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Sunday, February 5, 2023

How to Become an Uber Driver: A Step by Step Guide

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Many Americans make their living by driving. Many professional drivers are truck drivers; however, using your own car to drive people and products is a career venture that has grown rapidly. With companies like Uber, almost anyone can use their car to make money as a personal driver. For most people, the requirements to become an Uber driver are not difficult to meet. However, like most jobs that are part of the gig economy, there are some key things you should be aware of about driving for Uber, which we’ll discuss here.

Key Takeaways

  • All Uber drivers must meet requirements regarding age, driver’s license status, and driving experience.
  • When applying to become an Uber driver, you’ll need to pass a driver screening which includes a review of your driving history and criminal record.
  • You’ll need to show your proof of residency along with proof of auto insurance and car registration.
  • Your car will need to meet certain requirements regarding the age of the car, the size of the car, and the condition.
  • The type of car insurance coverage you’ll need varies by state; while Uber does offer coverage, it is limited to only when the driver is logged into the app and driving customers.

Becoming an Uber Driver: Where to Start 

Before you get too invested in the Uber process, start by filling out the application on Uber’s website. Below are the requirements, as of Aug. 14, 2020, for drivers in the United States. Be aware that different countries and some cities and states within the U.S. may have different requirements or regulations.

Minimum Requirements

These are the minimum requirements you must meet before you can drive with Uber:

  • You must meet the minimum age to drive in your city
  • You must have at least one year of licensed driving experience in the U.S. (three years if you are under 23 years old)
  • You must have a valid U.S. driver’s license
  • You must use an eligible four-door vehicle

Vehicle requirements vary by region. Uber will tell you what is required in your region when you apply.

Documents You Will Need

You will need to share the following documents with Uber:

  • A valid U.S. driver’s license
  • Proof of residency in your city, state, or province
  • Proof of auto insurance and car registration
  • Driver profile photo (cannot be driver’s license photo)

Information for Driver Screening

Uber will require you to complete an online screening to review your driving record and criminal history. Uber will need your Social Security number (SSN) to perform the screening and for tax purposes as well.

If you recently moved to a new state, you might be required to submit extra information to verify your driving history. Be sure to have your old state’s driver’s license and insurance on hand.

What Kind of Insurance Do I Need for Uber?

The type of car insurance coverage you need depends on your state. Uber does offer coverage, but only when you are logged into their app and driving customers. When you’re offline or the driver app is off, your personal car insurance company and coverages will apply.

When you are logged on and waiting for a driver request, Uber’s insurance for a covered accident covers “third-party liability if your personal auto insurance doesn’t apply.” The coverage includes:

  • $50,000 in bodily injury per person
  • $100,000 in bodily injury per accident
  • $25,000 in property damage per accident

When you are driving a passenger or are en route, Uber’s insurance covers more in the case of a covered accident, including:

  • Third-party liability insurance with a $1 million limit
  • Uninsured/underinsured motorist bodily injury (limits vary by state)
  • Contingent comprehensive and collision coverage with $1,000 deductible (only for drivers with personal comprehensive and collision coverage)

What Kind of Car Do I Need to Join Uber?

Each city has its own regulations for vehicles and Uber will let you know what your city’s regulations are after you sign up to drive. Depending on the city you live in, your vehicle must be 15 model years old or newer. Typically, nicer or busier cities require you to drive a more recent model. The vehicle also needs to be a four-door sedan that seats four or more passengers, not including the driver. The vehicle must not have a salvaged, reconstructed, or rebuilt title or be a painted taxi.

There are other tiers of Uber, including Uber XL and Uber Black, which have additional vehicle requirements. For example, an Uber XL driver must have a vehicle that seats six or more, and an Uber Black driver must have a luxury class vehicle within a certain age range.

If you do not have a car that meets Uber’s requirements, you can consider buying a used vehicle that qualifies. If you buy a new car for your Uber position, be aware that you will be putting a lot of wear and tear on the car. Depending on your budget and the amount of Uber driving you plan on doing, a used car might be a better option.

You can also research the possibility of leasing a car, although it is wise to know the mileage limitations before you sign the lease. Additionally, Uber has partnered with car rental and leasing companies that offer discounts and deals to Uber drivers.

How Much Money Will You Make?

Most drivers will make about $10-$20 per hour after accounting for expenses such as gas and car maintenance. Uber sometimes offers cash bonuses when you apply to be a driver. Uber has also been known to offer up to $500 to Lyft drivers to join Uber. Harry Campbell from TheRideShareGuy.com says, “There’s plenty of earning opportunity as an Uber driver, but you can’t just flip on the app and expect to make a ton of money. You have to be willing to try new places, new times, and basically, go above and beyond what other drivers are doing.”

Another way to maximize your earnings is to drive a cost-efficient car. Driving a hybrid vehicle can save you up to $200 a month on gas, which will then boost your earnings. Other ways to make more include driving during a surge, which is when Uber charges riders peak pricing due to the lack of available drivers in a certain area at a certain time, or for rides in a populated city. Uber offers additional ways to earn by making food deliveries with the Uber Eats app.

How Do Uber Drivers Pay Taxes?

As an Uber driver, you will be considered an independent contractor. At the end of the year, you will receive a 1099 form, and you will have to set aside a percentage of earnings to cover taxes. You may be able to write off job-related expenses, such as miles, gas, and more. Be sure to keep a detailed log of your miles and expenses. Talk with a certified public accountant (CPA) to get a better idea of what can be written off when you file.

In 2019, California enacted Assembly Bill 5 (AB5) which requires many independent contractors, including rideshare drivers, to be classified as employees. While companies like Uber and Lyft have opposed these changes, some states are considering enacting similar legislation. This legislation impacts how taxes are paid and is intended to give workers access to benefits such as workers comp, unemployment, and health insurance. Be sure to review your state and local government websites to see which laws apply in your area.

What Costs Does Uber Cover?

As an independent contractor, you are responsible for all of your gas costs, car repair and maintenance costs, and any other car-related expenses. Uber will cover cleaning costs if a rider spills something or vomits in your car. It is a good idea to invest in a dashboard camera to protect yourself against abusive riders and incidents.

The Bottom Line

Is driving for Uber right for you? In certain states and cities, Uber offers a flexible way to earn money. As the driver, you decide how much and which hours you drive. You can easily work for Uber as a part-time or full-time business, or fit it into your school or existing work schedule.

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