Is Driving for Uber Worth It?

If you're looking for a lucrative side hustle, then you've probably thought about driving for Uber. As one of the main drivers behind the gig economy, Uber offers flexible work with decent pay and bonuses. But when compared to other side hustles, like delivering groceries through Instacart or driving for Lyft instead, is becoming an Uber driver really worth your time? Let's break down what you can earn and see.

How much do Uber drivers make?

With tips and bonuses factored in, Uber drivers make about $21.14 an hour on average, according to GridWise. At $21.14 an hour, you would gross roughly $3,674 per month, if you drove 40 hours at that rate per week.

That said, how much you actually make will depend on where you live, when you drive, the ratio of drivers to passengers in your area, how many bonuses you get, and your tips. In fact, a more realistic wage range might be a low of $7.25 or a high of $38.85 (with an average of $19.36), based on 292 salaries reported to the job site Indeed.

As far as how Uber drivers make money, three factors determine your payouts:

• Driving fare: This is how much Uber pays you to complete rides. Depending on where you live, this fare could be determined upfront based on market conditions or on a per-minute, per-mile basis.
• Tips: You get to keep 100% of the tips you make.
• Promotions: Every now and then, Uber will pay you extra to drive during surge hours (when demand for drivers is high), reward you for completing quests, or give you a boost for driving in certain promotional zones.

In addition to these, you might make extra money if your car is fully electric or if it's eligible for UberXL or UberBlack.

Does Uber cover driving expenses?

Uber doesn't pay for driving expenses, like gas or wear and tear to your car. That said, Uber does provide car insurance when you're using the platform and your own insurance doesn't apply. Here's what the coverage limits are under Uber's plan:

• $50,000 in bodily injury per person
• $100,000 in bodily injury per accident
• $25,000 in property damage per accident

This 50/100/25 coverage meets the minimum for most states. But if you're not comfortable driving with just the minimum, you might need to buy additional car insurance to meet your needs.

What extra perks does Uber offer?

Since Uber drivers are independent contractors, they don't have access to standard employee benefits, like 401(k)s and health insurance.

That said, Uber takes care of its drivers in the form of other perks, like savings on gas and access to car maintenance discounts. Like other platforms, Uber has a tiered rewards system and doles out different perks based on your level. Here are just a few of the top perks you could get driving through Uber:

Uber doesn't disclose how you can achieve Gold, Platinum, or Diamond, as each market will have different requirements. But in general, the more frequently you drive -- and the more frequently during high-demand hours -- the more likely you'll advance up in tiers.

If you can achieve Diamond status, however, you can get more cash back on gas than even some of the best cash back credit cards. And the one-year membership to Costco ($60 value) is a unique perk unmatched by other ride-hailing and delivery platforms.

So, should you drive for Uber?

Driving for Uber certainly has its benefits. You can set your own schedule, drive as much as you want, and earn promotions and tips on top of normal driver fare. It can be a great way to earn some extra cash, especially if you're trying to hit certain personal finance goals, like paying down debt or building an emergency fund.

Driving for long periods of time, however, might not be sustainable. The wear and tear on your car could lead to needing expensive repairs, which Uber isn't going to cover, and you might work long weeks only to make below the median salary for U.S. workers ($69,717 in 2021, according to research by The Ascent). It could be suitable for part-time work, but if you're looking for a career, your area will likely need high demand for Uber drivers for you to receive adequate pay.