Previously, I had written about my struggling friend Jabir who was unemployed for a couple years before he discovered Uber. He drove for Uber for a year before switching over to be a dedicated hotel driver. In this post, my other friend Harry shares why he drives for Uber even though he's financially thriving. Enjoy!
Normally when I'm out putting around in my SUV driving people around for Uber (or Lyft – I do both), the first question they ask is: “So do you do this full time?” Reluctantly, I usually tell them, “No, I also work for an engineering company as an aerospace engineer.” (odds are, if you've ever flown, you've been on one of our planes). It's not that I'm embarrassed to be a full time engineer/part time Uber driver, but it always elicits a very strange reaction from my passengers.
Why would anyone who has a perfectly good job want to drive around a bunch of jokers during his free time? They don't outright say it, but I'm sure that's what they're thinking. But there are actually a lot of reasons why I enjoy it and as you may have guessed, it's not just about the money. Well a big part of it is about the money, so let's explore that a little more first:
I Like To Make Easy Money As An Uber Driver
Sometimes I feel like I was born to make money. You know how you have those friends who are nice, kind, smart people but they just never seem to be making much money. Well I'm pretty much the opposite of that: I always seem to find jobs that pay well and require very little work. Anyone need a private volleyball lesson for $85/hr? I'm available (that's what I used to charge before I retired from coaching :)
I wasn't sure if being a rideshare driver would fall into this category but after all the stories I heard, I figured it was at least worth a shot. On my best weekend (July 4th), I averaged almost $50/hr working just 10 hours over 3 days. So yeah, I'd say it can be pretty easy money. And since I actually started out with Lyft first, at one point Uber paid me $500 just to do a single ride with them. Doesn't get much easier than that (especially since the ride I did was around the block with me and my wife's phone).
I Like To Diversify My Income As An Uber Driver
You're not gonna get rich being a rideshare driver, especially with the latest fare cuts but there's no doubt in my mind that it is a great way to diversify your income. The start-up costs are pretty minimal since anyone with a smart phone and a newish car can join (2006 for Uber, 2000 for Lyft) and after that it's almost pure profit. How many businesses can you make a profit with starting on day one?
And yes, believe it or not, as a rideshare driver you're now a micro-entrepreneur or a business owner. You're not an employee of Lyft or Uber (that's why you're allowed to drive for both – and at the same time if you're smart) and you're paid 1099 as an independent contractor. So not only does it help you diversify your income but it also opens up a ton of tax deductions as we'll see below.
I Can Make More Driving As An Uber Driver Than I Can At My Day Job
The average starting salary for an aerospace engineer is $64,000. Add 5 years experience to that (I'm 27) and you have a pretty respectable figure. Now if I were driving 40 hours a week, I wouldn't be anywhere close to my engineering salary but since I drive part-time, I'm able to cherry pick the best hours and use a slew of tax deductions to make more on a per hour basis than I would as an engineer.
It's also a LOT more fun to be an Uber driver than it is to sit in front of an Excel spreadsheet as the sun goes down but we'll get into that a little bit more later on.
I don't make much more as an Uber driver than as an aerospace engineer but since I'm taxed at my marginal rate on overtime hours at my day job it's almost a disincentive to work (I also have to do a minimum of 10 hours every two weeks to get paid out OT).
On a busy Saturday night with Uber though, I can make up to $30-$40/hr, deduct nearly half that income and end up with $15-$20 tax free and pay taxes at my marginal rate on the rest. That also doesn't count the cash tips that I often get on Uber either which of course I report ;)
Deduct Half Your Income?
One of the things that I realized early on in life is that I abhor paying taxes. I don't like contributing to the government's spending problem and if I could get away with it, I would not pay them one dime. So I've kind of made it my mission in life to find legal ways around paying taxes and 1099 employment has been a big help in that quest. Unlike W2 income, there are a ton of deductions that open up to an Independent Contractor depending on how aggressive you want to be.
I do my taxes myself every year and I'm pretty aggressive. As a driver, I obviously get to deduct the miles while I have a passenger in the car, but what about when I'm driving around without a passenger? Would it be ok to stop at the grocery store, run some errands all while I have the app on and deduct those miles? I say yes. In fact, I take it one step further.
Mixing Business With Pleasure
I currently live in Orange County, but since I grew up in LA, I'm constantly heading home to see family or friends. As a rideshare driver though, I like driving in LA much better than Orange County because it's way busier and I make way more money (so far this is all true). So whenever I go to LA, I make sure to drive a few passengers around for an hour or two and if I happen to see some family along the way I'm still going to deduct all those miles to/from LA since that seems like a pretty legitimate business trip to me. Maybe the IRS will disagree but there's only one way to find out.
(This is actually a trick that a lot of landlords/business owners use. Even yours truly, Sam himself has done it once or twice.)
There are a few other deductions that open up but mileage is obviously the biggest one as a rideshare driver. The IRS gives you 56.5 cents/mile but we all know that the more economical your car is, the less the actual cost will be.
Ok you guys probably get it by now, you can make money with rideshare if you don't mind driving a bunch of drunks around on Friday and Saturday nights. Let's move on to some non-monetary reasons why I drive though.
I Like Talking To People
I've always had a weird fascination with talking to people. Trust me, there are a lot of people I don't like talking to but I will always give someone a chance. It might sound a little cheesy but I look at every conversation that I have with someone as an opportunity to learn something or make a discovery about them or myself. This philosophy has suited me very well so far in life so I figured if I could get paid to talk to people, why not do it?
Some passengers will keep quiet but I've found that a majority of them are interested in learning about me and I'm always fascinated with learning about them. You'll get the occasional weirdo and drunk bastard but I've met a ton of interesting people during my travels.
My Craziest Uber Story
The craziest passenger story I have though is about a girl who got into my car clearly on some type of fun drugs and wanted a ride all the way from LA to Orange County. This actually worked out perfectly for me since I was planning on heading that way once I was done driving anyways, now I would get paid for basically driving back home to Newport Beach (sometimes the rideshare Gods will align!). She was cute and very sweet, and about 10 minutes into the ride she asked if she could come sit up in the front. I obliged and for the rest of the ride, she sang, danced and played music at max volume while trying to get me to dance with her the whole time haha!
She was relentless: at one point, she asked for my phone number and then told me that I had to come upstairs when I dropped her off. That's when I told her I was married though and things got a little awkward after that. But overall it was still one of the weirdest/funnest experiences I've ever had as a driver. And I made $70!
I'm still trying to convince all my single friends that being a single rideshare driver has some great perks!
I Get Lonely
As a normal person living inside an aerospace engineer's body I find that I don't have a lot in common with 90+% of the people that I work with. Anyone that talks to me about work outside of work is out, anyone that complains about how much they hate their job is out and anyone that would come in on a Saturday is out. That doesn't leave a whole lot of people left to hang out with. At my last job, I averaged around 1 new friend per year and I'm on a similar pace right now with my new job.
My wife and I also just moved to Orange County last year so we don't have nearly as many friends as we once did in San Diego. Plus, during the past year, I have spent A LOT of my time working online. I run a personal finance blog for fun and my latest project is the Ride Share Guy, a blog for rideshare drivers and riders. I love working online for sure, but you can only have so many e-friends before you need to get out there and talk to some real people face to face.
That's where rideshare comes in handy. You can literally turn the app on whenever you want and flip into driver mode. There are no minimums and almost no maximums (I think it's something like 8 hours with Lyft but at that point you can just switch to Uber) and the harder you work, the more money you'll make. Can you say that about your job?
But a lot of times, when I need some human interaction, I don't really care about the money I make. Did I mention my wife is in med school? Long story short, I have a lot of me-time and driving is a great way to fill some of that space.
Does This Sound Like Something You'd Want To Do?
Everyone that I know who's a driver loves it. Not everyone is happy with the pay since the more hours you drive, the lower your income will go but for someone like me it's a perfect fit. I actually liked it so much I started one of the very first rideshare blog and podcasts over at The Rideshare Guy. Apparently, it's pretty popular too because in just 5 months I've built a very dedicated and loyal audience that is growing each and every day. Maybe one day it will be the Financial Samurai of rideshare blogs :)
Like with most good things though, there's definitely a honeymoon phase with rideshare driving. I still enjoy it for sure but I don't do it as much as I used to since I'm working so hard on the site. One day soon though I'm hoping to hire a couple people if/when we start making some money and then I can go back to being a driver and making more money than my day job.
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39 thoughts on “Why Would An Aerospace Engineer Want To Be An Uber Driver?”
Tax question: I’m also an engineer and am considering doing just what you do. My question is about withholding taxes that no-one seems to answer. Most places say I have to pay these taxes as an employee and as an employer (2* 7.5%), however what about the fact the my full time job pays witholding taxes. Does that mean I don’t have to pay the extra taxes and i just need to pay my taxes as regular income after all deductions? So if I made say 50K taxable income (after all my deductions) and I made $4,000 in taxable income after deductions, then would my taxable income be 54K or do I pay to pay additional payroll taxes as an independent contractor?
As a driver, you’re paid 1099 so it’s really like having your own small business. On your taxes, you’ll have to file a schedule C and report income there and pay self employment tax on that amount (minus deductions like mileage of course).
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Props to you for working multiple jobs and maxing out your time. I love that you got the $500 incentive bonus for driving your wife around the block. That is hilarious!
I really identify with what you say about talking to people and having some adventures. I think many times when we only do one thing (our job) we forget the fun things about it and focus only on the “job” part. On the other hand, when you mix work and pleasure together, you can find the advantages on almost any type of job and take the fun parts out of it.
Also – your diversification strategy is very smart. Nicolas Taleb also writes about those kind of “weights” strategies in which you do some more “risky” or adventures things while keeping your regular job – thus making the overall maximum.
I have written a post specifically about this that you might find interesting:
I always try and find hobbies that align with viable business opportunities. One of the most fun things I ever did was coach volleyball for 5 years. It was so much fun and it barely felt like work: I got to hung out with all of my friends, the parents were awesome and took great care of me and all the coaches partied a lot at tournaments all over the country! Some people like to spend a lot of money on their hobbies but I like to make a lot of money off my hobbies :)
Hi Harry and Sam! This is an awesome story and reminds me a lot of myself. I work in advertising making a very decent wage for my age (I’m 25). This past spring, I was looking for ways to save/pay off student loans faster/buy a a new laptop without putting a huge dent in my paycheck. I researched ways to side-hustle online and found the method that works best for me – babysitting. I made accounts on SitterCity and Care.com and connected with families living in my town who were looking for date night sitters. My friends think I am crazy that I spend my weekends watching little kids when I could be partying but I love the gig. It is super flexible so I make my own hours and can take a night off if needed, but still pays well.
Just in the past 6 months, I have been able to put away $3,500 into a mutual fund through babysitting. Decided not to spend any of the money I made. My SO got inspired by this and got his personal training certificate. He now teaches Crossfit classes on nights and weekends. The best part – he recently reached his dream of opening his own gym and was worried he may have to quit his 9 to 5 job to focus on the gym full time. His boss at the Crossfit gym likes so much he offered to let him work there full time. His hours would be 5:30 to 1:30 so he gets ample time to focus on growing his business in addition to healthcare and benefits.
Sorry for all the rambling but I wanted to reiterate Harry’s point – diversifying your income (no matter how much you make) is a great way to spend your free time. Granted, I don’t yet have children but I am really happy I find something I enjoy that allows me to make extra money. I would encourage everyone to find something they enjoy and try to parlay it into extra cash because you never know where it may lead. Thanks for sharing your story Harry!
Wow your story sounds even awesome-er haha! I couldn’t agree more with you about finding ways to diversify income. It’s not like you have to sacrifice much either, and when you do go out or go somewhere to have fun it just makes it that much better :)
Definitely cool that you found a niche with babysitting, seems like a great way to have fun and earn extra cash. Plus, it sounds like you are putting that money to great use! It’s easy to get comfortable earning that paycheck every two weeks and most people don’t think about diversifying their income until it’s too late.
Sounds like your SO is in a similar position as me but my day job isn’t quite so flexible haha. I’m like Sam though and I like working about 5-6 hours a day and keeping that flexibility/high income so once my side biz/online hustles equal my day job income I’ll be ready to take the jump :)
That’s very interesting way to make extra money on the side. Very cool!
Crap, just realized you need an 06 or newer car. Mine is an 02, it’s a 5sp, and the suspension is pretty stiff which makes for a rough ride.
Does the car always have to be 8 years old or newer? So for example, if I have an 06 now, and next year it’s 9 years old, am I out or do they grandfather drivers in?
Uber does make exceptions depending on the car. Their official policy is 2006 but as you can see I drive an 04 so YMMV.
With Lyft and Sidecar though, the year requirement is not as stringent. All you need is 2000 or newer. They are just starting to bump up 04 to 05 type requirements so I’ll let you know if I get grandfathered in or not with Uber, hope so bc I don’t think it’s a good idea to buy a new car just for rideshare driving.
Sounds like fun but what about security? What would you do if someone held you at gunpoint?
What would you do if you were parked at a stop light and someone came up to your car with a gun?
I knew you would say that – I often wondered too. In short it can happen anytime anywhere to anyone :-)
Happy Ubering – good solution for extra money.
If the nutcase chick you described was a nutcase guy, there’s no way he’s getting into a car ride with me! I wonder how many Uber drivers are women. I’ll stick to my regular job to save my life.
Yea it’s definitely a little different for women but if you have the right personality/attitude you will be just fine. I work with a company called Sherpa that found 10-20% of drivers are female which is about in line with what I’ve found.
I actually have a new female writer on my site if you’re curious to read more about what it’s like from a woman’s perspective, she’s a lot funnier than I am too :)
On second thought, I’m not sure that’s a Lexus?
It is. It’s a 2004 Lexus RX330. I just happened to get a $7 car wash right before I took the pic :)
You’re right, you are not like most engineers. How are you a 27 year old engineer driving a Lexus SUV in one of the most expensive counties in the country? Those raises must have been awesome.
You haven’t read this post?
I just saw a Uber guy pick up my colleague in a Mercedes S500 2010 model! He was a black car though.
Haha Sam is right! I bought that car off my mom at a nice family discount. Just because lots of people around you are spending a lot doesn’t mean you have to :)
Greg and I just had this exact conversation. I told him you drive for Uber, and he said “But, isn’t he an aerospace engineer?” BAHAHAHA
I told him you were just greedy and wanted to make as much money as possible =)
I am greedy, and cheap. IMO, that makes for a good combination :)
honest too :-)
How does your wife accept you for who you are Harry?!
Haha luckily I locker her up a long time ago before she realized she could do better.
Yes it does. I’m FRUGAL too!
This seems like an awesome way to diversify income AND avoid those pesky taxes. Are there any legal/licence/insurance type implications for doing this though? Im pretty sure here in the UK we would need to get a specific taxi licence from the local council to cover ‘private hire’. How about over there?
There’s a big insurance battle that is winding down but the gist of it says that Uber/Lyft cover you while you have a passenger in the car but your personal insurance covers you when you don’t. There’s still a gray area when the app is on but you have no pax that they are trying to resolve right now.
I’m sure these services will be coming to the UK soon so you’ll have a head start on everyone when it does happen :)
I turn the app off becasue of this grey area. I turn it back on when I get home.
Since it’s such a new and disruptive technology, there’s been a lot of legal/insurance issues etc but they are all going in favor (eventually) of Uber and Lyft. There’s no stopping these guys at this point and I’m sure they’ll be heading across the pond soon enough.
As it stands now, Uber provides insurance when you’re on a trip but you are supposed to use your personal insurance when you’re not. The only gray area where there is still some debate is when the app is on, but you have no passenger.
Hmm, the other two responses you got are a little misleading, I think. It’s not just a small case of gray area – there’s a pretty big one. It is true that Uber has an insurance policy that kicks in once you’re on a confirmed ride, and that they *expect* you to have coverage through your personal insurance at other times – the only problem is, any legitimate personal auto insurance policy will kick you to the curb and cancel your coverage the moment they realize that you’re using your car for commercial activity.
I have friends who drive for Lyft/Uber for fun/between jobs – and personally I think they’re opening themselves up to some pretty serious potential risks. None of these people are outright lying, but they’re not being entirely truthful in what they’re doing (and Uber wants it that way – which I think is shady corporate practice). How many people have actually asked their insurance company for confirmation that they have coverage while not on a confirmed ride? I’d bet that number is pretty close to zero.
I’m not quite sure what the solution is – given that many people tend to drive for multiple companies – Uber, Lyft, etc. Either the companies would have to have a comprehensive policy that is in effect at all times a driver is logged on to their app, or a new insurance product needs to be introduced that drivers can buy with specific buy-in from the insurance companies acknowledging the fact that it covers activity for vehicles used on ride-share platforms while not on an active customer trip. In any case, the current situation as we have it needs to change as there have been instances of pedestrians and other bystanders getting hit/run over/killed, and nobody with coverage to pick up the tab – certainly not Uber.
At the rate they’re growing, and as the company’s business has more and more of an impact on society there are issues coming up that need to be addressed – and a lot of growing up the company needs to do when it comes to its corporate culture and how they address public policy issues.
There are definitely still some issues being worked out but I don’t see the insurance issue as a very big one right now – it will get fully resolved sooner rather than later. You are definitely right that most insurance companies do not want to insure rideshare drivers even when they’re not doing rideshare bc they’re afraid of the risk. What risk? I don’t know, but insurance companies are all about mitigating risk so when they don’t understand something, they won’t insure.
There are a few companies who have started insuring but it is dependent on state which makes things even more confusing. You are right that you kind of have to ‘hide’ the truth at this point from your insurance company but I love that aspect of rideshare. I love the disruptive nature of rideshare and instead of waiting for regulators and insurance companies to figure things out, they are moving forward full steam ahead. I love that type of attitude.
Harry, do you ever have problems with finding addresses that people want to go to and not knowing them? I’ve lived in the Denver Metro area for a few years now, but I’ve only been downtown twice and both times to the same place. I live fairly close to the airport and I’d guess that airport taxi is lucrative since it’s a far drive from the airport to anywhere. I’m close and it’s still 20 minutes to the terminal with no traffic.
I know the areas I drive pretty well (OC/LA) so never have too much of a problem. But you also get to know the areas very quickly after just a few times out driving. I didn’t know anything about the mid-Wilshire/West Hollywood area but after just a few days I learned it pretty fast.
Denver is a good spot, using whatsthefare.com it looks like it would be around a $40 ride each way from the airport to downtown Denver (minus gas and Uber’s 20% fee).
Not really since most riders enter the destination into the app so once you start the ride you can just follow the GPS. It definitely helps to know the area though and you learn pretty quickly after driving the area just a few times.
I used whatsthefare.com and it looks like a ride from the airport to downtown Denver would be around $40 (minus gas and Uber’s 20% fee).
Good stuff. Seems like an easy and fun way to make a little extra coin. I’m staying pretty busy writing these days and I don’t live in an Uber market, but if things were different I’d definitely consider trying this out. Seems like a way to have fun, meet interesting people, and make some money all at the same time. :)
Yea I do a lot of work online so it’s definitely nice to take a break and do some driving. You do meet a lot of interesting people. Just yesterday I drove around a life coach from New Zealand, an architect, a former playboy bunny and a top art history guy working on an exhibit at the Getty museum :) Lots of interesting conversations.
It’s funny you bring that up because I ALWAYS ask my Uber drivers if they drive full time or on the side. I’ve been driven by doctors, construction workers, etc.
The other day I got in and asked the guy and he told me he just returned from Korea teaching abroad, spontaneously quit his job here and decided to start driving until he found his second calling!