How to Make More Money Driving for Uber and Lyft

As a rideshare driver, making money depends on maximizing your profits and minimizing your expenses, and most of your expenses will come from your vehicle.

Rent or buy?

The first choice you have to make when you’re getting started is whether to rent a car or buy your own. It’s a big question, but according to Aaron Lawrence, an experienced rideshare driver who began using Lyft and Uber in 2014, it has a simple answer.

“I highly recommend just buying a car,” Lawrence told us. “Renting doesn’t make a lot of sense.”

Lawrence listed several disadvantages of renting:

• It locks you into one app: If you rent a car from Uber, you contractually can’t use it for Lyft, and vice versa. This is a major disadvantage given that many rideshare drivers use both apps and alternate between them according to which is offering higher prices. Moreover, Lawrence pointed out that if you use a rental car for both and get into an accident, you’re on the hook for any and all damages—your rental insurance won’t cover anything.
• Contracts not voided by damage: If your car is rendered inoperable and there are no other available cars, you’ll still be on the hook for the rental contract. As Lawrence said, “It’s for the week, no exceptions.” This scenario isn’t unlikely, since cars are rented on a first-come-first-serve basis.
• Requires long hours: To make renting viable, you’ll have to complete a certain number of rides per week, which negates one of the big advantages of a ridesharing side hustle—the flexibility. Lawrence told us, “I had to accept rides I wouldn’t normally take to reach my 30 minimum rides per week, and also to offset the $391 per-week rental fee.”

Lawrence did note that renting frees you from having to worry about wear-and-tear on your vehicle, but overall, he still didn’t recommend it. This was backed up by Tom Nathaniel, a rideshare driver with 3 years of experience, who told us that the ongoing expense of renting ate into his profits too much to make his ridesharing side hustle worth it.

What kind of car should you buy?

If you buy a car for your ridesharing side hustle, look for one that’ll be cheap to operate.

Your most obvious expense will be gas, which means that all other things being equal, you want a car that gets as many miles per gallon as possible. However, there’s another, less obvious expense that many drivers fail to consider: depreciation.

What is vehicle depreciation?

Depreciation refers to the value that your car loses over time. The older your car gets and the more you drive it, the less you’ll be able to sell or trade it in for.

It’s easy to ignore depreciation because it’s a hidden expense. You don’t have to worry about how much your car is (or isn’t) worth until it’s time to get a new one. However, depreciation can seriously eat into your profits. If you drive for four years and put away $8,000 but the value of your car drops $6,000 in that time, your profit was effectively just $2,000.

Traits of an ideal ridesharing vehicle

The car you buy should meet the following criteria:

• Used: To combat depreciation, don’t buy a new car. Those begin to hemorrhage their value the instant you drive them off the car lot and often depreciate by 20%–30% by the end of your first year of ownership. Used cars depreciate less dramatically.
• Gets good mileage: Again, you don’t want to be paying for gas any more often than you have to. If possible, get a hybrid.
• Reliable: Buy a car from a brand that’s known for reliability, such as Honda, Toyota, or Mazda.

According to Tom Nathaniel, “I think any hybrid Toyota or Honda that gets at least 35+ mpg is your go-to. Always buy used with about 30–50,000 miles. I drive a 2014 Prius and it’s very cost-efficient.”

Relatedly, don’t neglect your vehicle. No matter how reliable the brand is, it will need regular maintenance—in fact, you’ll need to maintain it much more often than a personal vehicle. You’re going to be putting a lot of miles on it, after all.

Learning to look after your car yourself is well worth your time. It’s both cheaper and faster (which gets you back behind the wheel sooner).

According to one driver we contacted, “Changing your own brake pads costs about $60 per axle and 10 to 20 minutes. Having a mechanic do it costs $175 per axle and as long as it takes for the mechanic to see you—sometimes all day.”

They suggested learning how to:

• Change your oil
• Replace your brakes and engine filters
• Rotate your tires (as well as align them, but this is very difficult to do at home)

If you’re like many people, learning to do all of this might sound intimidating, but it isn’t rocket science. We asked our contact how they learned, and their response was simple—”I learned most of this stuff just by watching YouTube videos between rides.”

Tipping is a big topic in the ridesharing world. Several Uber drivers we contacted told us tips were crucial to their income, but Aaron Lawrence told us he didn’t consider them essential.

“As far as tips go, I generally don’t concern myself with them,” he said. “If I get one, awesome. If I don’t? Eh. No biggie.”

Part of getting people to tip is, of course, doing your job well. That means:

• Being polite and friendly to your passengers
• Keeping your car clean and fresh
• Reading the room—some passengers will want to talk, some won’t
• Above all, getting your passengers to their destinations in a safe and timely manner

Although Lawrence downplayed the importance of tips, he still gave us a few pointers on maximizing them:

Play music (and make sure it’s the right music)

“I feel that music is a big part of the trip,” Lawrence said. “Drivers who don’t turn on any music are a bit odd to me, and I’ve heard passengers tell me that it makes them uncomfortable.”

Lawrence said he tailors his Spotify playlists to the time he’s driving and that overall, he plays music that’s like what you’d hear in a “restaurant or grocery store.”

“I play a lot of synthwave, not-too-heavy dance music, contemporary pop, 80s, 90s,” he said. “Just nice driving music.”

He recommended keeping the volume relatively low (under 50%), and said that he avoids playing rap, country, and religious music. He also never puts any kind of talk radio on.

Remind your passengers to grab their belongings

This is a small thing, but one that Lawrence said he makes sure to always do. “A few times a week at least, someone tells me they’ve never had a driver say that to them.”

He pointed out that beyond just making a good impression, it also protects your own time because it spares you the hassle of returning lost phones, purses, and keys.

Stock a few crucial amenities (but don’t go overboard)

One common piece of advice to maximize your tips is to stock up on amenities—little things that will make each ride feel more luxurious. For instance, some drivers offer water, mints, or other small snacks.

Lawrence was ambivalent about this advice. He said he keeps a phone charger on hand, which jives with what other rideshare drivers told us—that this is by far the most popular amenity and the only one that’s absolutely crucial.

“I don’t think a million treats and extras in the car help,” said Lawrence. “The profit margins are so thin for this job, and no one ever asks for anything.”

That being said, he told us that he does provide a few small amenities:

• Packs of gum in a pull-down armrest
• Bottles of sunscreen spray (in the summer)
• A large beach towel for passengers with dogs, which he’ll lay out in the backseat when they get in

Above all, Lawrence emphasized that the most important thing is to give people a safe and comfortable ride.

“My rule of thumb with people is to just remember the worst Uber rides I’ve ever had and do the opposite,” he said.

If you work evenings and nights, you’re going to pick up more than a few drunk passengers, and the unfortunate truth is that eventually, one of them is going to have a colorful accident in your backseat. Uber and Lyft will both allow you to submit a request for a “cleaning fee” if that happens, but it won’t necessarily cover the full cost of scrubbing your car.

It’s best to just sidestep the whole issue if you can. Lawrence told us that if you drive evenings, keeping bags of some kind (e.g., trash bags) in your back seat is a necessity. If you work an earlier shift, this is less important.

Lawrence added that if you work evenings, it’s just as important to keep your wits about you.

“I rarely drive past 11 pm, and if I do, my senses are on high alert,” he said. “If I feel that the passenger is in the danger zone, I cancel the trip.”

To rake in more tips, several rideshare drivers we talked to recommended politely asking your passengers to give you a good rating when you finish each ride.

They explained that the biggest obstacle to collecting tips is that many passengers just won’t reopen the Uber or Lyft app once they leave your car. Asking them to give you a five-star rating if they enjoyed the ride will get them back into the app while it’s still fresh in their minds. Afterward, they’ll be presented with the tip screen. Not everyone will follow through and tip you, but some people will.

Lawrence told us that he was familiar with this advice, but that he doesn’t follow it himself. “Personally, to me, it’s almost like asking for a tip,” he said.

This is something you can do if it’s within your comfort zone, but it’s not absolutely crucial. If you’re not sure, give it a try—politely ask a few passengers to rate you, see if your tip rate (and your star rating) goes up or down, and adjust your strategy accordingly.

It’s okay to be picky about who you give rides to

Remember that Uber and Lyft ratings go both ways. Another veteran driver we corresponded with, Matt Miller, recommended paying attention to the scores of the passengers you pick up.

If someone’s rating is too low, that suggests they might have behaved badly on rides in the past. This, in turn, may imply they’re less likely to tip you (or give you a positive rating). Miller’s personal rule is to try not to pick up customers with scores below 4.85 out of 5, although he’s willing to bend this during slow periods.

He also noted that a perfect score isn’t necessarily a good sign either, since everyone’s score starts out at 5. Someone with that rating might be an ideal passenger and a great tipper—or they just might be very new to the app. A score of 4.9 or above is about what you can expect from a good customer who uses the app frequently.

Unfortunately, if you drive for long enough, eventually something bad is going to happen. Maybe you’ll get in an accident and have to file an insurance claim, or you’ll kick out a belligerent passenger and they’ll lodge a complaint with Uber or Lyft that just isn’t true.

When that happens, you don’t want to be in a he-said/she-said situation—you want evidence of what happened. To that end, invest in a dashboard camera (dashcam) with a front and rear view so that it can capture what happens inside and outside your vehicle.

Lawrence referred to a dashcam as an “absolute must.” He added the caveat that Uber and Lyft aren’t always cooperative even when you’re able to provide footage backing up your side of a dispute, but that you still need a camera for accidents or “serious allegations that involve law enforcement.”

Do some passengers dislike dashcams?

Some of the drivers we spoke to said they occasionally ran into passengers who were uncomfortable with being recorded and gave them poor ratings or declined to tip them.

However, we also found that some passengers (particularly women) had the opposite reaction and appreciated the presence of the camera, especially if it was pitched to them as a safety measure. You can do this by mounting a small sign somewhere inside your car saying something along the lines of, “For your safety, the interior of this car is being recorded.” If you register your camera with Uber, the app will also inform your passengers about to prior to pickup.

Bunny W., one rideshare driver with two years of experience, was vehement about the need for dashcams: “There is no good reason to skip the camera. People are on cam in stores, in parking lots, on private property, at street lights, on phones, and on their laptops, so why is surveillance in my personal vehicle so controversial?”

Bad behavior that her camera has protected her from includes:

• Threats from unstable passengers
• Attempts to con extra stops or free rides
• Passengers illegally opening and drinking alcohol
• Allegations that she (the driver) was distracted after accidents

“I’m not recording anything bad or private, and 99.9% of the time, my recordings are deleted without saving,” she said. “If a rider is not comfy with my cameras, it’s a red flag and I’m no longer comfy with them in the car.”

What other experts say about dash cams

Miller and Lawrence both concurred with Bunny’s comments. Lawrence said that if a passenger objects to the camera, he isn’t shy about canceling the ride. He’ll often do this even if the person ultimately agrees to be recorded to protect himself from low ratings or false accusations.

“I had one guy a few weeks back who asked me to turn the camera off. I explained to him the footage gets deleted unless something goes wrong, and there was a little bit of back-and-forth before he said ‘fine.’ It wasn’t fine, so I asked him to exit my vehicle. I knew it would turn out bad for me if I had driven him home.”

One of the first tips you’ll read when you start driving for Uber or Lyft is that you should take advantage of surge pricing. As you might already know, when the demand for drivers in an area is particularly high, fares will “surge” and you’ll make more money from your rides.

It’s true that if you happen to be in the area, surge pricing can be lucrative. However, the key is that you have to be in the area. If you’re too far away, driving to the “surge” might mean spending more in gas than you’ll make up for with the heightened fare.

The maximum distance you should drive for a surge depends on your vehicle and neighborhood, but in the words of Ryan R., another veteran rideshare driver, “The advice with Uber is that you should accept no less than $1 per mile. That’s counting the miles to pick them up. If it’s less than that, the offer is a joke.”

You can extrapolate this into an easy-to-follow rule—if you have to drive more miles to get to the area than the surge is boosting the fares by (in dollars), you’re getting a worse deal, not a better one. In other words, if the surge is 10 miles away, don’t be tempted unless the fares are at least $10 higher than you’d ordinarily get.

The amazing vanishing surge

Bear in mind that sometimes, a surge will end by the time you get there. This was a frequent complaint with the drivers we talked to, who found that surges often evaporated the moment they got there.

When you think about it, this makes sense. Every driver in the area will see the same surge and many of them will head straight for it, which will drive demand back down.

Treat surges as a nice perk when they show up next to you, but don’t chase them.

How to anticipate surge pricing

We spoke to one engineer for Uber who commented that surge pricing often accompanies “hot events, such as a game.” Miller corroborated this and added that in addition to being profitable, ferrying excited passengers to concerts and games can be energizing and fun.

However, sometimes surging can be counterintuitive. Lawrence told us that he actually tends to avoid sports games, concerts, festivals, and other large events. That’s because most other rideshare drivers flock to popular venues, leaving the rest of the city needing pickups.

“In the amount of time it takes to drive to a venue, find my people, and get them out, I could’ve done three more rides and most likely made more money,” he added.

Uber and Lyft are competitors, and they don’t want you driving for each other. That said, many of the drivers we spoke to drove for both apps. There’s no law against doing that, and there’s really no way for either of them to know.

Two-timing Uber and Lyft isn’t as complicated as it sounds. Just keep both apps open (either on the same device or on separate ones), and when you see rides pop up, opt for whichever ones have higher fares.

When you accept a ride, you’ll probably want to temporarily sign out of the app you’re not using, otherwise you’ll get continuously spammed with offers for rides.

This is the most controversial piece of advice we ran into, and one that not everyone will want to follow. If you’re just driving one or two nights a week and see it as a temporary thing, it isn’t for you.

However, if you enjoy driving and think you might want to turn it into a long-term gig, look into developing a roster of loyal clients who want to ride with you, specifically and not with just any driver.

You’d be surprised how many people will be interested in this—most people prefer a driver who’s a known quantity. It’ll help if you’re willing to schedule rides at times when it’s hard to find other drivers (e.g., rides to the airport in the middle of the night).

This will mean taking your business off the app and booking at least some of your rides separately. The easiest way to do this is to print out business cards with your contact info and hand them out to passengers who you suspect might be interested.

Risks to watch out for when moving off-platform

Lawrence told us that collecting clients like this “can work,” but that there are risks involved.

These include:

• Potential liability: If you drive off the Uber and Lyft apps and get into an accident, you’ll be on the hook for any expenses you’re found liable for, such as medical bills, repair costs, and so on. You can mitigate this risk by getting commercial insurance (which isn’t included in typical auto insurance policies—you’ll have to buy it separately).
• Trouble with Uber/Lyft: In general, gig apps don’t like it when you try to take customers or clients off-platform (for the obvious reason that they won’t make any money that way). Lawrence said that there’s a “real risk of a passenger being uncomfortable with the proposition and reporting it,” adding that it’s possible the company might flag your account for fraudulent activities (although he noted that this was just a hypothetical, and not something he’d experienced).

On the plus side, if you take steps to mitigate these risks and build up a client base, you’ll have much more control over your pricing and customers.

“If a driver has the right insurance, they should fish for private clients,” Lawrence said.

This is a big step, but it’s the best one to take if you decide you want to turn your ridesharing gig into a real career instead of a part-time side hustle.