A Little Context Helps to Explain..
Much of the work I do is front-loaded. This means I work hard for weeks or months, hoping it will pay off later. Sometimes, besides my time, I invest money into my projects. I put in the time and money now, hoping to earn money later. I also hope to earn that money for a long time after the hard work ends.
That’s all well and good, and it’s the way I prefer to work. It’s great, actually. But, sometimes it drives me to do something different. Sometimes, I want to add an income stream without making any investment. Sometimes, I want some quick, easy cash. Enter the gig economy, specifically rideshare driving. Although not a great career, rideshare driving works insanely well for earning fast money. Additionally, it brings many personal benefits I didn’t expect.
When Active Income Beats Passive Income
I began driving for Uber and over a year ago, when I realized the value of adding on-demand income to my earnings. At the time, I was already self-employed. I worked as a consultant to business owners and entrepreneurs, and I earned a steady income from it. I had slowed down my business for work-life balance. Sacrificing some income had been worth the reduction in stress.
But then, my significant other and I learned that a surprise baby was on the way, and he would be here before we knew it. New expenses would come, and I wanted to pad our accounts without making any big commitments. Growing business with new clients is a big commitment, so I needed something different.
Another businessman, my CPA, had told me about his experience driving for Uber. He drove during his commute and when he had a few hours to kill, and he recommended that I try it. I downloaded the app and I went through the application process. I submitted pictures of my car, insurance, and Driver’s license. I authorized a background check, and a week later I was on the road, making extra money with Uber.
I began driving during my commute, thinking it would be easier than starting on a crazy Friday night. It was so easy! I was driving around town accepting payments, compliments, and making new friends. Driving with Uber and Lyft, I changed a boring commute into an exciting hobby. A costly time-suck turned into something that paid me money. Earning extra income while driving gave me the best of both worlds.
Life is a Little More Interesting
The extra experience that this work has added to my life is also a nice side effect. I meet more locals, travelers, and road warriors than ever before. Everyone has a story to tell, and now I get to hear them all. Driving for Uber has opened up a whole new side of my city that I never knew. People are doing interesting things in business, life, non-profit work, travel, and more. There’s something new every day. You might also be surprised by the way people open up to me.
With some of the rate changes, some drivers have complained that they aren’t making as much money. I’m not sure whether I would ever do this as a full-time job, but even with the rate changes it still works for me. Uber and Lyft have left my city temporarily, but new companies have filled the void. I drive with those, picking up rides during rush hour and weekend nights. I can work a few hours or just 30 minutes, and usually earn $25-35/hr. Yes, that’s the gross rate and yes that’s before my gas cost, but I’ll get to that.
What is it Like?
I often compare rideshare driving to a restaurant job. Waiting tables is probably the only other “quick cash” job out there. It is also easy to start and stop, move towns and find work, and choose shifts. I think rideshare driving is better in every way.
For example, what restaurant can I work for which allows me to decide at 4pm that I want to work at 5pm and stop at 8pm? None. What restaurant lets me come in last minute on a Saturday night and guarantees me $35 an hour for four hours? None. I could keep going, but you get the point. This is the most flexible and easy “job” available today.
Now, back to the costs of driving for Uber, Lyft, and the like. I drive an SUV. I get about 21 mpg, which isn’t fantastic. I put extra miles on my SUV, which has other long-term costs associated with it. But, I also deduct these costs for every mile I drive while I’m logged into the app, whether I have riders or not. So, when tax time comes around, I pay a lot less in taxes. Also, my actual costs are lower than what the IRS provides as a deduction. This raises my net income.
In 2016 that mileage deduction is 54 cents per mile. This means that for every one hundred miles I drive for business, I get to keep $54.00 of my income without taxes. So, if I earn $100 without this deduction, I may pay $20 in taxes at a 20% rate. With this deduction, that same tax rate has me paying only $8.50 in taxes. When I maintain my vehicle, this is more than enough to offset my costs. Sometimes it’s enough to even improve my situation a little. Many of these are miles I would be driving anyway, but now I get income and deductions from them. Note: This is not tax advice, for tax advice please consult your CPA or Accountant.
To Drive or Not to Drive
This isn’t a recommendation to drive for Uber, nor is it a guarantee you’ll have the same experience. This is my experience and I thought it might be helpful. My goal is to help you make a choice of whether to try it out for yourself. The great thing is, you can easily try it for a month and decide whether or not it’s for you. I’m having fun with it and will continue to do it until I see a reason to stop, which I haven’t yet. If you want to give it a shot, signing up using one of the links here will earn you a bonus. Full disclosure: It gives me a bonus too, so we both win. Sign up, complete a certain number of trips, and they’ll give you extra cash. Amounts vary by city, as do bonus ride requirements, but some of the bonuses go as high as $1,000. Not bad. I’m all about earning a little extra cash, so I took full advantage of the referral bonus when I signed up. Sign up here with Uber, and here with Lyft
If you give it a try, let me know how your experience goes, and feel free to share your story!