Hello! This is Leah from Love and Blues and I’m going to be sharing with you how to make money with Uber.
My husband started driving Uber recently because we ran into some big financial issues. Needless to say, what was coming in just wasn’t covering what was going out, and we were freaking out a little (okay, a lot.) A friend jokingly suggested he give Uber a shot (because my husband had always said he would NEVER use or drive for Uber), and he decided the need for a little extra money was worth more than his pride. The joke was on the friend, because it’s turned out to be a pretty great side gig. My husband is easily able to make about $100/night (or about $20/hour) with tips, at least on Friday and Saturday nights. And keep in mind, that’s in the Salt Lake City area – so it’s a bigger city, but it’s no Los Angeles by any means.
This extra money has allowed us to pay down our debts and make our financial situation a little less frightening, which by itself is a huge blessing. However, the opportunity to drive with Uber got me thinking about the potential of using it to save for our bigger goals.
Could You Save A Down Payment With Uber In One Year
Namely, for a down payment on a house.
My goal over the next few years is to save at least $10,000 for a down payment on a house. Now I know that’s a fairly small down payment – but it’s huge when your average gross income is under $40,000 per year. So, I wanted to figure out if it would be possible for the average family to save for a down payment of $10,000 on a house by driving with Uber in just one year.
How does it break down?
To save $10,000 in one year, you’d need to make at least an extra $192 per week. If you calculated this strictly as what you earn from driving, you’d need to drive about 10 hours per week (or 5 hours each Friday and Saturday night.) Great! Easy easy. However, you can’t necessarily do it that easily: there are things like taxes and gas expenses you have to factor in. As an Uber driver, you work as an independent contractor. That means you need to do your own taxes.
If you work a regular job in addition to Uber, there’s a good chance you could get away with not taking the taxes out and just deducting them from whatever tax return you get. However, since I’m self-employed and set aside money from my income anyway, we take 20% from each Uber payout and put it into a separate savings account for taxes. So then let’s say you need to make 20% more to actually get $192 per week. That would mean you need to make about $240 per week (or drive about 12 hours per week.)
However, as an independent contractor, you can also deduct your mileage for business. From the moment you leave your driveway to start Ubering to the moment you return home, your mileage is considered business mileage The current standard mileage deduction from the IRS is 54 cents per mile. In an average night, my husband drives about 150 miles, which equals about $81 in tax deductions. So, in theory, what you owe on taxes and the deductions should even out. But since taxes are basically a foreign language to me, I just set the money aside, give the deduction information to an accountant, and let them figure out the specifics for me.
So again: you could totally get away with not setting money aside for taxes. But in my opinion, it’s better to have the money set aside and not need it, than to need it and not have it.
But keep in mind I’m not a tax professional – so don’t take my opinion as gospel. Make sure to check with your own accountant first!
Now, what about gas/depreciation/etc?
This is going to depend on what car you’re driving. We have a 4-door sedan that gets about 25 miles per gallon. If you drive a bigger car, Uber pays you more (and I’m not sure on the specifics of that, because we just have the one), but of course, your gas mileage won’t be as good.
If he drives 150 miles in a night, we end up spending about $15 in gas. So let’s say you set aside 20% for taxes from your Uber income and need $20 in gas. That means that to hit that $192 per week, you need to make about $260 per week (or drive about 13 hours per week.) So basically, you’d have to go out for 5 hours at prime time on Friday and Saturday night, plus 1-2 weekday rush hours.
In addition to your regular fares, both Lyft and Uber often have offers for bonuses when you first sign up. This is sometimes depending on where you live, or just a promo code from a particular business, like Facebook. The bonuses can be anywhere from $100 to several thousands – and either of these would help you get your down payment a lot faster.
So could you save for a down payment on a house in one year with Uber? The answer is definitely yes – if you’re willing to put in the time and you live in an area that’s conducive to it.
Interested in signing up to be an Uber driver? Click here to find out more!
About the Author:
Leah is a blogger at Love and Blues, where she writes about strengthening first responder marriages and their families. When she’s not busy writing, she’s chasing around her very active one-year-old little boy, who just adores his LEO daddy. In her spare time, she can be found reading, running, knitting, working in the garden, or very occasionally, baking. She lives in beautiful Salt Lake City with her family.