What You Should Know Before Becoming an Uber or Lyft Driver

Becoming an Uber or Lyft driver can seem very enticing. After all, it seems like a great way to earn some additional income in a flexible way. Many people have already joined the rideshare revolution as drivers; statistics show that around 2 million driving for Uber and 1.5 million driving for Lyft in the US alone.

However, before you decide that driving for Uber or Lyft is right for you, it’s important to think carefully. There are some things that you should know, before you make a final decision.

The Appeal Of Driving For Uber Or Lyft

Let’s start by looking at the appeal of rideshare companies like Uber and Lyft. Really, this appeal is two-fold. You get to earn some extra cash and you can work the hours that you choose to.

While this appeal is based on fact, it’s simplistic. There are several things that can have an impact and that you need to know about.

Requirements To Be An Uber Or Lyft Driver

You may not realize it, but becoming an Uber or Lyft driver is not quite as simple as being able to drive and having a vehicle. There are certain requirements that you need to meet. You need to:

Be at least 21-years-old.
Have held a license for at least one year. (Three years for Uber if you are under 23).
Have vehicle insurance in your name that meets state requirements.
Have a social security number.
Agree to a full background check.

Your vehicle also needs to meet certain standards in order for you to become an Uber or Lyft driver. For instance, in order to be able to drive for Uber’s basic service, the vehicle needs to:

Be manufactured in 2002 at the latest.
Have at least four seats, not including the driver’s seat.
Have state-issued license plates.
Not previously used as a taxi.
Have four doors.

The main difference, in the case of Lyft, is that the car usually needs to be manufactured in 2006 or later.

Rideshare Insurance

Meeting the requirements to drive for Uber or Lyft is only part of the story. There are several other things that you need to think about. One of the most important of these things is rideshare insurance.

This is an add-on to your private vehicle insurance that you should think about taking out to supplement the insurance that Uber and Lyft put in place for drivers. The reason that you need additional Uber insurance or Lyft insurance is to fill gaps in the insurance that is provided for drivers, such as coverage for the time when you are not on the app and additional liability coverage.

Other Considerations

There are other points which should be taken into account when you are thinking of becoming an Uber or Lyft driver:

Your vehicle will sustain extra wear and tear which can be expensive to deal with.
You do not have a boss or colleagues, so you may feel as though you are out on a limb sometimes. However, you do get to meet new customers all the time.
Dealing with the payment of tax can be difficult. However, there is information available online which can be helpful.

Is It Worth Becoming An Uber Or Lyft Driver?

Having looked at all the points mentioned in this article, you may be wondering whether it’s worth starting out as an Uber or Lyft driver.

The truth is that only you can make that decision. Doing this type of driving can certainly be a way of making extra money. However, you may not earn as much as you imagined you would. Earnings depend on a lot of things such as where you are driving, how many hours you work and how high your associated costs are.

It’s also worth remembering that Uber and Lyft take a percentage of what drivers earn. For instance, in New York, Uber takes 20% on every UberX fare. The percentage increases for other Uber services. Lyft takes 20% of all fares.

This does not mean that you will not make money as an Uber or Lyft driver. However, you will need to think strategically. This includes finding ways to optimise your earnings, keeping expenses to a minimum and optimizing potential tax write-offs.

Take time to consider all of this information before you decide if becoming an Uber or Lyft driver is the right thing to do.