Pros and Cons of Driving for Uber

Pros and Cons of Driving for Uber

Last Updated: Nov 14, 2017
Thinking about picking up a side job driving for Uber? The promise of a good income and flexible schedule is enticing, but consider these pros and cons first.

Looking to make some money on the side as your business grows? Some entrepreneurs are generating extra income by driving for Uber or Lyft but like any good entrepreneur, you know that any time not spent directly building your business better be time well spent.

What are the pros and cons to working as a for-hire driver for Uber?

Possibly the biggest advantage to a job like this is the flexible schedule. You can work as much or as little as you would like and during any hours. No need to schedule your driving around other activities. You can drive when you have time.

Often, part time jobs with a flexible schedule come with a salary fit for a high school student working their first job. That’s not going to work for a budding entrepreneur.

According to Uber, drivers make around $17 per hour.

But what seems like a pro could actually be a con. Another study found that after expenses, drivers in Houston, Detroit, and Denver were making less than $13.25 per hour and even worse, drivers in Detroit brought in only $8.77 per hour. In contrast, Walmart pledges to pay its employees at least $10 per hour.

Like any job of this type, as drivers learn the platform, they’re able to maximize their efficiency driving up their hourly wage and if Uber were to respond, it would likely say that the flexibility of the work is a better value to its drivers than the fixed schedule of Walmart.

Courts ruled that Uber drivers are independent contractors rather than employees. Because of that, drivers are not eligible for overtime pay or benefits and the driver is responsible for paying their own taxes. Fortunately, as an independent contractor, you can deduct expenses associated with your business income, including taking the standard mileage deduction for the miles you travel for your business. A good rule of thumb is to save 25% of your income for taxes but you’ll likely pay much less after deductions.

As a for-hire driver, your personal auto insurance policy doesn’t cover your vehicle when you’re functioning as a driver. Many have mistakenly said drivers have to provide their own commercial policy but Uber provides commercial insurance that covers the vehicle from the time the trip starts to when it ends. Also included is uninsured motorist coverage along with other coverages including coverage when the driver is between trips. Read more here.

You’ve heard it before. Cars depreciate rapidly and probably the biggest enemy to your car’s value is the number of miles. As you pack on the miles, the value of your car falls and the amount of repairs increases. There’s also the normal wear and tear of having people in and out of the back of your car. There will be stains, spills, accidental damage, and the normal wear and tear that comes with frequent use.

Although Uber will help you with some expenses—cleaning up vomit or other stains, for examplethe wear and tear on your car is an expense that falls on you. Save a portion of your earnings to purchase a new car. You’ll need that money long before the casual driver will.

Most people would think twice about picking up a hitchhiker but as a for-hire driver, you’re letting strangers into your car. Uber does its best to screen riders by having a feedback system where both driver and rider rate each other but there’s no way to completely mitigate the risk to your personal safety. There are also plenty of reports online of passengers making inappropriate advances on drivers and the reverse. But like any service as large as Uber, the reports of negative incidents will always gain more attention than the majority of trips that happen without incident and end up being an enjoyable experience for all involved. All drivers should take appropriate precautions and be safety-minded at all times.

Bottom Line

If you’re looking for a little extra money, driving for Uber might be the perfect choice given the flexible schedule. This allows you to build your business when you need to and extra money when things are slow.

However, don’t expect to make $20 per hour anytime soon. As you learn the ins and outs of how to drive for maximum efficiency, expect your revenue to rise but until then, be patient.

Finally, have realistic expectations. If you’re building a business, you need to concentrate as much as possible on that effort. Uber drivers making a salary high enough to live on are driving full time in most cases.

© 2017 Attard Communications, Inc. All Rights Reserved. May not be reproduced, reprinted or redistributed without written permission from Attard Communications, Inc.


How to Negotiate Contracts with Big Companies

How to Negotiate Contracts with Big Companies

Last Updated: Aug 29, 2017
Learning how to negotiate is important for small businesses. Negotiating a contract with a big company or government agency can be harder than making the sale. Don’t let contract negotiations  (or the other company’s negotiator) intimidate you! Use these 7 negotiation tips to get a fair deal.

Getting a company to agree to use your products or services may be only half of your job. Once you have convinced them you can do the job they want done, you may still have to negotiate the details of the deal. And that chore may be more difficult than convincing the company in the first place that they need what you are selling. Conflicts may arise over price, delivery terms, quantities, or even the length of the contract.

Depending on the company with which you’re negotiating, the size of the contract and the negotiator, tactics that might be used may include anything from low balling you on prices, to insulting you, taking weeks to respond to your inquiries or counter-offers on price, or demanding control or rights you don’t want to give up.

How should your small business handle negotiations? What can you do to avoid being taken advantage of by bigger or more aggressive negotiators?  Over the years, my small business has successfully negotiated contracts with some of the biggest corporations in the US, as well as smaller companies. We’ve also been a government contractor and subcontractor.  Here, based on my own experiences as well as some great advice from attorneys who have helped over the years, are 7 negotiation tips to help you get a fair deal when you negotiate a contract.

RELATED: How to Make Your Small Business

RELATED: Will You Profit by Selling to Big Companies?

© 2017 Attard Communications, Inc.  May not be reproduced or redistributed without written permission from Business Know-How

About the author:
Janet Attard is the founder of the award-winning  Business Know-How small business web site and information resource. Janet is also the author of The Home Office And Small Business Answer Book and of Business Know-How: An Operational Guide For Home-Based and Micro-Sized Businesses with Limited Budgets.  Follow Janet on Twitter and on LinkedIn