If you have a qualifying vehicle, a smartphone, and a driver’s license, then you have an opportunity to make money by being an Uber or Lyft driver. The apps help you with the rest of what you need to start earning with this opportunity. You will be picking up passengers who need a ride, then take them to their destination. If you receive a high enough of a ranking from each transaction, then you can potentially earn enough to turn this opportunity into a career.
Uber and Lyft are available in more than just the big cities these days. You can find drivers around the world providing this option as an affordable and safe way to ensure that you arrive at your intended destination. Although some people might try to impersonate their status with these apps, working as a driver gives you access to your community in unique ways.
You are also helping people at a time when they need some assistance. You’ll be transporting people back-and-forth from work, to sports venues, concerts, and even the grocery store. It is more affordable than a taxi in many communities, and your qualifying vehicle probably feels more inviting as well.
If you are thinking about a side hustle to earn some extra cash, then here are the pros and cons of being an Uber or Lyft driver that you will want to consider today.
List of the Pros of Working for Uber or Lyft
1. Uber and Lyft allow you to set your own hours for work.
When you become a driver for Uber or Lyft, then you get to be in charge of the schedule that you keep. It is up to you to determine where you want to drive, when you want to get behind the wheel, and how long you can earn money each day. Although some communities may not offer many rides during certain times of the day to force you into specific schedules, you still have the power to take the day off, drive for a few hours, or manage your family needs while earning some extra cash.
2. You can work any time with Uber and Lyft.
When you start driving for Uber or Lyft, then you can be active at any time during the day or night. It is an option that is available 24/7, including weekends and holidays. Since the app comes with you on your smartphone, you can decide to go online whenever you want to start making some money. You can drive for a couple of hours before work, pick up a couple of weekend shifts, or turn this into a full-time opportunity.
Assuming that you have a qualifying vehicle, driving for these companies is one of the easiest ways that you can start earning some extra money. The sign up process is very simple, allowing you to drive as soon as tomorrow in some cities.
3. The companies help you to earn more during peak demand hours.
When Uber and Lyft experience multiple ride requests in the same area simultaneously, then their surge pricing mechanism begins. Uber calls this “dynamic pricing.” It is an advantage that allows you to make even more money because you can provide rides to people at the time when you are needed the most. There is a color-coded heat map that you can access through the app to determine where the highest fares will be in your community. Then all you need to do is make yourself available for routes during that time to start making the extra cash that you need.
4. You can get paid instantly for the work that you do.
Uber and Lyft offer a feature that allows you to get paid instantly for the driving that you do on their behalf. If you drive for Uber, then your earnings are available to you at all times if you are a driver partner in the United States. As long as you have a debit card, then you can cash out with this option up to five times per day. All you need to do is sign up through the app to make it happen. If you use your personal debit card, then there is a $0.50 charge per transaction.
Lyft gives you an Express Pay option if you prefer to avoid the weekly paycheck scenario. You can qualify for this benefit whenever you reach $50 in mentor payments, referrals, and earnings. It also comes with a $0.50 fee if you take advantage of this instant option, but then you are not stuck waiting for payday to come around.
5. There are options for you to drive almost anywhere in the world.
If you decide that a change of scenery would be a good thing for yourself or your family, then driving for Uber and Lyft allows you to take your job along with you. Riders can request your services in hundreds of cities around the world, and Uber has more opportunities for you than any other ridesharing app. Over 75% of the U.S. population lives in an area where you could be driving and making some money.
Because there are so many different places where you could help people to safely reach their destination, your opportunity to earn some cash while being behind the wheel may not be adversely affected if it is time to move to a new home.
6. You can earn money in multiple ways with Uber and Lyft.
If you decide to drive for Uber, then you can start earning money by delivering packages or food items to customers through the UberRUSH or UberEATS programs. You don’t even need to own a vehicle in some cities to start earning money through this version of the driving app. Bicycles and scooters work just as well. You only need to be 19 to start earning money in this way. Uber drivers can also make these deliveries to diversify their income.
Lyft only provides passenger services at this time, but the company does allow you to earn tips from your passengers and keep the full amount. Uber allows tipping through UberEATS and riders, and zero service fees apply to that figure as well.
7. It makes it easier to manage your money when driving for these companies.
If you have specific financial goals to reach, then driving for Uber or Lyft can help you to find the success you want. Uber gives drivers access to daily and weekly earnings figures to ensure that your income goals stay on track, which is an option that not all ridesharing apps offer. Both companies allow you to work when you want, making it possible to arrange your schedule around your work instead of the other way around.
Even if you have a disability that would keep you out of the regular labor force, having the ability to drive can help you to earn more money than you might receive with disability payments. You can use this cash to supplement your retirement funds if you want. The amount of flexibility that is available through this companies allows you to stay in full control of your needs at all times.
8. The app can give you directions to where you need to go.
If you are not entirely familiar with the city where you start driving for Uber and Lyft, then you can use the in-app navigation to ensure that you reach the rider’s location and deliver them to their destination. You don’t need to operate a secondary GPS system to be effective at your job with this feature. There are even turn-by-turn directions available to you that make it simple to know that you’re on the right path.
9. You can rent or lease a vehicle to start driving in some situations.
If you want to start driving with Uber and Lyft today and you don’t have a vehicle, then these companies can help you to get one. The vehicle becomes yours to use as you please, and then the payments that you owe become automatically deducted from your overall earnings. When you want to work for Lyft, this option is an excellent benefit as some vehicles might not pass the inspection process.
You will receive a list of dealers which work with these programs to ensure that the vehicle you receive will help you to start driving right away. Then you pick out the vehicle, start driving it, and pay off what you owe based on what you earn. Many of the cars available in the program have no or low upfront costs, and then you can return it if you don’t need it on a full-time basis.
10. Some drivers can qualify for initial sign-up bonuses.
If you are thinking about becoming a driver for Uber or Lyft, then you might qualify for a bonus of $1,000 (or more) after you complete a specific number of trips in your community. Lyft provides this guarantee if you can provide 125 rides in your first 30 days, while Uber guarantees that figure if you deliver 150 rides. Whatever amount falls short of that figure will be placed into your earnings account so that you know that a month’s worth of work can pay off if you stay active.
You can also earn performance-based bonuses based on a variety of factors. This income is optional, but can be a lucrative incentive to work when you can to offer rides in your community.
11. Some cities offer a minimum wage that you can earn.
New York City now requires Uber and Lyft (and all other rideshare companies and apps) to pay their drivers an hourly wage of $17 after factoring in their expenses. Cities like Seattle and San Francisco are looking at similar measures to improve the potential income levels that drivers can earn behind the wheel. Although this requirement caused Uber to raise its prices in the targeted locations, you do have more of an income guarantee to consider thanks to advantages like this one.
List of the Cons of Working for Uber or Lyft
1. Drivers are responsible for all of the costs of this service.
Although driving for Uber and Lyft does provide you with a lot of flexibility for your schedule, it comes at a price that might be too high for some individuals. You are responsible for all of the costs that you encounter while providing this car service to your community. That means you are responsible for the car payments, rental costs, or lease which is necessary for you to start driving in the first place. You will be paying for your automotive insurance, which may be higher because you’re transporting customers. If you need to clean the vehicle or purchase fuel, then that comes out of your paycheck as well.
Uber and Lyft retain control over your compensation in every facet. That means if you are sick and cannot get to work, then there are no income protections in place for you. Should you be in an accident while driving, then there are no protections in place.
2. You really don’t get to drive whenever you want if you want to make money.
Most of the drivers who work for Uber or Lyft will conform to the pricing schedules that the companies use in their cities because that’s how they can make the most money. Uber and Lyft want you to drive at specific times because the fares are too low outside of the high-cost windows. That means your schedule is going to be something closer to 7-11 AM and 3-8 PM every day.
Even when you stay active for the busiest hours of the day, there is no guarantee that you are going to find a fare. Driving without a passenger creates “dead miles” where no compensation is available. These costs will cut into your earnings, and they can be highly unpredictable.
3. Drivers must carry commercial rideshare insurance.
If you decide to start driving for Uber and Lyft, then you must carry commercial rideshare insurance on your vehicle. There are no exceptions to this rule in any community. Should your passenger experience an injury in an accident, whether it was your fault or not, then they could potentially hold you liable for their medical expenses and other costs. Because most Uber and Lyft drivers are independent contractors and not employees, that means your assets are on the line in this circumstance.
Uber and Lyft do offer a limited policy which drivers can access, but the coverage may not be suitable for every situation. You could find yourself spending an extra $100-$200 per month to protect yourself, which cuts into the guaranteed initial amount that you could earn.
4. The terms of service can and do change frequently with Uber and Lyft.
When you agree to become a driver for Uber and Lyft, then you must stay up-to-date on all of the terms and conditions which govern your agreement. There are plenty of rules that cover the bonuses, fees, and fares that occur with every ride, and those rules can change at any moment. If you are not constantly reviewing the updates that come through, then you could find yourself in violation of the rules unintentionally and losing your ability to serve as a driver through the app.
5. Your wages may not be reflective of the work that you are doing.
Many of the drivers who work for Uber and Lyft are not fully aware of the actual amount they earn by providing rides or delivery services with their vehicles. When you take into account the wear-and-tear on your vehicle, the fuel expenses, cleaning costs, and all of the other needs that go into this employment opportunity, there are some drivers who struggle to make more than the minimum wage in their community.
That is another reason why many of the drivers decide to conform to the hours that Uber and Lyft want you to be active, even if it doesn’t always work with their schedule. If you are earning a small fare with each ride, it may not be enough to cover all of your expenses.
6. The loans or rental costs for new vehicles are very high.
When researchers Declan Cullen, Kafui Attoh, and Katie Wells looked at the structure of the loans that Uber encourages for drivers to get into a new or qualifying vehicle, they discovered that the loans offered to them were comparable to the subprime mortgages that lenders handed out right before the Great Recession began in 2007. If drivers cannot qualify for this lending product, then they direct them to Enterprise or another rental agency where leasing rates are even higher.
Many of the drivers do not have the information they need to purchase a car because the idea of driving for Uber and Lyft can be a last-second decision to save a financial situation. This structure creates a debt-to-work pipeline that can be challenging to get out of because the driver is asked to take a significant risk on the chance that they might earn some money.
7. Uber and Lyft do not follow the same rules as taxis to limit competition.
Taxi drivers and those who work for Uber and Lyft are typically independent contractors, but that is where the similarities end. Most cities have laws in place that limit the number of hours a taxi driver can work, how many cars are on the road at once, and other measures that help to protect the public. Uber and Lyft are generally exempt from all of these regulations.
Because there is such a strong need to earn an income with some drivers, it is not uncommon to have them fall asleep at the wheel, forget a fare, or encounter other safety hazards. In the study mentioned in the previous point, an Uber driver admitted that they dozed off while driving after working for 16 consecutive hours.
8. Some drivers are experiencing lower pay and rising costs.
Vox tells the story of Steve Gregg, 51, who has driven for Uber and Lyft since 2017. He started driving while coming off of a long-term disability with a job at the parks department. He liked the gig, and it helped him do something while recovery from a neck injury. Then his pay started to decrease, the performance-based bonuses were more challenging to earn, and there were no subsidies for rising fuel prices.
“When I started two years ago, I could put in a solid 40 hours a week and do well,” Gregg told Vox. “Now I’m doing 50 to 60 hours just to make the same amount. When I leave this job, I’ll probably be in debt just in order to feed my children.”
Verdict on the Pros and Cons of Being a Driver for Uber and Lyft
Many of the disadvantages that come with being a driver for Uber and Lyft would disappear if the companies would classify them as employees instead of as independent contractors. Because that status would entitle you to sick days, holidays, healthcare benefits, and workers’ compensation, that is not likely to happen soon.
If you decide that driving for these companies could be a good way to start earning an income, then make sure that you have a qualifying vehicle under your ownership already. Working with the high-interest loans or rental fees will quickly eat away at your financial situation. When you add in the commercial insurance that is necessary, then your costs can quickly overwhelm your income.
The pros and cons of being a driver for Uber and Lyft can help you to achieve a more secure financial footing if you keep track of your expenses and income every day. There is some flexibility with your hours and other benefits to consider, but each situation must be individually evaluated to determine if it is a good opportunity to pursue.
Keith Miller has over 25 years experience as a CEO and serial entrepreneur. As an entreprenuer, he has founded several multi-million dollar companies. As a writer, Keith's work has been mentioned in CIO Magazine, Workable, BizTech, and The Charlotte Observer. If you have any questions about the content of this blog post, then please send our content editing team a message here.