I was attracted by the huge sign-up bonus incentive Uber offered to new drivers through referrals back in 2016. On a long Uber ride, I asked the driver several questions regarding his perspective and experience being a rideshare driver for Uber. The driver confirmed my positive thoughts about being a rideshare driver. By the end of the trip, the driver sent me a referral code that I used to qualify for the bonus. In addition, the driver offered his support until I completed the ride requirements to achieve the promotion. I have to say, those were the easiest one thousand dollars ($1,000) I ever made in a few days.
Today in 2018, however, a lot has changed. Although I still make the same amount of money per week I used to make back when I started, I have to drive more and spend more time on the road just to make the same amount.
Why Full-Time Driving is a Bad Idea
Removal of Rush Hour Incentives, and Low-Paying Promotions with Ridiculous Completion Requirements
When I first started, Uber sent me the $500 sign-up bonus as soon as I completed the rides requirement. After that, Uber provided incentives for me to drive during rush hours in Los Angeles (7:00AM-9:00AM and 4:00PM-7:00PM) in addition to other incentives to complete a weekly number of rides.
In the beginning of 2017, the incentives used to be $3 per trip completed within those time frames. Over time, the rush hour incentives went down from $3 per trip to $2 per trip, and again to $1 per trip, until one day Uber removed the rush hour incentive completely. The rides completed during these times used to also be eligible for weekly ride requirements, which together with rush hour earnings yielded a high weekly pay for me. However, today the rush hour incentive no longer exists and the requirements for the weekly incentives are ridiculously high.
Time is Money—I Spend More Time, I Spend More Money
Perhaps the ever increasing traffic jams in Los Angeles are not Uber’s or Lyft’s fault. However, the reason why I have spend more time the road, including during traffic hours, is that Uber and Lyft no longer provide promotions or bonuses that allow me to earn a living. As a result, I have to spend more time on bumper-to-bumper traffic just to make the same I was making when I was completing promotions.
If time is money, and I am spending more time on the road to make the same amount of money, then I am actually losing money. For instance, the car's drivetrain tends to wear out faster in stop-and-go traffic. As a result, the money I earned by driving in traffic eventually was spent on maintenance and repairs. In other words, I was driving in traffic just to pay for maintenance and repairs that I would not need if I did not drive in traffic (note the irony).
Why It Makes More Sense to Quit Full Time Driving
Driving for Uber and Lyft is just like any other business; you have to invest money to earn money. In this case, gasoline, car insurance, DMV fees, maintenance and repairs represent the money a vehicle owner has to invest to keep your car running and making money. If you rent, lease, or finance the vehicle you drive, then this is an additional cost you have to pay.
At this point in my experience driving for both Uber and Lyft, the money I spend keeping the car running month to month is approximately $795 (gasoline, insurance, maintenance, and car payment) while the money I earn by the end of the month from ridesharing is $1650. If you subtract my expenses ($795) from my earnings ($1650), I have $855 left over month to month.
I am still making money and I am still earning a profit. However, the money and time I invest into driving does not pay enough to encourage me to keep driving full time. Any part-time job in Los Angeles would easily pay me $855 a month for a few hours of my time every week. Therefore, it does not make any sense to invest all this time and money into rideshare driving when I could easily be making that same amount of money in less time in any part-time job.
Why Part-Time Driving is a Great Idea
Even though Uber and Lyft no longer offer attractive incentives, both companies still offer some descent incentives to drive during certain times and occasions. For instance, I still take advantage of the high surge price during concerts and sport events. Also, I drive when there are good surge prices during certain times and on certain locations that generate good side money for me. In addition, both Uber and Lyft are available for me anytime I want to drive. This means I could drive when I have a day off work or when I am bored at home. Furthermore, I can use Uber and Lyft destination feature every time I have to drive far away and want to make money on my way there and on my way back. I use this feature every time I visit friends or family on who live on distant cities of the state.
Although I no longer drive full time, occasionally driving for Uber and Lyft generates great side income for me. Driving full time represented a cost in terms of money and time, but occasional rideshare driving is actually a wonderful idea.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
Cecil Kenmill from Osaka, Japan on September 11, 2018:
Good information here. I guess the new share economy has its growing pains. Thanks for the inside scoop!