What Makes Driving for Uber Worth It?

So I started driving for Uber about a month ago as a side hustle and a question I get a lot is “Is it worth it?” This is a fair question considering the added miles and maintenance on my car. As I started to play around with the numbers (I love to math), the answers to two questions tell me everything I need to know.

Question 1: How much does it cost me to drive my car?

One of my competitive advantages is my Toyota Prius. I bought it five years ago specifically for it’s gas mileage. Before that I was driving a gas guzzling Saturn Outlook. My commute to and from work is about 50 miles a day so you can imagine how much filling up was hurting my wallet back then. Back to the question at hand. Staying on the conservative side, the Prius can go 450 miles on 10 gallons of gas. Where I live, gas prices have been less than $3.00/gal but we’ll go ahead and use that for this example. We now have everything we need to answer the first question.

$$\frac{10 gal}{450mi}\times\frac{$3.00}{gal}=\frac{$30.00}{450 mi}=\frac{$0.067}{mile}$$

It only costs me a nickel and some pennies to drive one mile. However, the answer to this question alone doesn’t tell us whether driving for Uber is worth it. We need to compare it to something. That brings us to the second question.

Question 2: How much can I get paid per mile by driving for Uber?

This is actually a trick question. While Uber pays \$0.645 per mile and \$0.0825 per minute on top of a base fare of \$0.75, the tax deduction for each mile driven is what really matters. Why is this the determining factor and not other deductible expenses or even Uber’s pay schedule? Every driver is going to have different routines, different maintenance needs, and different trips. Although your tax deductions can most likely be further optimized, this is the least common denominator. For the year 2017, the deduction is \$0.535 per mile which is eight times the cost to drive my car. Even if I drive around and around and have zero pick ups I still benefit by simply being online. Let’s take one of my normal days for example. I typically Uber on my way home after work and if it’s a slow day, I essentially deduct the miles for my commute home – something I would not be able to do had I not been driving for Uber.

You may be saying to yourself, “That’s all great, Mark, but you drive a Prius. There’s no way my _______ would make it worth it.” I beg to differ. Let’s do the math that we did in the first question with different numbers. Let’s say you drive a 2017 Ram 1500 which is advertised with 13mpg and gas prices are at an all-time high of $5.00/gal. Let’s see how it shakes out.

$$\frac{1 gal}{13mi}\times\frac{$5.00}{gal}=\frac{$5.00}{13 mi}=\frac{$0.38}{mile}$$

You probably wouldn’t use a big truck to Uber around town, but as you can see the cost to drive the car per mile is still less than the \$0.535/mile tax deduction. How does your car compare?

Ready to drive for Uber? Help me out by using my referral link!

Check out Stride Drive if you’re looking for a way to track mileage for Uber or any of your own business purposes.

*This post is meant to get you thinking, but it is not professional tax advice. Consult with a professional before making any decisions.

2 thoughts on “What Makes Driving for Uber Worth It?

  1. Your analysis regarding the value of the deduction is flawed. Depending on circumstances, there is the possible issue of itemization vs taking the standard deduction. Assuming not an issue, you’re pricing it like a credit rather than a deduction. A $.535/mile deduction only saves someone in the 25% bracket $.13375/mile in taxes.

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