How much do you make driving for Uber or Lyft?
Winter Ubering
Uber Blog #6
How do you calculate your rideshare earnings? Everyone wants to know what we make. Here are some options to estimate your rideshare income.
Cash
This is the easiest and most important way to know how much you make. Cash is king.
To start, I recommend setting up a separate bank account for Uber or Lyft. Maybe use $100 to open the account and get a debit card. Make sure your Uber and Lyft cashouts go into this account. Then use that money to pay for gas and your other rideshare expenses. Depending on how much you drive, you'll quickly accumulate enough cash to withdraw to your personal bank account.
The next level to this setup is having a specific rideshare credit card and a savings account. Use the savings account to put away taxes and your insurance deductibles. And using a credit card can cut expenses with discounts, cashback, and points.
Tax
There aren't easy ways to calculate taxes. But rest assured, you need to make sure you track how much you may owe in taxes at the end of the year.
My recommendation is to save a percentage of your revenue minus your deductions.
(revenue - deductions) * tax %
$10000 earned in a year - $5000 deductions * 10% = $500 potential tax
Knowing your revenue is easy. It's how much you get paid in total from Uber. They'll send you a tax form at the end of the year.
Deductions are not too hard, but they require some effort on your end. Almost all drivers use the standard mileage deduction, which is $0.585 per mile. This means your car expense is 58.5 cents per mile you drive for rideshare. Track your rideshare miles any way you want; I use my odometer and a spreadsheet. There are many other expenses that you want to track:
cell phone bill,
car washes,
some meals,
entertainment subscriptions,
rideshare equipment like cell phone stand or lights,
supplies, and
software subscriptions
This article isn't tax advice but only a way to know how much you make for rideshare. Contact a professional with your unique tax questions.
Profitability
I enjoy knowing how much I make with rideshare. There are so many great calculators. Knowing my profitability helps me determine if rideshare is worth it compared to other options. It's nice seeing that I make $30 an hour online. But after accounting for all my expenses, I typically make closer to $23.
Rideshare profitability calculation is more complex because it accounts for actual costs, not the $0.585 tax deduction. Meaning you have to estimate how much oil changes, gas, and other car expenses are per mile.
I built this calculator to estimate how much I make each week; it even lets me know my hourly rate and what I might make in a year.
In what ways do you calculate your Uber and Lyft income?