Sunday, February 7, 2016

Make Money: Uber/Lyft


It's a beautiful morning here in chilly Nebraska as I write you all another installment of how to make money with a side gig. Today I'd like to discuss something that I both love and hate for so many reasons. I'd like to discuss the possibility of making money by driving with Uber or Lyft. Let's dig in, shall we?

What is Uber? What is Lyft?

Uber and Lyft are both companies that act a lot like a taxi service. The difference is that instead of a taxi coming to pick you up by calling a phone number, Uber and Lyft are activated by an application on your phone that lets you post your current placement and your final destination. An Uber or Lyft can then see your request and attempt to contact you via the app to show their interest in carting you to your destination for often times much less than what you would pay for a cab. You can then pull up that Uber or Lyft driver and see a picture of them, their rating by passengers that have been carried by them in the past, and make your decision on whether you'd like to use them. Be careful however, they aren't the only one that can be rated. Passengers are rated by the drivers as well and if a driver drops below a certain rating, they may be bared from driving any further with Uber or Lyft. This is to attempt to make sure that passengers are polite and don't cause trouble to the drivers and vice versa. 

How much does it cost and which costs more to use as a passenger?

Often times, both of the different ride share companies charge virtually the same fees. Both offer regular rides and also offer more expensive rides such as a nice "pimped out" SUV or even a Bentley if you're lucky enough to nab one. Ultimately it's up to the city in which you live to determine the true cost of your ride. Bigger and busier cities are generally more expensive but are more packed with different drivers for you to choose from. A good thing to remember if you're bargain shopping as a rider is that if there is a high demand for a ride from passengers, rates may go up during those peak times. This means you'll pay more if there are less drivers around and too many passengers. This also means that if you're a driver, it benefits you to keep an eye on your application to see when there is clearly an influx of passengers requesting a pick up and cash out on the bonus money for your time. 

Which should you drive for if you decide to become a driver for such a service?

This question is easily answered by the following question: would you rather transport business folk who prefer a more professional ride or would you rather it be a laid back and fun atmosphere? There is a clear distinction between the two. Nearly all of my friends have said the same thing about each company without even being prompted for an answer. Uber appears to be aimed at a much more professional crowd. They generally attract those who are of a professional manner and who wish to be transported in the same fashion - business men, lawyers, etc. Lyft on the other hand is a more fun service that is generally best used after a night out with friends at the bars. This is reflected by the pink mustache that is pasted on many Lyft vehicles. Many a Lyft driver will spend time chatting with you and engaging in fun conversation after a drunk night out on your drive home. With that being said, it's generally recommended that you choose the service that best fits your personality. If you're a shy person and would rather be more of a butler, choose to be an Uber driver. If you are the life of the party or love exchanging fun stories and just generally having a much less professional atmosphere, be a Lyft driver. 

What happens if I get into an accident while driving passengers around?

If there is anything you can take from this post, make sure it is what I'm about to tell you. I have an insurance background and I have had numerous discussions with people who don't know that they are uncovered for their vehicles when driving for Uber or Lyft except by their basic policies that come with the service. You need to think about it from your insurance company's prospective. They determine your monthly rate depending on various factors. One of those factors is how many miles you drive per year and your likelihood of having numerous passengers. Generally, if you're driving your own car, you rarely have passengers when compared to the general population. If however you are a ride sharing vehicle, you have passengers that are at risk for bringing an injury claim against you on a regular basis. If your insurance company doesn't know that you are a ride share vehicle and they haven't rated your vehicle as such, you likely don't have coverage on your own policy if you crash your vehicle and have injured passengers. The good thing to take away from this however is that there is an easy solution. Call your insurance agent and make sure to let them know that you are going to become a ride share vehicle with Uber or Lyft (or any of the other companies that are starting) and make sure that your policy reflects that. Most of the time there is a small additional endorsement to your auto policy that may charge you a small extra fee per month but that's much less expensive that paying out of your pocket for a bodily injury claim being made against you, trust me. 

How much will I actually make doing such a thing with my vehicle?

I've spoken with a handful of friends in my area (Lincoln, Nebraska) and it appears that the average driver here makes on the best days about $35/hour without tips given freely by riders. Keep in mind that I say that's the rate for their best days. On slower days, they can make only a reasonable $10/hr. That's still better than the minimum wage here in Nebraska currently but there are other costs that need to be thought of. First off, your service comes with a catch. You will be placing miles on your vehicle which causes wear and tear that you would otherwise not have. Secondly, you could be signing up for a hassle. There are definitely better passengers than others and some may give you a headache that you would never believe you could get. If on the other hand you have worked in customer service prior to starting into the business, you'll be well prepared for handling all types of passengers. On the other hand, there are perks. You work on your own schedule. If you don't want to be driving around one day, don't turn on your app. You make your hours and therefore you control how much driving you do. Also, you could use it while you're doing other things to double your productivity. You could be studying a language in the front seat of your car through  your radio while waiting for passengers. You could blog out of a coffee shop while overlooking your vehicle in the parking lot. The possibilities are endless and it's up to you to decide if you want it or not. 

Now it's your turn:

Have you ever been a driver or passenger for one of these companies? How was your experience? Would you become a driver after this write up or would you rather just skate on by?

1 comment:

  1. Many people assume that they are insured by Lyft and Uber, or that their personal car insurance will cover them in the event of an accident while they are driving. In reality, the insurance provided by rideshare companies like Lyft and Uber is not what it seems, and the lack of information provided about this coverage leaves many drivers in the dark. While you are driving with either of these companies, the coverage is dependent on a couple of variables.