Driving for Uber: What you need to know

Uber is an online-based ride sharing app that allows regular people (with clean criminal records) to offer rides to others for a fee. The Uber model is successful mainly because it benefits all involved – the rider gets to his destination in a way that is less expensive than a taxi, but more private and convenient than public transit. The driver is able to make money by simply driving his vehicle.

Driving for Uber is a burgeoning business that allows people to work on their own schedule, allowing ultimate flexibility. Many are choosing to drive for Uber as a second job to to make extra cash once in awhile. You can drive and earn as much as you want, and the more time you spend driving, the more money you make.

As Uber has grown in popularity, there is more demand for drivers. Driving for Uber may be a fun way to make extra money, but consider several things before jumping in:

Car considerations when driving for Uber

The age and condition of your vehicle are important when becoming a driver for Uber. Uber car requirements can vary by city, but in most cases, cars need to be model year 2001 or newer, with 4 doors and in-state license plates. To drive for Uber’s luxury service UberBLACK, the qualifications are different, but the fares are higher.

Other vehicle considerations:

• What type of gas mileage does your vehicle get? Uber driver fees are based on city, demand, ride distance, and do not take into consideration your fuel costs. If you have a fuel-efficient car, your profit margin will be better.
• Consider maintenance expenses when determining whether you should drive for Uber. Increased wear and tear on your vehicle, more frequent oil changes, and repairs all factor into your costs.
• The costs you incur as an independent business owner may all be tax-deductible as a business expense. Be sure to see a qualified accountant for details.
• Uber requires drivers to have personal auto insurance and also provides liability coverage for incidents. Companies like Progressive offer a personal policy endorsement that fills the coverage gap between your personal auto policy and commercial coverage.

When you decide to drive for a rideshare company, notify your personal auto insurer. Familiarize yourself with the insurance coverage offered by the rideshare company and figure out what gaps there may be. Does this coverage apply when you’re waiting for a fare? Or only when you have a passenger?

Need help? Contact PDCM anytime with questions.

Before you begin your new venture, here are a few other things to consider:

• Rideshare apps rely on a smartphone to work. Make sure your phone is reliable and will not glitch and leave you in a lurch.
• Data plan – consider the amount of data you’ll use to run the Uber app and maps.
• Phone battery – plan ahead and make sure you have a car charger for your phone.
• Your tolerance for people – driving for a rideshare program may be entertaining (ever heard of Taxicab confessions?) but it can also be trying. You need to not only be a comfortable driver, but also a patient person who enjoys meeting new people and making conversation.
• How well do you know your area? Although the Uber app includes a GPS map, anyone who has driven through an underground parking structure can attest that there will be times that it will pay off to know your way around your city

If you’ve decided to try it out, congratulations on your new venture. Make sure to let PDCM know if you have any questions about your current insurance coverage or questions about additional coverage.