If you are a social media buff, then you would surely have read Facebook posts about ‘How much money Uber drivers make.’ In the past few weeks, there have been at least five different viral videos and blog posts boasting about how much money Uber drivers have been earning.
UBER: The Luxury of 21st Century
If you ask me, what is the biggest luxury of our times is then I will definitely say that it is ‘Uber.’ The little app on your smartphone lets you book a cab from anywhere to any place you want to be. In most countries, Uber drivers work 24/7, and it is really easy to book an Uber cab anytime of the day or night.
Errr… Wait! What is Uber?
Well, I know there might be a few people who might be asking this questions ‘What is Uber?’ Uber is a location-based app that allows you to book a cab from your smartphone. Uber operates in more than 77 countries, and it is present in 500+ cities, and it is growing at a fast pace.
Uber is no regular taxi service, you can book an Uber taxi with the Uber app on your smartphone, set the pick-up location and destination on the app, and you can see all the available cabs in the location live on a map.
Uber gives a lot of coupons, discounts and new offers every day to attract new customers. Uber’s fast, error free service, accurate billing, and good customer relation has helped Uber become a household name in a short span of time.
After giving a driver’s license test, you can attach your car and ready start the business with Uber. Attaching your car with Uber becomes the most luxuriant business in 2017.
How much money does the average Uber driver make?
There have been rumours about ‘how much money the average Uber driver makes,’ few reports suggest that an average Uber driver in the United States of America makes about $90,000 a year. But is that figure accurate? Does an average drive earn $90K in a year?
Before we reveal the exact figure of an Uber drivers estimated earnings, let us first discuss how exactly an Uber driver earn money.
Now you must be planning to start the business with Uber or any cab companies. But the question is how? Here’s the article on how to start business wth Uber.
Uber Driver Pay Structure
Yes, you need to know the exact pay structure of Uber Drivers because the most popular location-based Cab service in the world does not own even a single cab. Yes, that is correct Uber as a company does not own even a single car, but Uber lets car owners partner with it and provide cab service, and the cab owner gets paid for the service.
How are Uber driver fares calculated? (Updated 2017 rates)
Note: The Uber fares/prices are different in different cities. We are going to use Los Angeles as an example.
Uber has different fare for various types of cars and has pretty unique names for them. The most common type of car that you can book is a sedan nicknamed as the Uber X. Uber has SUV’s, mini cars and other luxury cars called as the Uber Black, Uber SUV, and Uber LUX.
Different types of cars have different pricing. And the estimated earning given below are for a sedan; Uber X.
Whenever an Uber user books a trip to somewhere the user is charged the fare when the trip ends. The fare depends upon how far you took the trip and how long the trip took to complete.
The last fare is calculated by adding a base fare + time and distance rates. Sometimes the user might be charged a small booking fee.
Now that we have the formula of how the fares are calculated we can get the estimated money an average Uber driver is earning.
If you were to travel to Downtown Los Angeles to the West Hollywood, which is approximately 9 miles and 35 minutes away. The fare for this trip will be calculated as below:
(9 miles x $0.90) + (35 minutes x $0.15) + $1.65 booking fee = $15.00
At the end of a 9-mile drive, the Uber driver has earned about $15. Uber charges a percentage of each trip fare and the remaining fare goes to the Uber Drivers account.
If an Uber driver were to take approximately ten trips between Downtown LA to Hollywood each day, then the Uber Driver would have earned at least $150 per day.
And if the driver takes the same route every day and works five days a week, then he would have earned $750 a week.
Estimated Earnings of an Uber Driver
Drivers in San Francisco are making $732/week in net earnings
Drivers in Los Angeles are making $616/week in net earnings
Drivers in Chicago are making $648/week in net earnings
Drivers in Boston are making $732/week in net earnings
Now the biggest question is How much does Uber take from the driver?
What percentage cut does Uber take from the total fare cost of a ride?
Many people have asked this question, does Uber charge per fare or do they charge a fixed amount per month for the drivers?
Well, Uber charges the drivers a fixed 20% cut from the total trip amount.
So, according to the above example, the driver would pay 20% of the fare amount to Uber. Any driver earning $750 a week can end up paying $150 as a fee to Uber.
In many emerging markets Uber gives an extra incentive to encourage drivers to signup with Uber. Uber pays a signup bonus of about $300. In some markets Uber pay drivers a small incentive if they complete a set of trips if a driver completes 10 or 16 trips, the driver gets paid some incentive.
Uber Drivers Love Surcharges
Whenever there is a huge demand for Uber cabs, Uber increases the prices one or two times over. The surcharge totally depends upon the traffic, demand for cabs and shortage of cabs in your city.
Imagine you are in Times Square, New York on New Year’s Eve and you need to go back to your place just after midnight. Imagine the chaos, the traffic, the high demand for cabs. Now imagine how much would you pay to reach your home safely soon after midnight?
That’s how surcharge works; the more demand, the more money you need to pay. And this is a golden opportunity or Uber cab drivers to make a little more out of this chaos.
We hope you got the idea of how much an average Uber driver makes every month. The best thing about working with Uber is that you have no boss, you have no work timings, and you have no colleagues who bother you and certainly no office politics.
A lot of young students and professionals have been driving Uber to make some extra cash with their free time over the weekend or during semester holidays. The social media is full of such success stories about how University graduates have been able to pay off their student debt with the money they earned as an Uber driver.