Content of the material
- How Much Does Uber Pay vs. Lyft?
- Computing Uber’s full commission rate
- Estimating Uber fees and commission rate per hour
- The Facts
- Start Earning With Uber
- How to become an Uber driver in NYC
- Step 1: Apply for a driver’s license
- Step 2: Obtain a TLC For-Hire Vehicle (FHV) license
- Step 3: Book an appointment with the TLC
- Uber Driver Percentile Pay by Location
- What are Some Common Expenses for Uber Drivers?
- Vehicle Maintenance
- Car Payment
- Car Insurance
- In-Car Amenities
- Instant Pay Fee
- Health Insurance
- Other Benefits
- A Shortage of Uber Drivers
- Good To Know
- The impact of changing customer patterns
- Air travel
- Higher rideshare prices
- Gridwise tips
- So How Much Do Uber Drivers Actually Make?
If you’re wondering why Uber and Lyft have sometimes been accused of misrepresenting the average income of their drivers, a big piece of that equation is location. While it’s true that many factors contribute to your income levels as a driver, the place you drive will have a pretty significant impact on that.
As you can see from the above map, a driver in New York is making, on average, more than twice that of a driver in Nashville. That doesn’t necessarily mean it would be impossible to make a lot in the lower paying cities, it would just take some strategy.
If you’re wondering what you’d have the potential to make annually in your city, you can see a full list here. Here is a small sample of some popular cities, with annual pay estimates:
- Boston, MA: $40,480
- Chicago, IL: $44,990
- Durham, NC: $40,934
- Grand Rapids, MI: $35,474
- Houston, TX: $39,780
- Louisville, KY: $36,004
- Minneapolis, MN: $40,279
- Orlando, FL: $40,248
- Pittsburgh, PA: $46,831
- Syracuse, NY: $32,605
- Virginia Beach, VA: $36,691
How Much Does Uber Pay vs. Lyft?
In comparison to the average Uber driver, Lyft drivers do earn significantly higher wages.
This is a HUGE factor that impacts both drivers, and riders, when evaluating the differences between Uber and Lyft.
Whereas an Uber driver makes an average of $14.73 per hour when tips are factored in, a Lyft driver makes an average of $17.50 per hour.
A significant factor in this: Lyft takes 20% of fares from drivers, plus booking fees, while Uber takes 25% of fares.
The cause behind the remaining disparity is up for speculation.
Earnings from each company fluctuate by location.
Riders give better tips on Lyft according to some accounts, while Uber riders are the generous ones according to others.
Uber surge tends to give your earnings a higher multiplier, while Lyft’s equivalent and lower-cost Prime Time may encourage riders to make more requests.
Essentially, the rideshare driver experience is about the same, and your location and availability will impact your earnings more than anything else.
Regardless of the service you’re driving for, car maintenance costs and self-employment taxes will always be part of the job.
As an independent contractor, keep in mind that these expenses aren’t typically covered by your company.
The only exception is that Uber provides free vehicle inspections at many of their driver support centers and partner inspection centers.
You can figure out where you can get your annual inspection covered on your city’s vehicle inspection page on Uber.com.
Computing Uber’s full commission rate
Uber administrative data on the fares generated per hour worked (from Cook at al. 2018) can also be used to compute Uber’s full commission rate, the share of passengers’ fares that Uber claims in fees and commissions and that do not go to drivers. Uber’s commission rate is frequently discussed as if it were 25 percent but it is actually 33.2 percent, meaning Uber retains a third of Uber passenger fares.
The relevant data are presented in Table 3. While the table first presents the Cook at al. 2018 data on numbers of drivers and weekly fares, our analysis essentially starts with what passengers are paying the drivers. Note that the hours-weighted gross fare per hour (Row 6 in Table 2 and Row 11 in Table 3) does not reflect what riders provide in fares because it excludes the booking fee they pay for each trip. So we need to add the booking fees charged per hour to the fares generated per hour from Table 2 to obtain the total amount riders pay Uber per hour; the booking fees per hour are derived in Rows 7 through 10.
Table 3Estimating Uber fees and commission rate per hour Row Item Source Data 1 Number of driver participants Cook et al. 2018, Table 1 1,873,474 2 Number of driver-weeks Cook et al. 2018, Table 1 24,832,168 3 Weekly fares Cook et al. 2018, Table 1 $376.38 4 Gross fares/hour, person-weighted Cook et al. 2018, Table 1 $21.07 5 Trips per week Cook et al. 2018, Table 1 29.83 6 Hours per week Cook et al. 2018, Table 1 17.06 7 Booking fee per trip $1.55 8 Trips Row 5 × Row 2 740,743,571 9 Trips per hour Row 5/Row 6 1.75 10 Booking fees per hour Row 9 × Row 7 $2.71 11 Gross fare/hour, hour-weighted Row 3/Row 6 $22.06 12 Total passenger fare/hour Row 10 + Row 11 $24.77 13 Commission/fees on total fare Row 10 + (Row 12 – Row 10) × 0.25 $8.23 14 Commission/fee rate Row 13/Row 12 33.2% Source: Analysis of Cook et al. 2018, Table 1 Share on Facebook Tweet this chart Embed Copy the code below to embed this chart on your website. Download image
To derive booking fees per hour, we pull data from Cook et al. 2018 (Table 1) on the number of trips each week (29.83) and the hours worked each week (17.06), and we enter these figures in Rows 5 and 6 in Table 3. Given this, we know that drivers average 1.75 trips per hour (Row 9 in our Table 3). To compute booking fees per hour, we multiply the 1.75 trips per hour by an Uber booking fee of $1.55 per trip,14 which means that Uber earns $2.71 in booking fees for every hour worked by a driver.
Adding the $2.71 in booking fees per hour (Row 10 in our Table 3) to the hours-weighted gross fare per hour of $22.06 (Row 11 in our Table 3) tells us that total passengers’ fares paid to Uber each hour average $24.77 (Row 12).
So how much of the $24.77 collected by Uber each hour is taken as commissions and fees? As we have established, Uber collects $2.71 in booking fees per hour plus 25 percent of the hours-weighted gross fare per hour of $22.06 in commissions. So we multiply 0.25 by $22.06 and add the resulting $5.52 to the $2.71 in booking fees and find that Uber’s commission and fees total $8.23 per hour, which represents 33.2 percent of the $24.77 in total passenger fares per hour, not the 25 percent frequently discussed.
Uber driver hourly compensation is $11.77 an hour. An Uber driver’s yield from $24.77 in total passenger fares, after taking into account all Uber fees/commissions ($8.23) and driver expenses ($4.78), is just 47.5 percent of what passengers pay ($11.77/$24.77).
So now that we’ve talked about everything that contributes to the actual take-home earnings of an Uber or Lyft driver what do the numbers say?
Harry Campbell, a popular ridesharing blogger, conducted a study, and using data, gives some real numbers to the question of how much drivers are really making.
Campbell found that drivers “reported earning $15.28 per hour,” but assumes that number is really a bit lower based on all of the incidental expenses we’ve already mentioned. As you can see from this pie chart, the largest number of drivers earn between $10-15 per hour.
If you were hoping to make more than that driving for Uber or Lyft, there are a few ways you can try to up your earnings.
Start Earning With Uber
Earning enough to make ends meet is easy with Uber, but with our tips, you can strategize your way toward some quick cash in no time.
Inspired to take on a new gig?
How to become an Uber driver in NYC
Unlike in other U.S. cities, you need a Taxi and Limousine Commission (TLC) license to drive an Uber in New York City. That’s the biggest difference between driving with Uber in NYC and doing the same in any other city. Below is a step-by-step guide on how to become an Uber driver in NYC:
Step 1: Apply for a driver’s license
You need a valid driver’s license before driving with Uber in NYC. The license can either be a Commercial Driver’s License (CDL) or a Class E Department of Motor Vehicles (DMV) license. Additionally, Uber requires that drivers be at least 21 years of age. You must also have at least one year of driving experience with a license under your belt. Uber will run a background screening when deciding whether or not to approve your application.
Step 2: Obtain a TLC For-Hire Vehicle (FHV) license
A Taxi and Limousine Commission license is a New York State license that allows you to drive taxis. In addition to rideshare cars like Uber and Lyft, you can use this license to drive other types of taxis. These include yellow and green taxis, black cars, liveries and limousines.
Obtaining a TLC license requires that you take a 24-hour TLC education course. You can also enroll for an online course to give yourself an edge before taking the actual course. You’ll ultimately be tested on your defensive driving skills. You will only be eligible for the license if you pass the course.
Step 3: Book an appointment with the TLC
This is essentially an application to get your TLC license approved. Submit a formal request to the TLC, after which they will send you an email to make an appointment. That appointment is where the TLC will determine if you’re eligible to hold the license. Make sure to gather all the relevant documentation as you prepare for the appointment with the TLC. These include your Social Security Number (and a copy), CDL or DMV license, your online TLC application, certificate showing that you passed your defensive driving course, and $100 application fee.
If the TLC approves your license application, you can start driving with Uber immediately, assuming your car meets Uber’s vehicle requirements for NYC. The main requirements to keep in mind are:
- The vehicle must be registered with the TLC and have a TLC license plate
- It must either be a minivan or a 4-door car
- For regular Uber, the vehicle should be a 2006 model or newer. For UberBlack and UberBlack SUV, your car must be 6 years old or newer.
- Your car must not have any commercial branding on it.
- It must be in good condition and have no cosmetic damage.
- The vehicle should have an emissions inspection done by a NYS DMV facility
In case your vehicle is not eligible, or if you don’t have a vehicle at all, Uber can help you get one. They will charge you a weekly payment in exchange for using the vehicle to earn.
Uber Driver Percentile Pay by Location
The following data shows the percentile distributions of Uber driver earnings in several different locations. Note that median earnings appear in the 50% column.
|New York City||$30,183||$37,102||$44,702||$54,602||$63,615|
What are Some Common Expenses for Uber Drivers?
When you drive for your job, you drive more miles than you otherwise would. You’ll need to change the oil, other fluids, and tires more frequently.
If you don’t already own your car outright, you will need to continue making lease or car loan payments. According to Experian, the average monthly payment for a new car loan is $568. The average monthly payment for a used car loan is $397.
Uber drivers need to maintain comprehensive and collision coverage on their personal auto insurance. According to data from the National Association of Insurance Commissioners, collision coverage costs $363 per year on average, and comprehensive insurance costs $160 per year on average.
Uber has additional insurance coverage that protects your car should you get into an accident while on the clock. However, drivers must pay a $1,000 deductible before the coverage kicks in. Uber also has third-party liability insurance and uninsured/underinsured motorist bodily injury insurance for drivers. Learn more about Uber and insurance here.
Gas prices vary significantly, depending on where you live. Uber drivers must pay for the gas used to operate their Uber business. You can claim gas using the standard mileage deduction or by tracking actual gas expenses and deducting an exact figure for gas.
Some Uber drivers choose to offer riders in-car amenities like mints, phone chargers to use, water bottles, tissues, hand sanitizer, etc. Amenities aren’t required, but some drivers claim amenities help boost their ratings.
You can claim in-car amenities as a business expense outside of the standard mileage deduction.
Instant Pay Fee
Uber pays drivers weekly, but if you want your earnings faster than that, you will need to sign up for Uber Instant Pay. With Instant Pay, drivers can withdraw their earnings using a debit card for $0.50 per transaction. To avoid the fee, drivers can open an Uber debit account through GoBank.
Not every bank processes withdrawals immediately, so although it’s called Instant Pay, it could still take a day or two until the money appears in your account.
Currently, driving full-time for Uber doesn’t mean you get benefits like health insurance. Uber drivers need to secure their own health insurance if they don’t already have health insurance through a family member, partner, or employer.
This might change in the future. In the Spring of 2020, Uber announced plans to establish a health insurance policy for drivers. Uber would reportedly pay for health benefits on a sliding scale based on hours worked.
Uber doesn’t give drivers matching contributions to a retirement plan, life insurance, dental insurance, vision insurance, or other benefits. If you want these benefits, you will need to purchase them for yourself as an independent contractor.
A Shortage of Uber Drivers
Recent increases in gas prices have led to a shortage of Uber drivers, which may bode well for those looking to pick up some rideshare gig work. Here, again, understanding the fine print and variables is important.
Fewer drivers result in increased costs for riders. As more people are looking to get back on the road as COVID-19 restrictions ease, they’re finding wait times and prices that reflect the shortage of drivers.
In April of 2021, Uber developed an incentive program number of $250 million to get drivers back on the app. It also started charging riders fuel surcharges to help drivers cope with the increasing gas prices of 2022. This, combined with increased fares due to scarcity, means drivers are seeing better financial opportunities than before. In large cities like New York, Philadelphia and Chicago, drivers are making over $30 per hour.
However, this temporary demand imbalance combined with Uber’s dynamic pricing structure suggests this pay increase is likely an unusual exception, not the rule. Those signing up as drivers now can make good money, but they should do so with an end date in mind.
Good To Know
The average car insurance will not cover a vehicle used for rideshare work. Uber provides insurance that covers drivers while they are waiting for a request, en route to pick-up or during a ride. To protect yourself when you use your vehicle for Uber, be sure to sign up for a rideshare auto insurance policy.
The impact of changing customer patterns
The recent resurgence of business and social activity has brought rideshare back to life, but the playing field is different than it was back in 2019. Drivers need to study the market for rideshare and use smart strategies to make as much money as possible—and hold on to it.
Being aware of passenger patterns is a must in this environment. Let’s look at some of the activities passengers partake in, how well they’re recovering as the world regroups after the pandemic shutdowns, and the ways it affects Uber drivers.
Airport passengers are coming back! By early April 8, the TSA reported 2,318,977 people passed through checkpoints. On that same date in 2021, only 1,549,181 went through the gates. While that’s not quite up to 2019’s number of 2,590,499, airport traffic is definitely showing promising signs of recovery. There is a change, though: in 2022, more travel is oriented toward pleasure than business.
Companies have learned that online meetings can be highly effective and far less expensive than those cushy business trips. In fact, many believe business travel may never return to pre-pandemic levels. This means you have to adjust your mindset about airport driving and cater to the pleasure crowd rather than banking on the business traveler.
Business events are coming back, but not as strongly as rideshare drivers might like. There are conferences and conventions, but many of them are either retaining an online presentation format, or creating a hybrid option, which combines live gatherings and virtual experiences. Much like business travel, corporate events may be taking on new forms that were inconceivable before the events of 2020 changed the ways people gather.
Fortunately, the picture is brighter for entertainment. According to morningconsult.com, crowds are coming back to public events, from the movies to consumer showcases and hockey games. Concerts are back in business in a big way. Live Nation stated that 2022 is on track to be a record year. This is great news for rideshare drivers. While there will still be many virtual entertainment events, trends show that there will be crowds again—and that they will be in need of rideshare services.
Higher rideshare prices
While it’s clear that passengers are coming back, they may not be as easy to find as they have been in times past. Higher prices for rideshare will keep some of them away. If you live in a bigger city, this creates more competition among a large population of drivers for what’s bound to become fewer rides. You’ll need to be more aware than ever about where passengers might be and at what times.
With Gridwise, you’ll be able to track airport traffic volume and get up to the minute information about all the events in your town. What’s more, Where to Drivegives you data from real drivers, showing you the locations where more money can be made. Gridwise gives you all the insight you need to keep your earnings up where you need them to be. Download Gridwise to get all these features and more.
So How Much Do Uber Drivers Actually Make?
Many Uber drivers are students who want to pay their way through college. How much Uber drivers earn varies from one driver to another, and it all depends on how much they drive, and many other aspects, such as car maintenance, gas expenses, tolls, insurance, and so on. The time of the drive is also relevant to the amount a driver is going to earn at the end of a ride. It is hard to calculate an average number.
Overall, a driver is said to get an average weighted driver wage of $21.90 per hour. If a driver works 30 hours a week, the rough projected annual driver salary would be around $34,164.
However, it is important to consider that drivers do receive bonuses sometimes. It can be a little rare, but they still get some advantages. Some of the bonuses include sign-on bonuses and referral fees.
If you are still curious about numbers in different major cities across the United States, then check out this 2019 chart that says how much drivers made per hour before expenses and after TNC commission.
|Market||Earnings Per Hour Median||Earnings Per Mile Median||Earnings Per Trip Median|
|Los Angeles, CA||$17.07||$0.87||$9.84|
|New York, NY||$20.96||$1.10||$13.33|
|Bay Area, CA||$21.21||$1.06||$11.67|
|San Jose, CA||$21.80||$1.00||$11.51|
|San Diego, CA||$17.15||$0.79||$9.39|
|San Antonio, TX||$12.44||$0.64||$9.29|
|Las Vegas, NV||$15.37||$0.89||$8.61|
|Oklahoma City, OK||$14.05||$0.62||$8.29|
|Kansas City, MO||$16.85||$0.69||$11.23|
|New Orleans, LA||$14.33||$0.90||$10.31|