Industry News & Insights

What it's like to be an Uber or Lyft driver

What it's like to be an Uber or Lyft driver

Written by: Jon Simmons

What do Google, Xerox and Photoshop all have in common? Answer: They’re all brands that became so wildly popular that we now use them as verbs. You can now add Uber—and increasingly, Lyft—to that list.

Today, about 160,000 Uber drivers serve over 8 million users in order to earn extra cash or grow their own businesses. Lyft drivers total over 100,000 people, and the number is growing. No wonder these popular rideshare services have not only given rise to the gig economy, but also entered the everyday lexicon in cities across the world.

Sound like a gig you’d enjoy? Before you grab your keys and ditch your day job, you need to understand who you’re actually working for, how to make decent money and more. Monster asked both current and former Uber and Lyft drivers to share insider tips on what you should expect.

You’re an independent contractor—and you're be taxed like one
If you drive for Uber or Lyft, you’re most likely not one of their employees (i.e., someone who works at their corporate offices). You work for you.

“Drivers are actually paid via 1099 and are technically running their own business,” says Harry Campbell, a current Uber and Lyft driver in Los Angeles and author of blog and podcast The Rideshare Guy. “So that means they have all the same reporting and tax requirements of a small business. It isn't a ton of work, but most drivers should consider this since they need to worry about their expenses just as much as their income.”

Be aware that state, federal, Social Security and Medicare taxes are not deducted from your paychecks. If you drive often, this means you should probably be filing quarterly estimated income taxes.

You've got to know your market to maximize your earning potential
What’s the biggest difference between driving in a city like L.A. and a small suburb? Demand—and that affects your pay. In the burbs, there are fewer people requesting rides and more wait time between trips, meaning drivers must spend their time wisely.

When not driving, Michael Noker, an Uber driver in El Paso, Texas, works on his side gig as a YouTube influencer. He responds to YouTube comments, monitors social media and checks email. “I use that time to further my efforts across other areas that earn me money. I'll also pay bills and write out plans for tomorrow,” he says. “I earned about $8 per hour before taxes and gas for the past week. If I hadn't been doing other things with my downtime, I wouldn't be able to make my bill payments today.”

Another tip for getting more fares in slow markets: Double-team your efforts. “If your market has more than one [transportation] option [Lyft, Postmates etc.], consider running more than one app at the same time,” says Teajai Kimsey, marketing director at Crystal Structures Glazing in Wichita, Kansas, and a part-time Uber driver. That away, you’ll maximize your odds of landing a fare.

You need to track your expenses for everything car-related
Since you’re an independent contractor if you drive for Uber or Lyft, you have the ability to deduct business expenses on your taxes related to your main asset: your car. But you should also be aware that the wear and tear can add up.

“Gas, oil changes, tires and brakes all get used more as you tack on the miles,” says Kimsey. “So, the gross take-home from Uber is actually going to be less when you start hitting expenses.”

Your driving violations could affect your eligibility
They’re unpredictable and no one wants them, but that’s why they’re called accidents. As a rideshare driver, you should have a backup plan in case an accident or ticket restricts your ability to continue driving.

“Both Uber and Lyft will terminate your account if you get a black spot on your driving record,” says Alex Guirguis, a former Lyft driver and founder of Off the Record, a Seattle-based company that helps rideshare drivers keep violations off their records. “A speeding ticket, even an HOV violation [high-occupancy vehicle] could get you suspended. This is true even if it happens when you're not driving a customer—i.e. on your own time.”