By some estimates— as many as 10 million people worldwide are now driving for Uber and Lyft which are the two main players in the ride sharing industry. Maybe this is just the ticket to earn extra cash in your spare time but don’t start your engines just yet— we’ve got a few things to consider before you hit the road.
What are the advantages of driving for a ride sharing company?
- You can set your own hours working for these companies.
- Based on one survey of over 1100 ride-sharing drivers, you can expect to make $15.00-$17.00 an hour but most drivers have about 3 to 5 dollars in expenses per hour.
- Every day can be payday when you drive for a ride sharing company. Instead of getting a paycheck once a week or every other week— you can access your earnings whenever you want.
- You’re essentially your own boss but you are rated by the customers.
- The job also doesn’t require any special skills other than driving.
Are some things to watch out for too?
- There’s a security issue but that could happen in almost any job where you interact with the public.
- Both Uber and Lyft provide insurance to cover you for 3rd party liability and uninsured or underinsured motorist coverage. They also cover personal injuries and damage to your car— but to qualify for their collision coverage— you must carry collision coverage on your personal policy.
- Both companies provide insurance to cover you for 3rd party liability and uninsured or underinsured motorist but collision insurance gets a little complicated.
- Neither of the companies reimburse you for oil, fuel, wear and tear on your car so you absolutely have to keep track of your mileage to claim it on your tax return.
- You have to pay taxes on the amount you earn after deducting your expenses.
Next, Rob and Steve tackle listener questions at 800-525-7000 and via email to Questions@MoneyWiseLive.org on a variety of topics:
- What kind of insurance do you have to carry to be a ride sharing driver?
- One you're taking a pension, how much Social Security and federal tax is assessed in retirement?
- How much tax should you count on paying a lot of taxes on ride sharing income?
- If you have income sources that are covering your expenses during retirement and also have about $500 per month in stock dividends that are winding up being reinvested, should you liquidate the stocks?
- Should you consider downgrading your car to increase the amount in your emergency fund?
- If you're in good shape with an emergency fund in place and debt-free except your mortgage, when should you consider contacting a financial planner?
- How do you arrive at a standard income level?
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