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How Does Uber Work? A Beginner’s Guide For Riders & Drivers

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Key Takeaways

  • Uber connects passengers and independent contractor drivers via an app.
  • Passengers use the app to request rides, which drivers can accept or decline.
  • Drivers use their own vehicles and can cash out earnings up to 5 times a day.
  • Safety features and flexible work hours make Uber popular among drivers and passengers.

The information age and ready access to the internet have shifted how we do most things, including the way we move around.

Gone are the days when we’d flag down a cab on the side of the road. Now, thanks to the increasing popularity of rideshare services, hailing a cab is only a touch of a button away.

Sitting at the top of this brave new ride-hailing world is Uber, with availability in over 10,000 cities across the world, 130 million active monthly users, and 72% of the total ride-hailing market share.

But how does Uber work? Come along as we take a glimpse behind the curtains to understand exactly how Uber works, from both a driver’s and passenger’s perspective.

But first, here’s a quick overview of the Uber app.

Uber 101: What is Uber?

Uber started as a non-traditional cab company back in 2009. Since then, it has grown into a juggernaut in the transportation sector, with operations in most major cities across the globe.

Uber drivers are independent contractors, who are connected to passengers through the app, thereby cutting out the traditional hassle of cab-hailing.

Usually, the drivers own their vehicles, which they use to provide Uber services, although Uber also offers rental and lease services through third-party partners like Getaround and Hertz.

Part of Uber’s success is thanks to its dynamic pricing model for both passengers and drivers, where prices are set based on destination and demand. This allows Uber to undercut traditional taxi cabs, boosting its popularity.

The company incentivizes drivers to pick up more fares during peak hours by paying more. This way, it ensures ride availability for passengers during critical times, as well as sufficient earnings for drivers.

How Uber Works for Passengers

The Uber app offers a different experience depending on whether you’re a driver or a passenger. Here’s what you can expect on a trip made through the rider app.

Step 1: Open the Uber App

If this is your first time using the Uber mobile app, you’ll need to create an Uber account. The sign-up process is easy, all you need is your email address and a phone number.

Once logged in, enter your destination into the “Where to?” box, select your preferred ride option, and confirm your pickup location.

Before confirming your trip, check the “see price” function for ride cost estimates.

Step 2: Get Matched With Your Uber Driver

After submission, an Uber driver near your location will see your request and choose whether to accept it or not.

Once a driver accepts your ride request, you can track their arrival on the map. You’ll get a notification when the driver’s vehicle is about a minute away.

The Uber app automatically suggests convenient pickup locations. You can also type in a location or drag your pin on the map to your preferred spot. Wait for your driver at the selected location.

Step 3: The Pickup

Meet your driver and confirm that you’re getting into the right car. The app will show you the Uber car model, license plate, and driver’s photo to make this easier.

For your safety, never get in a car if the driver’s vehicle or identity doesn’t match what’s displayed in the app.

Step 4: The Trip

The Uber app gives the driver turn-by-turn directions, so you rarely have to provide directions yourself.

When you arrive at your destination, complete the transaction through your preferred payment method.

Depending on your region, you can use PayPal, a credit or debit card, or your Uber Cash balance.

Step 5: Rate and Review Your Trip

At the end of each trip, both the Uber rider and the driver can rate each other on a scale from 1 to 5.

You also have the option to give your Uber driver compliments and a tip directly in the app. You can use the preset percentage, or key in a figure of your own choosing.

Understanding Uber for Passengers

We’ve covered the basics of hailing a ride on the Uber app, but that barely scratches the surface of how Uber works. Let’s dive a little deeper.

First, let’s take a quick look at the ridesharing concept on which the Uber app is based. Unlike other cabs, you won’t find an Uber driver parked on the street waiting for a fare. Uber rides are only accessible through the app.

Additionally, Uber drivers use their own vehicles to conduct business and don’t need special licenses like other taxi drivers. As such, amenities vary, and the level of service determines the cost of an Uber ride.

Here are a few of Uber’s top service tier options:

  • UberX: The most popular ride option on Uber, which supports up to four passengers.
  • UberPool: It allows riders to share trips with other passengers to cut costs.
  • UberXL: It supports rides for up to six riders, usually in a mini-van or SUV.
  • Uber Comfort: Provides newer model cars with additional legroom to its riders.
  • Uber Select: It’s for people looking for a bit more luxury, often done with European car brands like Mercedes, Audi, and BMW.
  • Uber Green: It offers rides in low-emission, electric, or hybrid vehicles for the more environmentally aware riders.
  • Uber Black SUV: A subcategory of Uber Black, where riders pay extra to ride in a luxury car or SUV.

In addition to these ride options, Uber ensures the ultimate rideshare experience for its passengers through innovative features including:

Ride Scheduling

This feature allows users to plan their trips in advance, eliminating any delays and ensuring your peace of mind.

Ride scheduling allows you to select the time and place you’d like to get picked up, and will notify your Uber driver to ensure they’re on time.

As such, ride scheduling has become a staple among traveling executives and people who live in less populated areas and want to cut down their transport waiting times.

Advanced Safety Features

In addition to safeguards such as providing a driver’s picture, vehicle registration number, and car model, Uber offers advanced safety features such as Trusted Contacts.

Here, you can share your trip details with your contacts, and even set reminders so you never forget to share your trip details with your circle.

This way, your loved ones always know exactly where you are and which driver you’re driving with.

Ride Cost Splitting

This feature allows you to split the cost of your ride with your friends or family. The feature comes in especially handy in ridesharing situations, where you want to split the cost of the ride equally with all other passengers.

How Uber Works for Drivers

Uber is the top ridesharing app in the market and provides millions of drivers with a way to earn extra income, either as a full-time job or a side hustle.

As a job, being an Uber driver is one of the top options available in the gig economy thanks to its flexibility, competitive pay, and full autonomy over when and how many hours you work for.

On average, Uber drivers make $19 an hour, but this figure rises with demand and experience.

Better yet, drivers enjoy instant pay, where they can cash out up to 5 times a day, or have their earnings automatically transferred to their bank account every week.

But before joining the fleet and reaping these perks, new drivers have to meet Uber’s minimum requirements, which include:

  • Attaining the minimum legal age to drive in your region
  • Passing a rigorous background check and driver screening
  • Proof of residency in your city, state, or province
  • At least one year of driving experience
  • A clean driving record with no DUIs
  • A valid car insurance
  • A valid driver’s license

Additionally, your car must pass an inspection to ensure it’s in good working condition and has all the necessary safety features.

But once cleared, you can start ridesharing for Uber through a process that mirrors the ride-hailing process described above but is done through the driver app.

Step 1: Accepting a Ride

When ready to work, log in to the Uber driver app and tap on “Go Online.” The app automatically detects your location and starts matching you with nearby passengers looking for a ride.

You’ll get a notification whenever there’s a new match and will have the option to accept or reject the ride request.

Once you accept a ride request, the app grants you access to the passenger’s name and pickup location.

You can choose between using Uber’s built-in navigation system, or third-party tools like Waze or Google Maps to guide you to the pickup location.

Step 2: The Pickup

As your Uber vehicle approaches the pickup location, the app notifies your passenger that you’re close, and again when you finally arrive.

Ideally, you should see your rider waiting for you at the curb. But if not, you can pull over to the side and wait.

A timer appears on the app telling you how long you’ve waited should you need to cancel the trip, and you’ll receive a cancellation fee.

On UberPool, passengers have two minutes to enter the car, five minutes for UberX, and 15 minutes for Uber Black. The driver app also lets you text or call the passenger before their time runs out.

Once your rider gets into your car, you can use the app to start the trip, which will map out your route.

Step 3: The Ride

There are a few things you need to keep in mind during the trip, namely:

  • Observe all safety rules and traffic laws
  • Always keep your attention on the road
  • Strive to make your riders feel safe

In addition to these things, remember that rideshare driving is a part of the service industry, and being personable is essential to your success.

Keeping your customers happy will increase your chances of earning a tip and a positive rating.

Step 4: The Drop Off

When you get to your passenger’s destination, pull over where it’s safe to drop them off, but don’t end the trip on the driver app until they’re out of the car and the door shuts behind them.

Ending the trip immediately puts you back in the queue for another ride request. It also allows you to rate your rider once the window pops up.

For clarity, here’s a quick video from Uber’s driver learning center to explain the process.

Driver Payments for Uber Drivers

Uber accepts various payment methods, including:

These are typically paid directly through the app. Also, Uber doesn’t accept cash payments, with exceptions for specific regions.

Uber calculates driver pay weekly, such that drivers receive their money once a week through direct deposit, usually on Thursdays. It also offers an instant cash-out option for more frequent withdrawals.

Tips for Uber Drivers

Uber offers some of the most competitive rates in the ridesharing industry. These rates improve with good reviews and happy customers.

Here are a few tips you can implement to boost your riders’ satisfaction, and therefore your earnings.

Go the Extra Mile for Your Riders

Driving for Uber is a customer service business. The happier your riders, the higher your ratings, and ultimately, your earnings through tips.

But to achieve this, you’ll need to provide a service that goes beyond transportation from point A to B.

Pay attention to your riders’ needs and always try to make their trips as pleasant and hassle-free as possible.

For example, you could hold the door open for a passenger or offer to put a rider’s luggage in the trunk.

Accommodate Your Passengers

Some passengers have special requests. Strive to be as accommodating as you can to these requests, within reason — even when you don’t understand them, or find them a little selfish.

Of course, you should never put yourself or your car at risk.

Trust Your Instincts

Whenever your gut tells you that you’re dealing with an unreasonable person, or that you’re in an unsafe situation, don’t hesitate to take action.

It’s okay to pull over and end the trip early if you’re ever worried about your safety in any way. It’s better to be overly cautious than to put yourself in harm’s way.

Wrapping Up

You just had a glimpse into Uber’s inner workings and saw the reasons why it has been so successful.

Indeed, this success has spawned many similar services, including Lyft and Curb. But Uber remains the cream of the crop. This is the case to the point that “Ubering” has become synonymous with ride-hailing in everyday language.

For more information on Uber and the ways you can turn it into a source of income, check out: Uber Driver Tips: 23+ Creative Ways to Make More Money.

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