Uber fights hard to maintain its business model. The company does not employ drivers like many traditional taxi companies, but instead allows people to remain as independent contractors. This means that all Uber drivers essentially work for themselves, meaning that this simple ride hailing app has created a whole new section of people who enjoy the freedom of being self employed.
Life as an Uber driver is very different to life as a full-time employee. It works great for some people, but for those looking for employment benefits, it’s not ideal.
The Uber website makes it clear that average incomes of their drivers vary quite drastically. Drivers in San Francisco, for instance, earn on average $732 per week in net earnings. Drivers in Los Angeles will earn $616, and in Chicago they will make $648. Boston-based Uber drivers earn the same as San Francisco – $732.
The amount an individual earns, however, also depends on the hours they work. Money made is calculated by adding a base fire to time and distance rates. In Los Angeles, the charge is $0.15 per minute and $0.90 per mile, whereas in San Francisco, the fee is $0.22 per minute and $1.15 per mile.
Uber drivers also need to understand Surge pricing. This means that when there is a high demand for drivers, fares will increase. The prices go up as there are not enough drivers in a given area to accommodate all the people who need rides. A rider who sees a 1.3x surge on their app means that the regular fee will be multiplied by 1.3.
Surge pricing can benefit drivers, allowing them to earn more, but it does also mean that competition for these rides increases.
Income can be consistent, and Uber claims that their drivers earn on average $25-$35 per hour, putting the service at above minimum wage.
In some cities, Uber does not even require drivers to work a minimum number of hours, meaning it’s possible to work as little as one job per month. Almost all drivers do significantly more work than this, but the flexibility means it’s possible to work at any time of the day and still make good money.
Uber drivers are also given a little bit of security in terms of insurance. While taking out car insurance is still necessary, Uber gives all of its drivers up to $1 million of coverage and even provides reimbursement if a rider spoils the interior of their vehicle.
Uber drivers must abide by a strict set of rules in order to enjoy these freedoms. Every city has different rules relating to how old a vehicle can be, but across the world, it is necessary to drive a four-door sedan to ensure that passengers can easily get in and out of the car.
Drivers must also have their cars inspected to ensure they are suitable, and will have to undergo a criminal background check to ensure that they fit with Uber’s strict guidelines of who can and cannot drive for them.
As long as a driver is willing to stick to the rules, they can earn a good living from Uber.