If you’re interested in making a side stream of income or if you just like the idea of talking to more strangers on a regular basis, you might consider driving for a ridesharing service like Lyft or Uber. But is ridesharing a good way to make side income?
The Benefits of Ridesharing
Let’s start by taking a look at some of the benefits of ridesharing.
An onramp to earning.
The path to becoming a rideshare driver is short and simple. Depending on which app you use, you’ll likely need to fill out an application and take a few photos of your vehicle. From that point, you’ll face a background check and a short review to determine whether you are a valid driver for the service. Assuming your vehicle is in good condition and you pass the background check, you’ll be ready to start driving almost immediately.
Ultimate flexibility.
Ridesharing is well known for its impressive flexibility. You can make it work with almost any job and almost any other set of responsibilities because you’re allowed to drive whenever you want and wherever you want. You don’t have to work a specific number of hours, nor do you have to work a specific schedule. If you’re having a hard time moonlighting because of scheduling demands, this could be a great way to make some extra money.
Streamlined work.
The work itself is not difficult. While working as a rideshare driver, you’ll get a notification on your phone when a passenger is ready to be picked up and you’ll be given immediate directions for how to get there. You’ll also get directions for the passenger’s destination, making navigation easy. As long as you know how to drive and you’re willing to make a little bit of small talk, you should have no trouble accomplishing all your responsibilities.
Networking opportunities.
Ridesharing is also a great way to network and meet new people. Throughout your tenure as a driver, you’ll meet all kinds of people from a variety of different backgrounds. You can learn more about a variety of different industries and possibly make connections that aid you in other areas of your professional development. For example, you may run into your next employer or investment partner.
Seeing the city.
Some people love to drive for ridesharing companies because they like the experience of driving. They get to know their city better, they get to practice their navigation, and they get to enjoy their vehicle for extended cruises.
Potential Drawbacks
There are some potential drawbacks, however.
Insurance and other considerations.
Before you can start driving for any rideshare service, there are some important things to take care of first. For example, your standard car insurance policy may not cover you for accidents or damage related to your ridesharing activity; for that, you’ll need specific rideshare insurance. you may also want to install a dashcam and/or an internal camera to capture evidence of your ongoing experiences in case you ever run into a problem.
Limited profitability.
Many rideshare drivers lament the low profitability of this endeavor. You can pick up a variety of fares throughout the workday and collect significant tips along the way, especially if you’re willing to put in long hours. But remember, you only get to keep a portion of the earnings and you’ll still have to pay for things like fuel, insurance, and vehicle maintenance. When you crunch all the numbers, you could be making barely above minimum wage.
Demand fluctuations.
Demand isn’t consistent in the ridesharing world. Sometimes, you’ll be flooded with requests, bouncing from 1 passenger to the other constantly. Other times, you’ll be stuck waiting for a single passenger for more than an hour. If you have an inconvenient work schedule, you may find it difficult to get a stream of passengers sufficient enough to turn a profit.
Competition.
Another problem is competition. Assume that you’re driving in a city that is highly populated and where ridesharing services are very in demand. Fares are also structured so that ridesharing is a profitable way to make side income; these conditions will lure out a large number of drivers, meaning you’re going to have much more competition on the road. That, intern, means you’ll pick up fewer fares and you’ll have a harder time making the money you want.
Rare incidents.
You don’t have to look far to find Uber driver “horror stories” of awful passengers and terrible driving experiences. People vomiting in the back of your car, people refusing to leave your vehicle when they reach their destination, and medical emergencies are just some of the common threads. While these incidents tend to be rare, they also tend to be devastating and can ruin your experience.
The Bottom Line
What’s the bottom line? Driving for a ridesharing service can be a great way to make money, especially if you don’t have much time or scheduling flexibility. But it’s not always the most profitable way to spend your time and to be adequately prepared, you’ll need to plan proactively.
