For those of you who would like to join the Six Figure Club (SFC), it’s relatively straight forward. Charge $50 an hour for 40 hours a week for 52 weeks in a row and you’ll get the SFC invite in the mail! Of course, you’ve first got to develop some valuable skills, but that’s what college and all those extra hours side hustling were for.
If you make $100 an hour working 40 hours a week, you will make $17,333 a month and $208,000 a year. That’s when you’ll really be able to live comfortably in any expensive city in the world.
With my most recent Uber pay stub, I just might have found a way to get there after only three months of driving. The great thing is that if you have a car, a relatively clean record, a smartphone, and a willingness to hustle, you can probably earn six figures from Uber as well.
MAKING SIX FIGURES A YEAR AS AN UBER DRIVER
I decided to drive for Uber because the company is one of the most popular private companies in the world, valued at $50 billion, and based right here in San Francisco. I wanted to see what it felt like driving a car for a living, and whether it could be a viable income stream to support oneself in an expensive city. If it was, then surely driving could be a great means for many people around the world to help make ends meet as well.
After driving for two months, I knew I could easily make ~$50,000 a year driving 40 hours a week. What I didn’t expect, or believe, was that many drivers were actually making a solid $100,000+ a year. I had to learn more.
Three Examples Of Uber Drivers Making Six Figures
My friend Jabir makes $100,000 a year by not only driving ~50 hours a week, but also by lending out his second car, a paid off 2012 Honda Civic, to his younger brother and friend for 40% of their profits. His goal is to regularly bill an extra 60 hours a week at ~$12/hour after his cut of $30 / hour. That extra 60 hours a week earns him an extra $38,000 a year in passive income.
Then I got to talking to my Uber driver from JFK airport to Manhattan when I went for the US Open. He said he made $115,000 in 2014 driving for Uber. He revealed he was able to earn extra income because he was rated 4.8 out of 5.0. With a high rating, he gained access to the lucrative NYC – Hamptons route, which limits the number of Uber drivers on any given day. Every weekend for six months he was earning 50% more an hour thanks to an artificially low supply of drivers.
Finally, I talked to another Uber driver on the way to Nyonya, my favorite Malaysian restaurant in Manhattan, and he mentioned he also makes over $100,000 a year as a driver. He said he earns roughly $70,000 a year from Uber, and another $40,000 as a private driver for one of Manhattan’s real estate developers. The developer hired him after being his Uber passenger.
With three examples of regular people without a college education making over $100,000 a year driving for Uber, my motivation to drive was rekindled. I read everything I could about maximizing my income, and was able to achieve a $42/hour gross rate (see pic above) from $28/hour when I first started. An annualized income of $82,000 gross a year is pretty damn good, but that’s still short of entering the Six Figure Club.
So, as any lazy person would do, I gave up after a week since $42 / hour is still not the best use of my time as a middle-aged man. Then, I got my latest weekly earnings update. See below.
I made $414.21 NET of Uber fees after only driving for 3.6 hours! That comes out to a whopping $115 / hour, or a samurai slicing $240,000 a year if I am able to drive for 40 hours a week.
Ah-ha! Maybe the three guys making $100,000+ a year driving for Uber were telling the truth. After all, driving was their full-time job, while driving for me is more about investigative journalism and story-telling. With this latest income report, I was reminded about the power of leverage.
HOW I MADE OVER $100 AN HOUR DRIVING FOR UBER
There are two ways any enterprising individual should think about ways to make money.
The first way is to think about the total amount of money you can earn in a year, since the yearly salary is the standard way to calculate income. If you think this way, you’ve got the employee mentality. There’s a natural tendency for the majority to slack off or do the minimum over time since you’re going to get paid a set rate, no matter how little you work. Gotta love it!
The second way to think about earning money is through the hourly rate. If you think this way, you’ve got the independent contractor mentality. I think in this way because I decided to hit the eject button from Corporate America back in 2012 due to boredom, a lack of correlation with compensation and effort, and my intense desire to be free. I only want to actively work about 25 hours a week so I can spend time on my online business and do other fun things. Therefore, my goal is to maximize my income on those 25 units a week.
Take a look at the chart below that breaks down my $414.21 Uber paycheck for the week to understand how $115/hour came about. I only worked for two days out of the seven (Uber pays every Thursday like clockwork) for a total of $105.21. Meanwhile, I made $300 in “Other” and $9 in a toll, which is basically a reimbursement since I have to pay tolls up front.
So what is this mysterious “Other” you’re wondering? Well, after I gave my first 20 rides when I first started out, I earned a $300 bonus under the Other category. Every new driver earns a bonus after giving a certain number of rides. This $300 Other income on this latest income statement is my bonus income for referring a San Francisco driver who successfully completed his 20 rides!
The new driver apparently found me from one of my previous articles on Financial Samurai and decided to sign up and give Uber driving a whirl. Not only did I get the $300 referral income, so did he for a total payout of $600. The bonus amount depends on where you are located, but I think it is an absolute no-brainer to drive for Uber to collect the bonus payout (usually 10 – 50 rides).
After the bonus is collected, I’d just use Uber to pick up passengers along the way to wherever you’re going using their destination feature. It’s not worth driving full-time anymore. The reason is because the hourly gross wage has drastically declined due to a large increase in drivers now in 2017.
The great thing about this $300 income is that I had no idea it was coming. It was completely out of the blue, like seeing an Amazon gift box from a stranger at my front steps during a non-holiday period. Furthermore, it’s not like I’ve written a ton of articles about my Uber experience either. I only have two dedicated articles out of 1,100+ articles on Financial Samurai that revolves around my Uber experience.
Out of the $414.21 income, roughly 25% was active, and 75% was passive. As someone who is trying to maximize his time based on an hourly wage, such a high ratio for passive income is solid!
MONEY LESSONS LEARNED
- People make more money out there than you know. Getting a 9-to-5 job is not the only way to make six figures a year. Plenty of independent contractors also make six figures because they’ve learned how to maximize their time and leverage existing assets (a car, a second car, relationships, etc.). Don’t look down on people who don’t have full-time jobs. Try to figure out their secrets instead.
- Market yourself by registering your domain name online. You must have an online presence if you want to be found. Don’t let Facebook, LinkedIn, or Twitter be the owner of your brand. Own your own brand! By creating a presence online, you can market yourself much more efficiently. You can leverage your platform to make referral income like I do with Uber. You can also use your platform to earn consulting gigs, sell products like my book, and earn advertising revenue. My online income is well north of $200,000 a year, allowing me to no longer have to work a day job. Sign up for Bluehost to register your domain and pay less than $4/month for hosting your website. It’s cheap and easy to get started. Here’s my step-by-step tutorial for how to start your own website.
- Develop your X Factor. Think about your X Factor as your happiness insurance policy. Your X Factor could be methodically developing a network of key individuals over the years who could hook you up with a new job when the time comes. My X Factor happens to be starting Financial Samurai in 2009 as a place to share my thoughts about the financial crisis. I never imagined the site would give me the confidence to engineer my layoff three years later, make more than my day job in banking five years later, or give me opportunities to consult for various fintech startups in Silicon Valley.
- Continuously experiment with new ways to make money. Test, test, test! This is the main lesson I learned while consulting at various marketing departments. Someone out there is doing it better than you. Figure out what they are doing and replicate in your own unique way. Don’t just settle for one source of income.
- Nothing beats hard work. The up to $1,000 sign-up bonus to drive is nice, but one of the main reasons why I decided to drive for Uber is because I wanted to prove to all the incredibly annoying people who complain they aren’t getting ahead and aren’t willing to work more than 40 hours a week, that making a healthy income is possible if you try harder! Yes, you need a car that’s less than 10 years old, and a smartphone, but come on. Some of the poorest people I know whom I play tennis with during the middle of the day have the latest iPhone, 60″ LED TV, and pimp daddy car. Thanks to the sharing economy, there are so many new ways to make money nowadays.
My goal is to consistently make over $100 / hour through Uber by mid-2017, which I have. I’m a big proponent of working smarter, rather than harder. But in order to get smart, you’ve first got to put in your time! The first step everybody needs to do is start their own platform online. Once you’ve got an online platform, your income upside is unlimited!
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Updated for 2017