Chances are you have seen ads for Uber claiming that drivers can make up to $25 an hour or something like that. These ads have obviously worked.
Over the last few years, a huge influx of people decided to become a rideshare driver for Uber. No joke, between 2010 and 2014, the number of drivers grew by about 69 percent.
But how much do Uber drivers really make?
In general, the answer to this question depends on the time of day, location, and weather. Factoring in all of this information, we have generated an average wage for the entire rideshare industry. As you may know first hand, drivers usually earn far less than expected.
From our research, we have found that the range varies from $11 an hour to as high as $18 an hour. But why is the range so high?
Today, we will dive into this confusion and reveal what is actually going on.
- How Much Do Uber Drivers Get Paid?
- How Much Do Uber Drivers Really Make?
- Reasons for Earnings Differences
- Fare Breakdown
- How Can You Earn More?
- Income Differences of Driving Programs
- Expenses You Must Pay
How Much Do Uber Drivers Get Paid?
There are two main components drivers often overlook when figuring out how much drivers earn. The first is how much an Uber ride costs for the passenger.
Higher-end Uber rides cost quite a bit more than other Uber rides, such as UberPOOL. Due to these widely different prices, drivers may earn far more or less depending on which type of ride request they are accepting.
Another issue is business expenses.
This umbrella category covers a lot of different aspects of an independent contractor’s costs. Business expenses include vehicle maintenance, gas, and insurance costs. Although these factors vary based on location, the general concept remains the same. Having to pay for each expense out of pocket eats away at a driver’s profit.
Before we take an in-depth look into the factors that make up the earnings, let’s first take a look at how much Uber drivers actually earn.
- Related: How Much Do Lyft Drivers Make?
How Much Do Uber Drivers Really Make?
To determine how much Uber pays drivers, it’s important to look at some cold hard data. Keep in mind, the numbers we are using in this article are used as a general representation of what the average Uber driver wage amount incoming reports are stating.
To get a bit closer to the mark, here are some reputable sources.
The Ridester 2018 Independent Driver Earnings Survey is an excellent source on how much Uber drivers are earning.
For this survey, drivers self-reported their earnings and total income and provided screenshots from Uber to back up their claims. What the survey shows is rather remarkable.
The survey polled over 2,600 drivers with 62,583 paid hours totaling $1,027,585 in earnings. Regarding tips, the survey shows that drivers report earnings 35.53% higher than they actually are. It also shows that drivers aren’t satisfied with their profits.
So this begs the question, why do so many people continue to drive with Uber?
It’s worth pointing out that the national average hourly wages vary quite a bit per the type of Uber service provided.
Here’s the breakdown of median hourly income for the various vehicle types:
- UberX drivers earn $13.70/hour
- UberXL and UberSELECT drivers earn $14.85/hour
- UberSUV and UberBlack drivers earn $25/hour
When it comes to tips, over 90% of UberX drivers reported receiving no tips or tips less than $5. With tips added in, the average hourly rate for an UberX driver is $14.73.
It comes as no surprise that where you drive also affects how much you can earn. San Francisco, Seattle, and Long Island, NY rank among the highest paying areas, with drivers averaging around $25 per hour.
Tampa, Houston, and Springfield, MO rank among the lowest paying cities with drivers averaging under $9 per hour.
Akron, OH is the city with the lowest hourly rate by far. Drivers are making just $4.94 per hour, which is substantially less than the minimum wage.
In most cities, UberX drivers aren’t exactly raking in the big bucks either. The data shows that New York City might be the only city in the country where UberX drivers can expect to average over $20 per hour.
But if you’ve lived in, worked in, or visited Manhattan, you know that $20 doesn’t go very far.
Another interesting thing we learned from the Ridester survey is the way that riders tip. The reality is, most passengers don’t tip at all.
- 36% of drivers claim to receive no tips at all in an average night of driving
- 28% claim to receive less than $5
- Approximately 10% say they earn tips between $6 and $10
- 7% of drivers receive between $11 and $15 in tips each night
- Only 10% report earning more than $16 in tips in an average night
The results of the survey show another interesting thing: most Uber drivers are not satisfied with their earnings and based on the numbers above, this isn’t too surprising.
70% of all drivers gave Uber three or fewer stars (out of five) on income satisfaction. The average satisfaction rating by drivers is only 2.9 stars out of five. If Uber wants to retain their drivers and bring on more, they’re going to have to do a whole lot better.
So are drivers sticking around? On average, 46.4% of Uber drivers stay with the company for less than one year. 23.5% say they have driven for Uber for one year, 19.2% for two years and only 11% have stuck around for three years or more.
If you can make good tips and leverage your Uber referral code, you are likely to see higher earnings and better profits. Currently, Uber is offering hundreds of dollars in bonuses for drivers that refer other drivers.
Drivers can also earn an extra $5 per passenger for every new rider they bring to the rideshare service.
To sum it up, Uber earnings vary from city to city. New York drivers earn about $29.34 per hour, while Nashville drivers earn an hourly rate of $8.11.
SherpaShare’s Smart Driver tools assist rideshare drivers with the process of spotting lucrative routes in their city. Since they also offer bookkeeping tools, SherpaShare has info on how much drivers earn after taking expenses into consideration.
According to SherpaShare, many entry-level Uber and Lyft drivers are not even breaking minimum wage. Of course, this is only a portion of the rideshare industry. Having said that, it appears that in the vast majority of the country, Uber drivers make around $11 an hour.
If you’re making only $11 an hour, it would be very difficult to drive for Uber as a full-time job. This may not matter to you as much if you’re driving for Uber part-time, but keep in mind there are many ways to boost your earnings (we’ll get into that later).
Glassdoor is an excellent resource for getting insider information about companies, including Uber. Their reputable system makes it easy for users to report how much they are making as well as the pros and cons of working at said company.
In an attempt to offset the low rates, some drivers are taking advantage of signup bonuses and referral codes being offered. Capitalizing on Uber driver referral codes is pretty tempting too, considering some of them are worth hundreds of dollars. Many speculate that Uber is using this type of marketing plan in an effort to compete with Lyft. Currently, Lyft is giving away bonuses worth up to $1,000.
Reasons for Earnings Differences
First off, if you’re driving in a more popular market like San Francisco or New York City, you’ll likely have a higher income. Bigger markets mean there are more opportunities to drive, giving you a better chance to fill every second of your shift.
Smaller markets that are less saturated with potential passengers will yield lower paychecks for drivers. The fewer opportunities for picking up passengers, the more likely you’ll have downtime waiting for riders during your shift.
To compare, the median hourly earnings for a driver in New York City is $21.92, while just across the state in Buffalo, New York, the median hourly earnings is only $9.74. You could be driving in the same state but a different city and make two times more per hour.
Second, the time in which you’re driving and how you’re planning your shifts also makes a big difference. Experienced drivers tend to make more money because they know how to play the game. You’ll eventually know when and where you should be driving to maximize your earnings with the help of peak-time bonuses, like surge pricing.
If you’re driving during peak hours that pay the highest fares, you’ll be making a higher hourly wage. However, this means you must be willing to drive at times when you might not want to, like late nights on the weekend.
What it all comes down to is that you’re in control of how much money you’ll be making. If you’re willing to put in longer hours during peak driving times, then you’ll see higher paychecks on a regular basis.
To give you a better idea of what we’re talking about, let’s look at what goes into each fare.
By understanding what goes into each fare, we can find opportunities for you to earn a few extra bucks during your shift.
For every ride you give out, you’ll see the following line items in your passenger fare receipt.
- Base Fare: This is a fixed booking fee that is included in every fare.
- Time: For every minute you drive, you will be compensated with a per-minute rate multiplier.
- Distance: Distance driven is also multiplied by a per-mile rate. Very short rides result in a minimum fare payment.
- Wait Time: The longer you wait for passengers, the more you’re paid.
- Long Pick-Up Time: Long distance trips earn you higher fares.
- Surge and Boost: This is how you’re rewarded for driving during busy peak hours. Fares are multiplied by the current “surge” multiplier.
- Tolls: Any tolls you paid while driving are paid back to you.
As we mentioned before, much of your hourly wage will be dependent on when you’re driving and how many hours you’re putting in. So how can you maximize your earnings?
How Can You Earn More?
There are a few things you can do to ensure that you make a higher hourly wage.
If you decide to drive during the busiest hours that have the highest demand, you’ll likely be racking up surge bonuses that multiply your total fare.
Smart drivers will take advantage of surge pricing and plan their shifts around when they think they have the best opportunity to receive these inflated fares.
When there are big events, inclement weather, or rush hour traffic, fares will be multiplied by up to 2x.
Head to Uber’s website to get a detailed description of your city’s best locations and times to drive. Every city has their own hotspots, but to give you an idea here is a breakdown of San Francisco’s high demand locations and times.
If you plan your drive time around these factors, you’ll receive the biggest bang for your buck and your hourly earnings will skyrocket. A simple $15 fare could increase to $30 if you receive a 2x surge multiplier.
Another way experienced drivers earn an increased fare is by providing excellent customer service. If you give passengers a great overall experience, you have a better chance of receiving a tip from them.
Uber doesn’t take a percentage of your tips, so you’ll keep 100 percent of the tips you receive. Provide great service and you may earn a few extra bucks here and there from your passengers.
Income Differences of Driving Programs
A sure way to bring in a higher paycheck is to enlist in higher-paying driving programs. If you own or lease a vehicle that qualifies for a more premium Uber option, then you should definitely take advantage of this.
UberX is the default option that all drivers will qualify to drive for, however, UberX is at the bottom of the totem pole when it comes to earnings.
UberX is the lowest paying service level. After Uber takes their commission, drivers at this level only make $0.73 per mile driven.
Depending on what vehicle you own, you may qualify for more driving options that offer higher wages.
For instance, if you own a larger vehicle like a van or SUV, you can start driving for UberXL. Drivers at this service level make almost double what UberX drivers do, bringing in $1.26 per mile driven.
Better yet, if your larger vehicle is new and has that luxurious feel, you could even qualify for UberSUV, which is a luxurious SUV option. Drivers at this stage bring in a whopping $3.00 per hour. That is over four times what an UberX driver makes when looking at per mile driven.
These high-end Uber options mean higher fares for passengers. It also means that you’ll be dealing with a different type of customer.
Customers who are using the more premium options that Uber offers are paying more and will expect a higher level of service. If you deliver a great experience, you can hopefully earn higher tips to match your service.
Expenses You Must Pay
What many new drivers will forget is the fact that there are many expenses tied to driving for Uber.
It’s easy to be distracted by the thought of being your own boss, scheduling your own hours, and receiving those big paydays that surge multipliers will yield.
The expenses that drivers are responsible for can quickly offset the wages you’re making. As we mentioned before, once you subtract all of these expenses, median hourly earnings drop from about $14 per hour to below $10. That’s a huge difference!
The downside of driving for Uber is that you’re responsible for all of these personal expenses. Very few things are covered by Uber, leaving you with the bill when it comes to many expenses.
Uber doesn’t provide any financial assistance when it comes to the following expenses:
- Automobile insurance
- Vehicle maintenance
- Cleaning fees
- Personal taxes
In regards to personal taxes, it’s important to remember that you’re an independent contractor and will be responsible for all of your own taxes. Your taxes won’t be withheld, so make sure you remember to set some cash aside for when tax season rolls around once a year.
How Much Are You Willing to Put In?
As a driver, you have a great deal of control as to how much you’ll make. The single biggest factor is how much you’re willing to put in.
If you only work a few hours here and there, you’ll likely not have a large paycheck and potentially a lower per hour rate.
But if you treat your new career as a full-time job, give great customer service, drive in the right locations, and take advantage of surge pricing as much as possible, your driver earnings will be much higher.
The more experience you get as a driver, the more you’ll understand how to make a higher income and be more satisfied with your new employment in the gig economy.