Debunking 7 Myths About Being a Rideshare Driver
Interested in signing-up with a rideshare company like Uber or Lyft? Before you quit your job or plan on how you’ll spend all of your new-found disposable income, here are seven myths that you need to steer clear of:
Myth #1: You’ll make a lot of money.
Truth: Will you make money? Yes. Will you make a lot of money? Probably not. Once you take into consideration vehicle wear, maintenance and depreciation, along with booking fees and tolls, your net pay on certain days might be less than minimum wage. Of course, there should also be times when you’ll make $20, $30, $40 and even $50/hour if you’re lucky and can take advantage of surge pricing (e.g. if you’re picking up passengers during a major storm, New Year’s Eve, etc.).
Myth #2: You can make roughly the same amount of money regardless of where you operate.
Truth: You stand a much better chance of boosting your income if you work in an area that has a high volume of rideshare customers — but not a high volume of rideshare drivers. If you live in a small city or rural area, while the competition should be lower, you may find that demand is sluggish.
Myth #3: You won’t have to purchase additional insurance.
Truth: Many people who sign-up to become rideshare drivers are surprised — and not pleasantly — to discover that they need to purchase additional primary commercial/business liability insurance, just like people who drive caps, limos, themed party busses, and so on. Some rideshare companies provide secondary insurance, which means that the policy kicks in when passengers are in the vehicle.
Myth #4: You can use your new, safe and stylish 2-door sports to carry around passengers.
Truth: Sorry, but you need a 4-door vehicle to drive for rideshare companies.
Myth #5: You have to work whenever the rideshare company tells you to.
Truth: Since you’re an independent contractor and not an employee, you can work whenever you want to. However, many rideshare drivers work from 7am to 11am, and then from 3pm to 8pm, because fares and demand at other times can be rather low.
Myth #6: If you drive for a minimum number of billed hours in a year, you’ll qualify as an employee.
Truth: All rideshare drivers are independent contractors, regardless of how many hours they drive. That means there are no benefits, severance or seniority.
Myth #7: There are already too many people driving for rideshare companies, and so there’s no point in joining a crowded marketplace.
Truth: While some areas have a glut of rideshare drivers — especially during surge pricing windows, such as New Year’s Eve — overall there is a shortage of drivers. One of the biggest reasons for this is that an estimated 75% of new rideshare drivers quit within 90 days.
The Bottom Line
Is driving for rideshare companies right for you? That’s not a question that this (or any other) article can definitively answer. However, you are now much better equipped to conduct your research and ultimately make a decision based on facts — not myths.