Working as an Uber driver has lots of benefits, but at the end of the day, the goal is to make extra money. You might be aiming to earn some extra money on the side as a part-time driver, or maybe you’re thinking about switching to Uber from your full-time job.
Whatever the case, money is something that prospective Uber drivers are especially curious about. There’s the usual question: “How much do Uber drivers make?” We covered that at length in this guide, but here we want to address another common question: “What is the Uber driver salary?”
There seems to be some confusion surrounding this topic, so we’re going to set the record straight. We’ll take a look at everything you need to know about the salary and benefits of driving with Uber, as well as what the average Uber driver makes in a year.
- Does Uber Pay Its Drivers a Salary?
- Do Uber Drivers Have Benefits?
- Uber Driver Average Yearly Earnings
- Uber Driver Salary FAQ
Does Uber Pay Its Drivers a Salary?
Before we go any further, let’s get the obvious question out of the way: Does Uber pay its drivers a salary? The answer is a straightforward, “No.” Uber drivers are independent contractors. This means that they are not employees of Uber. Because of this, Uber does not have to pay them a salary or hourly wage. In fact, minimum wage laws don’t apply to independent contractors.
If you think this seems unfair, you’re not alone. New York City has passed legislation to require Uber (and Lyft) to pay its drivers a minimum wage. Depending on your perspective, you may see this as either a victory for workers’ rights or excessive government regulation of private enterprise.
The arguments for paying drivers at least a minimum wage make sense. Though on the other hand, ridesharing companies like Uber argue that requiring them to pay drivers a minimum hourly wage harms the platform as a whole.
The extra money that Uber has to pay drivers must come from somewhere, and that likely means fare increases for riders. From Uber’s perspective, this will decrease demand for the service and thus lower the number of rides (and earnings) that drivers can get.
Here’s how Uber CEO Dara Khosrowshahi put it in a statement to the Chicago Sun-Times:
“‘A driver gets on Uber because they can drive whenever they want,’ Khosrowshahi, who is Uber’s CEO, told us. ‘They are their own bosses. They can drive for two hours. They can drive for 50 hours.’”
Overall, this is a complicated issue, and it’s still too early to say how the new rules in NYC will affect the industry or whether or not other cities will adopt similar rules. For now, however, the majority of Uber drivers around the United States and world continue to earn a percentage of the fares that riders pay, plus tips and bonuses.
Do Uber Drivers Have Benefits?
Along with discussions of an hourly wage and salary, the question of benefits for Uber drivers often comes up. Once again, Uber appears to fall short in this area compared to other companies. Uber doesn’t offer retirement plans, health insurance, paid sick leave, or paid family leave for drivers.
Depending on your perspective, this may or may not make sense. If you’re driving for Uber on top of your day job, then the idea of Uber offering you benefits may seem unnecessary.
But you need to remember that some drivers use Uber (or other gig economy apps) as their sole source of income. These drivers don’t have the luxury of receiving health insurance from their day job. Uber driving is their day job.
So what is Uber doing to address this issue? The company does offer limited benefits to drivers. To help with vehicle maintenance, Uber drivers can get 15 percent off at Firestone, Maaco, Meineke, Midas, Jiffy Lube, Sears Auto Center, Valvoline, and Advance Auto Parts. Uber also states that they’re “working with AT&T, Sprint, and Verizon to save you [Uber drivers] 8–22 percent on your monthly bill.”
Additionally, Uber does offer some assistance with healthcare. The company has partnered with Stride Health, an online health insurance broker that helps independent contractors find the health insurance and other insurance products they need.
While the service that Stride provides is free, we should note that Uber does nothing to help subsidize the cost of health insurance for its drivers. Drivers are still responsible for paying all their plan’s premiums in full. Therefore, while the partnership with Stride is a nice gesture, it doesn’t amount to much in the way of health insurance assistance for Uber drivers.
Uber (and some drivers) would argue that while the company may not offer traditional benefits — like retirement plans and health insurance — working as an Uber driver does come with other, intangible benefits.
To start with, Uber drivers have the flexibility to set their own hours. If you want to drive only at night, you can do that. Prefer early mornings? No problem. Want to drive for 12 hours straight? You’re welcome to, though the company will make you take a 6-hour break afterwards for safety reasons.
There’s also the nature of the work itself. When you drive for Uber, you aren’t stuck in an office, and you don’t have to deal with a boss. You get to meet a variety of people and see different parts of your city. Compared to a desk job, this can be a dream for many people.
Uber Driver Average Yearly Earnings
Uber drivers may not earn a salary in the technical sense, but for many people, a “salary” is just another way of saying how much someone earns in a year. So how much do Uber drivers earn each year on average? That depends on who you ask.
According to data from Glassdoor, the average Uber driver earns $32K per year. That works out to around $2,667 per month, or $16 per hour (assuming that a driver works 40 hours per week). Of course, this math is heavily simplified.
After all, most Uber drivers don’t earn a set amount per hour or even per month. Pay can fluctuate based on demand for rides and the amount of time the driver has to put in. Plus, pay can vary quite a bit from city to city. Drivers in large cities such as Chicago, New York City, and Los Angeles tend to earn more than drivers in smaller cities like Louisville, Kansas City, and Indianapolis.
To get a more accurate picture of what Uber drivers earn, let’s look at some data from Ridester’s 2018 Independent Driver Earnings Survey (RIDES). This survey is based on responses from 2,625 drivers across the United States. According to this survey, the national average earnings for an UberX driver are $14.22 per hour.
This is the median earning amount after we include tips and deduct the commission that Uber takes. Extrapolating from this hourly amount, we can see that the average “salary” for an Uber driver would be $29,577.60 per year (assuming a driver works 40 hours per week, 52 weeks per year).
This number does not take into account Uber driver expenses or taxes. These are important to consider since Uber drivers are responsible for filing and paying all their own taxes, as well as covering all their own vehicle expenses. This number also assumes that a driver never takes any time off, which runs counter to the idea of Uber as a flexible work platform.
Still you should now have a fairly accurate picture of what you can expect to earn as an Uber driver on average. Your specific situation will differ to some degree, especially if you implement our tips for earning more as an Uber driver.
Uber Driver Salary FAQ
To wrap up this guide, here are some answers to common questions related to Uber driver salaries:
Do Lyft drivers earn a salary?
No, they do not. Like Uber drivers, Lyft drivers are independent contractors who do not draw a salary or receive any kind of set hourly wage.
Do Uber Eats drivers earn a salary?
Uber Eats drivers earn a fee for each delivery they complete. Like Uber drivers, they don’t get paid a salary.
Does Uber offer salaried jobs?
Absolutely. Uber has a variety of salaried, full-time jobs with competitive benefits. You can learn more on the Uber Careers page. The key thing to understand is that these are not driving jobs. They’re generally corporate office jobs that require a college degree, relevant experience, and a traditional job application and interview process.
Uber Drivers Do Not Receive a Salary
Uber is just one prominent example of the growing gig economy. While the media has placed a lot of attention on the way Uber compensates its drivers, the same issues apply when discussing courier apps like Postmates or grocery delivery apps like Instacart.
These apps offer a low-barrier way to make some extra money. How they should handle the compensation and benefits of full-time gig workers is an issue that companies, governments, and private citizens are still working to resolve.