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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