Should You Drive for a Rideshare as Your Side Hustle?

Ridesharing can be a source of regular side income, with the added benefit of a flexible schedule, but that road is not without its bumps.

If you’re reading this, then congratulations, you’re living in the future. Why? Because we’re all living in the future.

“Doesn’t that make it the present?” you ask. No. Just look around. The Internet exists. Smartphones exist. There are self-driving cars. Clearly, this is the future.

But while some parts of the future are nice, some parts can be tougher to manage. One example is the “gig economy,” which is truly an economy of contrasts. In some ways, it offers more flexibility by allowing you to work when you want to work. In other ways, it provides more instability because it tends to come without benefits or a regular paycheck. Are “gigs” worth the trouble—even as a side hustle?

It depends on the gig. Today, we’ll look at the ins and outs of driving for a rideshare.


How driving for a rideshare works.

There are many rideshare services these days. It’s easy to make one, after all. Just take a word related to driving, like “engine” or “manual transmission” and then remove some vowels, so it becomes something like “eng” or “mnulmiss.”

Once that’s out of the way, you just hire a bunch of programmers, make some deals with local governments, and bada bing bada boom, you’re in business! (Okay, we know, it’s slightly more complicated than that.)

Because different rideshares have different rules and because those rules could change from the time we’re writing this until its published, we’ll just speak in broad terms.

To qualify for most rideshare services, you’ll need to have certain qualifications. There tend to be age requirements, as well as a lack of a negative driving record. You’ll probably need your own car, though some services have partnerships that may give you a discount on acquiring one.

Once you actually start driving, the rideshare company will take a percentage of your fares. The percentage varies and may not be as advertised. Uber, for example, claims to take 25 percent, but some experts believe their cut is actually larger than that.

To drive …

We’ve alluded to most of the reasons that you might consider driving for a rideshare, but we’ll reiterate them.

The flexibility is a big one, as you’re pretty much free to set your own schedule and work as much or as little as you want. If you don’t have a regular day job, you can also have another or multiple other side gigs and weave them all together.

And if you do have a full-time job, you can drive for a rideshare in your off time. But please take care of yourself and get some rest if you’re able to. Working all the time is not good for your health.

If you do decide to drive for a rideshare, however, it’s extra important to make sure you aren’t too exhausted so as not to accidentally cause harm to yourself or others.

… or not to drive.

For folks without a steady day job, an uncertain or sporadic income makes budgeting very difficult. And driving for a rideshare means having a pretty irregular income. The amount you make will depend on where you’re driving when you’re driving—not to mention lots of luck.

Everything from surge pricing to tips to whether the rideshare app decides to start taking a higher percent of your fares is out of your hands. It’s these sorts of issues that have led some rideshare drivers to go on strike.

Additionally, if you had to purchase or lease a car to start driving for a rideshare, you may find yourself having trouble making payments if the fares start getting skimpier.

“Driving for companies like Uber and Lyft does not seem as profitable as even when I first started,” warned counselor and rideshare driver Willard Vaughn. “I think this is due to oversaturation, at least in my area. The companies also took away surge pricing for drivers, which was one of the ways we maximized our profits.

“With surge, the cost of the ride is multiplied by the amount shown. So an average ride that would be $3.75, with a good surge, could be three to four times that or more. Now we’re just given a set dollar amount, even though the customer is still paying the surge amount. So to answer if it is worth it: not really unless you’re just doing it extremely part-time and you have a fuel efficient vehicle.”

So should you?

It depends. Really, it does. But if you’re looking for a side hustle on nights and weekends, you can certainly give ridesharing a shot—especially if you enjoy driving!

If you want to make rideshare driving a principal source of income, on the other hand, you should probably, be a little more cautious. Take all of this into account, do more research that relates to your specific situation, and then see what makes sense.

Use that extra money wisely.

Once you’ve earned all that extra cash from your side gig, what are you going to do with it? While the urge to splurge is very real, you should resist! Using that money to build your savings, pay down debt, and improve your credit score is the wiser financial decision by far.

After all, folks with bad credit and no savings are the ones who end up relying on predatory no credit check loans and short-term bad credit loans like payday loans, title loans, and cash advances to make ends meet when an unexpected financial shortfall rears its ugly head.

And sure, choosing an affordable installment loan to cover that surprise bill is a pretty good solution, but having a well-stocked emergency fund (or even the ability to borrow a low-interest personal loan) is much, much better.

We can’t tell you what do you with your money, but we can sure tell you what we recommend: Use that extra cash to build your savings and pay down debt. Trust us, you won’t regret it. For more tips on how you can increase your income, check out these other posts and articles from OppLoans:

Do you have a  personal finance question you’d like us to answer? Let us know! You can find us on Facebook and Twitter.

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Contributors

Willard Vaughn is a Licensed Counselor in Virginia and Indiana, and currently operates his own private practice specializing in delivering quality, compassionate care online. He has been driving part-time for Uber and Lyft for about two years and has somewhere around 2400 trips between them, with an average rating of 4.8.  He has a Bachelors Degree in Psychology from Longwood University in Virginia, and a Master of Arts degree in Counseling from Argosy University in Atlanta, GA. A native of Indiana, he now lives in the Hampton Roads area of Virginia with his fiancée, soon to be stepson, and Golden Lab named Elvis.

The information contained herein is provided for free and is to be used for educational and informational purposes only. We are not a credit repair organization as defined under federal or state law and we do not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit. Articles provided in connection with this blog are general in nature, provided for informational purposes only and are not a substitute for individualized professional advice. We make no representation that we will improve or attempt to improve your credit record, history, or rating through the use of the resources provided through the OppLoans blog.