I got paid. Yay payday, right?

Wrong.

Uber says you can earn $20 – $30 per hour while driving in your spare time. Is this really true?

One of my Uber riders mentioned what they paid for a fare. ~15 dollars. And what I was earning for that fare was about 13 dollars. So right off the bat I’m thinking I’m paying Uber ~14% of the cost. Okay, I can deal with that. It’s not great, but it’s a fair trade to use their service.

Here come the real fees.

It turns out, the fees are closer to 25% to use their service. So for a 100 dollar day (4 hours of work), you earn $75.

Since you’re an independent contractor, take %50 and put it away for taxes on untaxed income and small business tax. That leaves you with $37.50 for 4 hours of work. How much per hour is that? well, that’s $9.38  an hour. Now that’s pretty insulting. Less than minimum wage in some states.

If you are running this smartly as a business and deducting all of your expenses, then you may have a better income. But, even if you do treat this as legit business taxes equate to about 30%. Let’s assume you are just driving in your spare time and not doing the full on business deductions.

But wait, there’s more.

Let’s look at the hidden costs. Don’t forget to take into account the wear and tear on your car or leasing costs (approx $10 day over 365 days), gas ($10 for 4 hours of driving), and insurance (~$3 day). So approximately $23 dollars in expenses per day of driving.

Let’s do the math. $ 37.5 (earnings after taxes) – $23 (approximate expenses) = $14.5

$14.5 dollars for 4 hours of work. That’s $3.63 per hour. Just barely above what a waitress makes per hour, and she gets tips (that aren’t claimed)!

Let’s say that you have no expenses on your car, or car payments and you’re going to drive your clunker into the ground. $37.5 – $13 (approximate expenses minus upkeep) = $24.50.  Divide that by 4 hours, that’s a whopping $6.13 an hour. Still, less than minimum wage in all states.

So when Uber says you can make $30 / hr driving in your spare time. Consider the costs. 30*25%(uber fees) = 7.5   So $ 22.5 / 2 (for taxes) = $11.25. Then subtract hourly expenses… you get the idea…

Well I guess I’m done driving with Uber. There is something to be said about having a day job where taxes are taken out automatically, even if you’re underpaid!

I was hoping for a bit of extra income, but it seems that driving Uber is waste of time, and wearing on my vehicle. My time is more valuable than $3.63 an hour.

It seems that I’ve reached my desired outcome for driving Uber. To light a fire under my ass. It has worked!

So, what’s next?

Let’s take a look inside Amazon FBA (Fullfillment by Amazon).