When it comes to side hustles, being an Uber driver is at the top of the list for many people. But should you be rushing to sign up? It turns out being an Uber driver might not be the ideal side hustle you think it is.
Where Have All the Drivers Gone?
A recent article from CNBC revealed some terrible statistics. Uber only has a 4% retention rate with their drivers. With all of the marketing and enthusiasm about being an Uber driver, that statistic should be a warning sign that it’s not all it’s cracked up to be.
Show Me the Money!
The main reason for the low retention rate was pay. While driving an Uber may seem financially beneficial, there are significant costs involved. Not only do you need to pay for fuel, but there is the cost of your vehicle. Besides the monthly loan or lease payment, there are additional maintenance costs, especially since you will be driving more miles. Plus with Uber you are an independent contractor and not an employee. This means you are responsible for self-employment taxes as well. All of this adds up and when you are only making $10-15 per ride, it’s difficult to make money.
Plus, you have to spend a lot of time finding riders. If you live in a busy city this may not be much of an issue, but I’m sure it is in smaller towns. This time waiting for riders is an opportunity cost. If you factor all of this time in, in some cities drivers are only making $8-10 an hour.
It’s More Than Just Low Pay
In addition to the low pay, there is the risk of riders leaving Uber and the face that Uber is trying to replace drivers.
Uber has had a rough past few months. They’ve had hundreds of thousands of people delete their app. Then there was the revelation that they were actively trying to circumvent local governments. While it appears that none of these issues have had a major impact on Uber overall, they do serve as a warning. As a driver, you ultimately are at the mercy of how Uber is perceived in the marketplace.
The other issue is that Uber is actively working towards replacing their drivers with autonomous vehicles. Uber is currently performing driverless tests in a few cities and as time goes on, self-driving cars get closer to becoming a reality. Although this technology is years away, who wants to work for a company that is publicly trying to replace you?
Where you or are you currently driving for Uber? Tell me about your experience in the comments below.
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