You’ve done the hard work of creating a budget. You’ve cut frivolous expenses. You’ve crafted a financial plan that lets you tell your money where to go instead of wondering where it went. But even with a steady job and a sensible budget, you still find yourself living paycheck to paycheck. It looks like you’re going to have to find a way to earn some extra money, a side hustle.
With more than 44 million Americans working more than one job, the challenge is a familiar one. As job seekers search for flexible work opportunities, many businesses are busy exploring alternate ways to assemble a workforce of independent contractors. With hundreds of thousands of individuals working under their respective banners, ridesharing services Uber and Lyft seem to have figured out how to recruit effectively. But as more and more people sign up to be drivers, are they seeing a worthwhile financial reward for their work? A recent study set out to answer that question.
Don’t overlook those operating costs.
Conducted by MIT’s Center for Energy and Environmental Policy Research, this study found that when operating costs were factored together with earnings, Uber and Lyft drivers earned an average of $3.37 per hour. In her article detailing the study, Mashable.com writer Monica Chin shared this explanation of how routine maintenance and travel-related costs can impact overall earnings:
“The study found that because of the high costs of insurance, fuel, and car maintenance, 74 percent of ride-share workers make below minimum wage in their respective states, and 30 percent actually lose money on their jobs. Drivers earn a median of 59 cents per mile driven, while incurring a median expense of 30 cents per mile. 40 percent of those costs were attributed to insurance, maintenance, and repairs, 40 percent to gas, and 20 percent to depreciation.”
Success isn’t automatic. But it’s possible.
As you can see from those statistics, there’s more to making money than just signing up to do the job. Success as an Uber or Lyft driver hinges on a combination of factors such as location, public transportation options, work availability, and smart personal business practices.
If you’ve been thinking about driving for Uber or Lyft, the future isn’t all doom and gloom. It’s possible to make money, potentially even a decent full-time income. The secret lies in approaching the opportunity with the mindset of a business owner instead of an employee. Creativity and efficiency are rewarded. Just showing up won’t cut it.