# A few questions about uber driver earnings



## Chris Gilman (Jul 5, 2014)

Greetings all.

My friend and I were discussing signing up for uberx in Atlanta and were trying to do the math on how much a driver can earn. Two of the biggest unanswered questions we had were:

What is the average miles driven per trip?
And
What is the average time spent per trip?

After reading a few Internet posts we figured that it takes about 1 mile of uncompensated driving to get 2 miles of compensated driving. This would be where the uber driver is driving to pick up a passenger. Does this sound about right?

We would like to get it down to how much an uber driver is compensated on an average per mile basis to try to determine how many miles it will be necessary to drive to hit certain benchmarks (like $1000 per week or $50k per year).

We are also interested in calculating an hourly rate. 

So far with my assumptions I figured a driver would have to drive 
700-800 miles to make $1000 
35000-40000 to make $50k

Which would give an average hourly rate of $25 per hour on the low end and $40 per hour on the high end.

Does this sound accurate?


Thanks


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## rtaatl (Jul 3, 2014)

When I did UberX here in Atlanta my average trip was about 4-8 miles and I'd say about 20 minutes on a trip, not including time to travel to pickup location. Every now and then I might get lucky with either an airport run (usually early Sunday/Monday mornings) or a trip from downtown/midtown to Cumberland or Dunwoody area...those trips on X are about $26. The thing you need to factor is downtime in between trips. I do believe the ATL market is over saturated with UberX drivers now. Even in the so-called hot zones it could take me 30 minutes or more sometimes between calls. I never felt like driving around...big waste of gas in my opinion trying to chase the hot zones because they constantly change all the time at any moment.


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## grams777 (Jun 13, 2014)

rtaatl said:


> When I did UberX here in Atlanta my average trip was about 4-8 miles and I'd say about 20 minutes on a trip, not including time to travel to pickup location. Every now and then I might get lucky with either an airport run (usually early Sunday/Monday mornings) or a trip from downtown/midtown to Cumberland or Dunwoody area...those trips on X are about $26. The thing you need to factor is downtime in between trips. I do believe the ATL market is over saturated with UberX drivers now. Even in the so-called hot zones it could take me 30 minutes or more sometimes between calls. I never felt like driving around...big waste of gas in my opinion trying to chase the hot zones because they constantly change all the time at any moment.


That's a good point. One of the problems I have is needing to burn gas driving around between rides. But for me, I'm not chasing passengers so much as getting away from a glob of 20 other drivers in a small area. The over-saturation of drivers obviously causes the available number of rides available to decrease. Bit it also causes your gas expense to increase. If I'm going to have any hope of getting more than 1-2 rides per hour, I usually have to drive awhile in between trips.


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## rtaatl (Jul 3, 2014)

I never installed the primary Uber app to see where everyone else is...guess that might be a good idea, or how about a better one where they put everyone's location in the driver app. Don't see why the tech geeks haven't thought of that one yet.


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## Rboney88 (Jul 2, 2014)

In boston in my first 3 days of doing it I did 130 miles (7.5hours) day one (including from home to downtown boston and back home when done. Which is 13 miles one way). Day 2 110 miles (8.5 hours) and day 3 250 miles (12 hours). In those 3 days I made about $830 without ubers cut being taken out. So to make another $170-200 (which I average in a 7.5-8.5 hour night$ about 600-700 miles over 4 days. That's to make apx. $1000 before ubers 20%. In my 2010 camry se v6 it's about $100-150 in gas? And that's only cuz I fill up every day before starting (usually from 1/4-1/2 a tank) *things you learn from a year as a limo driver*

All this includes sitting time, driving around to try and get rides to pop up, etc.


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## Chris Gilman (Jul 5, 2014)

What about taxes on uberx earnings? Are uberx earnings claimed as regular earned income or are the claimed as business income on schedule c?

Also what about the mileage the IRS allows you to deduct? My understanding is that you can deduct 56 cents for every mile you drive as an itemized deduction on schedule A. If you drive 700-800 miles per week for 50 weeks out the the year that is 35,000 to 40,000 per year and your deduction could be as high as $22,400!!! If that is true and you fall into the 25% tax bracket it could lower your tax liability by as much as $5600. Is that correct?


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## Rboney88 (Jul 2, 2014)

I believe that's correct but I believe the it's bases gas, mileage, and wear and tear on the size of the vehicle. My camry I base on .3394 x miles driven for the day start to finish. As far as what it's filed under I believe it's a 1099 of some sort relating to self employment (don't quote me on that though). There's an IRS "how to" type thing that shows it


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## Just Some Guy (Jun 10, 2014)

Chris Gilman said:


> What about taxes on uberx earnings? Are uberx earnings claimed as regular earned income or are the claimed as business income on schedule c?
> 
> Also what about the mileage the IRS allows you to deduct? My understanding is that you can deduct 56 cents for every mile you drive as an itemized deduction on schedule A. If you drive 700-800 miles per week for 50 weeks out the the year that is 35,000 to 40,000 per year and your deduction could be as high as $22,400!!! If that is true and you fall into the 25% tax bracket it could lower your tax liability by as much as $5600. Is that correct?


Mileage for business is an _"above the line deduction"_, meaning it's subtracted in full from your income _before_ your Adjusted Gross Income is calculated, instead of after like other deductions (eg fuel, cleaning, and maintenance costs).


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## Jeeves (Apr 10, 2014)

rtaatl said:


> I never installed the primary Uber app to see where everyone else is...guess that might be a good idea, or how about a better one where they put everyone's location in the driver app. Don't see why the tech geeks haven't thought of that one yet.


They have chosen not to include it.


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## grams777 (Jun 13, 2014)

Jeeves said:


> They have chosen not to include it.


Lyft does it. So I understand why Uber would not choose to include it. You would probably pass out if you saw the driver over saturation.


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## ElectroFuzz (Jun 10, 2014)

grams777 said:


> Lyft does it. So I understand why Uber would not choose to include it. You would probably pass out if you saw the driver over saturation.


It would be one giant black ball of cars all over the city.


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## Sydney Uber (Apr 15, 2014)

The Cars that ate Paris - an Aussie Film we can be very proud of - but we're not!


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## Oc_DriverX (Apr 29, 2014)

Chris Gilman said:


> Greetings all.
> [...]
> 
> After reading a few Internet posts we figured that it takes about 1 mile of uncompensated driving to get 2 miles of compensated driving. This would be where the uber driver is driving to pick up a passenger. Does this sound about right?
> ...


I drive in Orange County, CA which is much more suburban than Atlanta, and does not have a centralized downtown area. So, take this as you will. The absolute best revenue miles as a percent of total miles driven in a shift I have ever done was 67.2%.

It is tougher to give you an average because I look at my driving in two different ways. There are the shifts on Friday and Saturday nights, where I plan to go out with the express idea of staying out a long time and I know there will be a volume of rides. The other type of driving is where I sit at home with the app on and wait for a ping, or if I head off to the store and have the app on and see if I get pinged. These time periods are during the day midweek. This latter category tends to have a lot more variance and usually the ride(s) are not as "connected", meaning that sometimes I end up heading home after one trip.

For a Friday or Saturday evening to late night I would guess the average is closer to 55% of the miles as revenue. For the weekday day time hours I think the average is less then 50%.

I see that your per mile rate is higher than OC, but with a lower time rate. My gut feeling that $40/hr is not doable unless you only work July 4th and New Year's Eve, but I could be wrong.

Good luck with your decision. And, if you see numbers posted in an Uber Craigslist help wanted ad, severely discount them!


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## Oc_DriverX (Apr 29, 2014)

Just Some Guy said:


> Mileage for business is an _"above the line deduction"_, meaning it's subtracted in full from your income _before_ your Adjusted Gross Income is calculated, instead of after like other deductions (eg fuel, cleaning, and maintenance costs).


Disclaimer: I admit that I am not an accountant.

I don't understand your statement. Would not all Uber related expenses be deducted from your gross income to arrive at your net income (Schedule C?). Then this net income would be brought to your 1040 line 12 and used to calculate your AGI?


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## SgtMurphy (Apr 28, 2014)

I think I spend 30% of Gross on gas. UberXL, got a 6 Cylinder engine in a vehicle i'm loathe to even say what it is because I don't want to expose myself to some Uber****er monitoring the site. The thought of getting my money taken by a 87 Lb. Hipster working from home ****ing over workers in the streets make SgtMurphy wanna go Loco...
I've had to work so ****ing hard with a lot of luck to eek out 12-18/Hour, little more on weekends. It's depressing, but since I can go 24 hours on a shift if neCESSARy, I'm still out there grinding.


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## Just Some Guy (Jun 10, 2014)

Oc_DriverX said:


> Disclaimer: I admit that I am not an accountant.
> 
> I don't understand your statement. Would not all Uber related expenses be deducted from your gross income to arrive at your net income (Schedule C?). Then this net income would be brought to your 1040 line 12 and used to calculate your AGI?


http://www.irs.com/articles/overview-tax-deductions


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## Oc_DriverX (Apr 29, 2014)

Just Some Guy said:


> http://www.irs.com/articles/overview-tax-deductions


I believe that mileage deductions mentioned in the article you cited refer to mileage deductions related to a salaried job.

Since Uber-ing is a business, then all business deductions would be taken before you arrive at your net income (or loss). Since it is your net income that is listed on line 12, then all of your Uber expenses are deducted before arriving at your AGI.

Let's say that you drove 1,000 miles and grossed $1,500 (after Uber Commissions). Lets say in addition that you spent $20 on water and $50 on cleaning the car.

1,500 - Income
560 - Mileage expense (gas, depreciation, maintenance at $.56/mile)
20 - Water
50 - Cleaning
============
870 - Net Income

$870 would be reported and contribute to your AGI. That is the advantage to having your own business; all of your legitimate business expenses can be deducted. Some people may abuse the expenses. If you are a salaried employee, then you are more limited in what you can write off.


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## Just Some Guy (Jun 10, 2014)

Oc_DriverX said:


> I believe that mileage deductions mentioned in the article you cited refer to mileage deductions related to a salaried job.
> 
> Since Uber-ing is a business, then all business deductions would be taken before you arrive at your net income (or loss). Since it is your net income that is listed on line 12, then all of your Uber expenses are deducted before arriving at your AGI.
> 
> ...


Accounting isn't my thing, that's why I pay one. I just send him my receipts and mileage logs electronically every day via an app on my phone.


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## ElectroFuzz (Jun 10, 2014)

S Corporation, shouldn't be too hard to setup.
More deductions, more protection from personal lawsuits.


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## Chris Gilman (Jul 5, 2014)

Oc_DriverX said:


> I believe that mileage deductions mentioned in the article you cited refer to mileage deductions related to a salaried job.
> 
> Since Uber-ing is a business, then all business deductions would be taken before you arrive at your net income (or loss). Since it is your net income that is listed on line 12, then all of your Uber expenses are deducted before arriving at your AGI.
> 
> ...


Thanks for the response. OK so tell me if I'm straight here...

Based on the above figures you gave if I worked 50 weeks out of the year at $1500 per week I would make $75k
But if I deduct a average of 560 per week in mileage and $70 or so per week on other job related expenses I would only claim $870 per week or $43,500 per year towards my AGI
Assuming I am filing single with no dependents here is a breakdown of my tax liability for 2014:










So for total annual income of $75k my average tax rate would only be 3956/75000 ~ 5.2% Right?


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## Chris Gilman (Jul 5, 2014)

ElectroFuzz said:


> S Corporation, shouldn't be too hard to setup.
> More deductions, more protection from personal lawsuits.


What other kinds of deductions would an S corp provide?


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## ElectroFuzz (Jun 10, 2014)

Chris Gilman said:


> What other kinds of deductions would an S corp provide?


More info here:
https://turbotax.intuit.com/tax-too...duce-Your-Self-Employment-Taxes/INF22938.html


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## Daemoness (Aug 27, 2014)

If you have another side business, especially if you do it with another person, you might consider a c corp (requires two shareholders). C corps are much less likely to trigger an audit, and you can pay yourself virtually nothing in wages, and use all the other deductions available to you, including health care premiums. (a group requires a minimum of two people). My small c corp has a 401k and a payroll service that does my payroll. (monthly fee is involved) This would only make sense if you had another concern going with another person you trust. The advantage is, I can just hop onto surepayroll and write myself a check with everything taken care of. I can change the amount going onto my 401k on the fly, and the company can match my contribution if I decide to do that. 401ks with company match can put up to 45000 a year toward retirement, all tax deductible.


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