Hidden Costs of Being a Rideshare Driver – Articles

If you want to be an Uber or Lyft driver, you need to know about the less-obvious expenses.

Are you thinking of taking on a ride sharing gig? Many people earn all or part of their income driving Uber and Lyft passengers to their desired destinations. However, their net income is reduced by expenses—including the hidden ones. Here’s a look at all the costs you need to know about before signing up as a rideshare driver. (For our cost review we’ll assume you already own a car.)

Visible costs for rideshare drivers

The first visible expense drivers face is for fuel. Whether you drive a gasoline-powered car or an EV, you’ll be refilling or recharging more often.

Also, passengers expect a clean, odor-free ride. Drivers must cover the cost of car washes and detailing. Budget money and time for keeping your car presentable.

Hidden costs for rideshare drivers

The visible costs are the obvious ones. Beneath the surface are hidden costs—some of them that only show up in the long term.

• Rideshare insurance coverage—While companies like Uber and Lyft provide some insurance coverage while you’re waiting for a ride request or have a ride in progress, their coverage doesn’t extend to when you’re offline. Also, your personal auto insurance may not extend coverage to ridesharing as this is a commercial activity. Talk to your insurance company before you become a driver.
• Vehicle wear and tear—More driving leads to more frequent replacement of vehicle components like tires, serpentine belts and wipers, as well as more frequent maintenance like oil changes and tire rotations.
• Depreciation—Mileage directly affects vehicle value. As drivers rack up rideshare miles it reduces the value of the car when they sell it or trade it in.
• Income taxes—Rideshare drivers are self-employed so there’s no tax withholding like when working as an employee. Plan ahead and save money to cover federal and state quarterly estimated taxes.
• Drinks and food while working—Costs add up for the coffee, soda, sandwiches and snacks that fuel drivers as they transport passengers. With careful planning you can minimize food expenses by bringing food from home, but you’ll still have upfront costs for things like an insulated mug, reusable water bottles and a cooler.
• Health—Research shows that rideshare drivers experience physical and emotional health risks, including stress, fatigue, musculoskeletal disorders and urinary disorders.

As you compare rideshare driving to other options for earning money, be sure to consider all factors, including hidden costs.

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