You probably spend a fair amount of money on your car, between insurance, gas and maintenance. Why can’t it pay for some of its keep?
In the past few months, we’ve shared details on using services like Relay Rides and Getaround to make money from your car. But those options aren’t a good fit for everyone: many car owners don’t fancy the idea of handing the keys over to a stranger.
If that sounds like you, don’t fret; the growing popularity of ridesharing companies means you have the potential to make good money behind the wheel of your car. These transportation alternatives, including Lyft and UberX, are revolutionizing public transport by putting the onus on citizens to move their neighbors around.
And it doesn’t require a bright yellow taxi — all you need is a vehicle, a few spare hours each week, and the willingness to chauffeur people from Point A to Point B. Here’s how to get started.
How Does Ridesharing Work?
Uber originally began as a professional driving service — what is now called UberBLACK — whose drivers had to be commercially insured. Lyft’s entrance into the market, empowering anyone over the age of 23 to drive their own car with standard insurance, prompted Uber to introduce UberX — which has since become its most widespread service.
Both services embrace simplicity. They operate from an app on your smartphone, and money never changes hands. Drivers and passengers rate one another after each ride, and the app tracks the locations of drivers and passengers so you can look for nearby pickups.
For passengers, this means safe, reliable and enjoyable transportation. For drivers, it’s a solid opportunity to make money. You’ll need a relatively new car in great condition, a nearly spotless driving record and a penchant for charm. Lyft operates in 64 cities across the U.S., while Uber runs nationwide as well as in 38 other countries.
How Much Can Drivers Earn?
It’s pretty simple to earn a few spare bucks as a driver. What’s more impressive? In the right city and with a little extra effort, you can actually earn a living working for Lyft or UberX. (Like this idea? Click to tweet it!)
Nigel Larson, a stand-up comedian, told us he discovered Lyft while looking for a part-time gig that would mesh well with his unpredictable comedy schedule. During weeks he’s less busy and needs the money, he puts in the time to make $1,000 to $1,300. When he’s busy booking comedy gigs, he’ll only drive two or three days per week and earn $400 to $500.
And then, of course, there are the intangible benefits. On one trip to the airport, Larson was surprised to discover that his passenger was actually the Vice President of Lyft, and wound up having a great conversation. Silas Lindenstein, another driver, once officiated a wedding in his car — not exactly a typical day at the office.
Make the Most of Your Driving Time
When you drive for these services, you’re a contractor, not an employee. You have no boss to report to, which means you can plan your own schedule. When you’re logged into the app, you’re considered available to accept rides. Done working for the day? Just log out. Need time off? There’s no one to seek approval from; no one to notify.
The freedom and earning potential is what inspired Lindenstein to become a driver. He’s a father and a comedian, so the option for a controllable income and flexible schedule was key. When I spoke with him, he was preparing for his daughter’s field day at school.
“It’s great that Lyft and Uber have put me in a position that I can still have my life, career, and my daughter. Making money and balancing a life — it’s particularly hard for artists to do.”
Larson recommends making the most of your driving by focusing on high-demand times: during rush hour and on weekends. But, he warns, be ready to deal with drunk people. Lyft compensates you for customers that throw up in your car — something Larson learned the hard way.
Should You Drive for UberX or Lyft?
Drivers for both services earn 80% of the fare for each ride. So, how do you choose between them?
The companies have developed distinct personalities: UberX is “your private driver” — it’s all about exclusivity. Lyft, by contrast, is “your friend with a car” — it’s all about fun. After all, drivers identify themselves with a big pink moustache stuck to the front of their cars!
Larson drives for both services (but is never logged in to both apps at once — that’s a big no-no). Some days, his choice is based on demand; other days, on his mood. If you’re not feeling chatty, drive for UberX — polite, polished and professional. Feeling extroverted and energetic? Drive for Lyft — your passengers will hop in the front seat and there’s a good chance you’ll end up becoming Facebook friends.
What About Insurance?
Both UberX and Lyft now guarantee drivers tiered coverage on top of a driver’s personal car insurance:
- Tier 1: you’re logged into the app but haven’t accepted a ride
- Tier 2: you’ve accepted a ride but don’t yet have a passenger
- Tier 3: you’re transporting a passenger
At Tier 3, both companies offer $1 million in driver liability, kicking in if your personal insurance denies the claim or doesn’t fully cover it. Right now, commercial insurance is not required — though it’s a legal hurdle both companies are facing.
The Future of Ridesharing
Whether driving for these services will be a good option for you mainly depends on where you live. Both Lyft and UberX face the challenge of convincing local governments of their value. Ridesharing is a disruptive service that impinges on the livelihood of taxi and limo drivers, its detractors argue.
Areas with solid fan support offer good prospects for drivers. In Seattle, Uber and Lyft teamed up to get 36,000 signatures to lift the proposed cap on drivers — double what they needed. Lawmakers in Colorado passed a bill in May 2014 that will legalize the services and regulate their drivers. However, the outlook isn’t so good in municipalities like Miami and Virginia’s Arlington County, which have imposed bans on ridesharing services, or in Europe, where Uber covers 20 cities and has inspired widespread strikes by taxi and limo drivers in the U.K., Paris and Berlin.
Uber and Lyft have both done well building partnerships and capital assets, so there’s a good chance they’re not going anywhere anytime soon. But it doesn’t mean the battle won’t continue in certain cities and abroad, and the services will likely go through some iterations.
Your Turn: Would you drive for a ridesharing service to earn extra money?
Sara Frandina is a New York-based copywriter and editor with a relentless love of words and an insatiable appetite for books, travel and popcorn. She spends her days happily creating copy and crafting content for her clients at sarafrandina.com.