While independent work is great, not all jobs are created equal. When choosing how you are going to take charge of your own income, there are many factors that come into play. You need to account for costs, potential risk, and income potential relative to time put in. These are vitally important things to consider, and you don’t want to waste your time by not doing so. One of the most popular side-hustles, ridesharing, has some sneaky costs and risks involved. They are easy to overlook and hard to quantify at times, but you need to consider them. While gigging with companies like Uber and Lyft seems attractive, it may not actually be a very lucrative opportunity. So, to help you make a smart choice, here are the reasons you shouldn’t be a rideshare driver.
Tangible Costs
This probably includes many things you have already thought about, but they are worth mentioning anyway. Gas, insurance, maintenance, and cleaning costs are all going to eat away at your income. Driving for a living is a lot different than driving for your own needs. These expenses add up extremely fast, and you can end up in a very tough situation by putting additional wear-and-tear on your vehicle. depending on what you’re driving, repairs can cost a small fortune. So, if you are putting thousands of miles each month on your car, you are going to have to repair it far more often, and lose much of your income in the process. The bills add up, and you need to make sure that you are recouping those costs.
Sneaky Costs
These are the more subversive issues with rideshare driving. Many people who are driving for a living have a loan out on their vehicle. Now, these loans are often structured to make sense for the average driver. As you pay down the loan, your payoff should be somewhat close to the value of your car on the resale market. There are a few factors that can change this, and one of the most major is the mileage on the vehicle. If you are driving far more than the average driver, your car is going to depreciate much faster than you will be able to pay down your loan. This leaves you “upside-down,” or owing more on the car than it is worth. If this becomes your full-time gig, the difference can get massive.
Poor Income Tradeoff
According to Glassdoor, the average Uber driver makes $13-16 per hour. This isn’t far above the minimum wage in most places, and the costs are much heavier than those involved with other jobs. Not only that, but you are also often risking your main mode of transport if your driving causes excess wear-and-tear on your car. While there are some people who have a situation that lends itself well to this line of work, most people could make much more doing something else, and with much lower risk. At the end of the day, you are probably better off just getting a second job.
Trey LaRocca is a freelance writer, financial sales worker, and tech guy. When he isn’t out and about or at work, he’s usually at home enjoying some video games and a beer. Currently residing in Newport Beach, this California Kid can be found at the beach on any given weekend. Trey has years of experience in day/swing trading, financial analytics, and sales.