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How to Become an Uber Driver: A Step by Step Guide

Investopedia logoInvestopedia 04-12-2015 Ashley Eneriz
© Provided by Investopedia

Many Americans make their living by driving. Most professional drivers are truck drivers; however, using your own car to drive people and products is a newer career venture that is growing rapidly. Now with companies like Uber, anyone can utilize their car and their schedule to make money as a personal driver.

Where to Start

Before you get too invested in the Uber process, start by filling out the application. Uber will then do a background check on you to make sure that you meet the following qualifications:

  • You are at least 21 years of age.
  • You must have at least three years of driving experience.
  • You must have car insurance in your name in the state you live in.
  • You must have an in-state car registration although it does not need to be in your name.
  • You must have a current in-state driver’s license and Social Security number.
  • You must have a clean driving record. No DUI or drug-related offenses, fatal car accidents, history of reckless driving. Further, you must not have a criminal history.

If you recently moved to a new state, you might be required to submit extra information to verify your driving history. Be sure to have your old state’s driver’s license and insurance on hand. 

What Kind of Insurance and Driver’s License Do I Need for Uber?

The type of car insurance coverage you need depends on your state. Uber does offer insurance coverage but only when you are logged into their app and driving individuals. When you are logged on to the app and waiting for a driver request, Uber’s insurance covers “contingent liability coverage with 50/100/25 limits provides secondary coverage that pays only for losses not covered by driver’s personal policy”.  When you are driving a passenger or are en route, Uber's insurance covers more, including:

  • Commercial liability insurance with a one million limit
  • Uninsured/underinsured bodily injury with a $1 million limit
  • Contingent comprehensive and collision coverage with $1,000 deductible (only for drivers with personal comprehensive and collision coverage)

What Kind of Car Do I Need to Join Uber?

Depending on the city you live in, you will either need a 2000 car model or newer or a 2005 model or newer. Typically, nicer or busier cities require you to drive a car model from 2005 or later. The vehicle also needs to be a four-door sedan that sits four or more passengers, not including the driver. The vehicle must not have a salvaged title or be a marked vehicle or taxi.

There are other tiers of Uber, including Uber XL and Uber Black, that have additional vehicle requirements. For example, an Uber XL driver must have a vehicle that seats six or more, and an Uber Black driver must have a luxury class vehicle within a certain age range.

If you do not have a car that meets Uber requirements, you can consider buying a used vehicle that fits Uber's requirements. Do not buy a new car for your Uber position, since you will be putting a lot of wear and tear on the car. You can also research the possibility of leasing a car, although it is wise to know the mileage limitations before you sign the lease. (For related reading, 

How Much Money Will You Make?

Most drivers will make about $10-20 per hour after accounting for expenses, such as gas and car maintenance. Often, Uber offers up to $200 in sign up cash bonuses when you apply to be a Uber driver. Currently, Uber is also offering up to $500 for a cash bonus for existing Lyft drivers to join Uber.

Harry Campbell from TheRideShareGuy.com says,“There's plenty of earning opportunity as an Uber driver, but you can't just flip on the app and expect to make a ton of money. You have to be willing to try new places, new times and basically go above and beyond what other drivers are doing.”

Another way to maximize your earnings is to drive a cost-efficient car. Driving a hybrid vehicle can save you up $200 a month on gas, which will then boost your cost per hour earnings as a driver. Other ways to make more as a driver include driving during a surge, which is when Uber charges riders more due to the lack of available drivers in that area/time slot, and driving in a populated city. For example, if you live in San Fernando, Calif., it would be better to travel to Los Angeles to find multiple driving opportunities. 

How Do Uber Drivers Pay Taxes?

As an Uber driver, you will be considered an independent contractor, very similar to a freelance worker. At the end of the year, you will receive a 1099-form, and you will have to set aside a percentage of earnings to cover taxes. You will also be able to write off job-related expenses, such as miles, gas, and more. Be sure to keep a detailed log of your miles and expenses. It might also be easier to keep track of your business spending if you have a devoted account/card for expenses. Talk with a certified public accountant (CPA) to get a better idea of what can be written off when you file.

What Costs Does Uber Cover?

As an independent contractor, you are responsible for all of your gas costs, car repair and maintenance costs, and any other car-related expenses. Uber will cover cleaning costs if a rider spills or vomits in the car. It is a good idea to invest in a dashboard camera to protect you against abusive riders and incidents.

The Bottom Line

Is driving for Uber right for you? Uber offers a simple way to earn money in a flexible way. As the driver, you decide how much you drive and which hours you drive. You can easily drive with Uber as a part-time or full-time business or fit this job into your school or existing work schedule. 

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