and then, when it comes time for that hard-earned vacation, just go. As long as you’re disciplined, the set-your-own-schedule routine can work to your advantage.

While Uber pushes the job’s great perks, you probably won’t find any mention of the equally real drawbacks in Uber’s persuasive pitches to recruit new drivers. Like any job, it’s up to you to weigh the pros and cons. The best decision about whether or not to become an Uber driver, in the end, is a personal matter – based on your unique circumstances and your calculations about the value of your time and freedom.