Rideshare Driver

“Ridesharing” is a type of gig work that involves driving people around in your own personal vehicle, essentially providing taxi services.

Rideshare drivers land work through apps, primarily Uber and Lyft. As a driver, you’ll sign into the app whenever you want to work and accept jobs as they pop up. There’s no need to schedule shifts ahead of time.

When you accept a job, you’ll drive to the customer’s location, pick them up, and drive to their destination. After you drop them off, you’ll get paid.

Both major rideshare apps pay on a per-gig basis (rather than paying an hourly wage). You may sometimes be eligible for bonuses if you drive during especially busy periods, and optionally, your customers can tip you. They won’t all do that, but if they do, you’ll keep 100% of what they give you.

At its heart, ridesharing is very simple, but a certain amount of strategy goes into optimizing your earnings. Here’s how to make the most of your driving-based side hustle:

Provide a good experience for your riders to boost your tip rate

It goes without saying that to make the most of your time, you want to collect tips from customers (and the larger and more frequent they are, the better). This means providing a good experience.

Keep your car clean and tidy. Hang a couple of air fresheners inside, and consider stocking a few basic amenities for your riders, such as phone chargers they can use, tissues, or bottles of water.

It’s also worth developing your sense for when people want to chat or be quiet—you’ll pick up introverts, extroverts, and everything in between.

Budget for your expenses, and look into tax deductions

As an independent worker for a gig app, you’ll be responsible for your own expenses. The biggest one is gas, which Uber and Lyft won’t pay for.

You’ll also be responsible for your own taxes, as well as vehicle maintenance expenses, which will be significant (after all, you’ll be putting a lot of wear and tear on your car).

Budget at least 35% of your profits for your expenses so that you aren’t caught by surprise when tax season rolls around. Also, look up what tax deductions you’re allowed to take; the IRS currently allows you to write off a fairly hefty $0.67 per mile you drive.

Use more than one app

You can (and should) use both Uber and Lyft at the same time. This isn’t against either app’s terms of service, and you won’t get in trouble for it.

Work may sometimes be scarce (or poorly paid) on one app, and plentiful and lucrative on the other. Don’t limit yourself. Install both apps and accept gigs from whichever one is paying more at any given moment.

Pros

Driving for Uber and Lyft isn’t a bad side hustle. Most drivers agree that it’s:

• Flexible: You can drive on your own schedule, working exactly as much as you want and no more. Any time you want to earn money, you just have to duck into your car and load up the app.
• Potentially enjoyable: If you don’t mind talking with strangers, ridesharing can actually be fun. You get to explore your city, meet interesting people, and get paid for it.
• Reasonably well paid: As a rideshare driver, you’ll generally make over $20 per hour, which isn’t bad for a job that anyone with a driver’s license can do.

Cons

Of course, ridesharing also has its downsides. Drivers also agree that it’s:

• Expensive: As mentioned, fuel and your other expenses will take a big bite out of your profits. Some of these expenses are also “hidden” unless you track them carefully (e.g., you might not correctly calculate your maintenance costs until the first time you have to take your car to the shop).
• Socially draining: As a rideshare driver, you’ll have to interact with strangers for long stretches. If you’re an introvert, this probably isn’t the right side hustle for you.
• Potentially risky: Unfortunately, rideshare driving isn’t completely safe. Traffic accidents are always a possibility, and so are unruly passengers (especially if you drive at night in areas with lots of bars). As a driver, it’s worth investing in both an inward- and outward-facing dash cam for both your protection and your passengers’.