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Ride-Share with Uber or Lyft as a Side Hustle? It’s Going to Be Expensive!

A Look at the Hidden Costs of Driving!

Photo by Thought Catalog on Unsplash

I was recently in a ride-share (e.g. Uber, Lyft, etc.) when I struck up a conversation with the driver. Being in the business of helping people grow and expand their businesses, I realized many had been lured in by the promise of quick cash not fully understanding the hidden costs involved. 

I mean, the concept sounds great doesn’t it? Drive your car, pick up people, make money! 


Many people drive for popular ride-shares like Uber and Lyft for quick money and as a side hustle. But this side hustle requires a lot of thought and a good understanding of math. If you don’t take the time to think it through, you could end up paying to be part of the program. 

Let’s Explore the Costs…

InsuranceMost ride-share drivers are not aware they need to carry extra automobile ride-share insurance when transporting a passenger. 

This extra insurance can cost a driver up to an extra $20–300 a year. 

Work for yourself or borrow your car out to drive? 

You may have to pay for an umbrella policy to cover general liability or worker’s compensation in the event your contractor/employee gets hurt. 

This extra insurance can run anywhere between $500–1000 a year. 

Vehicle Repair and Maintenance Costs

A full-time driver (30+hours/week) that drives an average of 1,000 to 2,000 miles a week, puts annually additional mileage totaling 52,000-104,000 miles on their car.

Considering most people drive on average 12–15,000 miles a year, drivers need to pay attention to the increased mileage costs associated with driving to truly evaluate if driving as a side-hustle is really worthwhile.

Let’s look at the breakdown of some of the automobile costs:

General Costs, Repair and Maintenance Costs- 

Gas- Driving 1,000 miles a week means a driver will have to spend upwards of $150 a month for gas.

Oil Changes- Most cars recommend an oil change between every 3–5,000 miles. This means if you are driving 1,000–2,000 a week you are likely to need an oil change nearly every month, at cost of $30–50/month this results in a cost of upwards of $600+/year. 

Tires- Extra wear and tear on a car driven at an extra 50–60,000 miles a year means your car will likely need at least one set of tires annually at cost of approximately $600–800/year. Drive more, expect this cost to double. 

Brakes- All of that stopping and going means your brakes are going to need to be replaced more quickly. A cost of approximately $500–600+/year.

Considering Leasing a Car? Think this through! 

Lease Payments/Mileage- The BIGGEST Trap for a Driver

Some ride-share drivers lease their cars. This can be a trap for the unwary. 

Considering most leases have a mileage allowance between 12,000–15,000 miles annually, it is easy to see how after just 4 to 5 short months driving, a driver is likely to hit the mileage allowance and be liable for excess mileage fees.

If your mileage goal is 1,000 a week and you intend to lease a car, expect to pay excess mileage fees of $.15/.30 a mile. 

For example:

If you drive on the low side of 1,000 miles a week or 52,000 a year at a cost of $.15 per excess mile (52,000 miles-15,000 mileage allowance=37,000 miles) that excess mileage of 37,000 miles may potentially cost you an extra $5,550 a year. *Note this is only if your excess mileage rate is $.15/a mileage.

If you are a power driver at 2,000 miles a week or 104,000–expect that number to soar to upwards of $13,350 a year using the same mileage allowance. 

Now, say you get into an automobile accident with your lease and do not have GAP coverage, your out of pocket costs could be higher as you will be responsible for the difference in the value of the car both prior to and post-accident. 

GAP coverage is a must! It helps you if you owe more than what the car is worth to the lender, and will typically pay the difference of the car;s value after an accident so you aren’t out of pocket. 

And to think these costs are just to drive a leased car. 

The Cost of Vehicle Ownership

Now let’s factor the costs if you own your vehicle outright. 

It doesn’t get any better. 

Vehicle ownership is another of the most missed costs when determining whether to be a ride-share driver. Most drivers in the United States finance their cars and do not own them outright. 

This is generally because most people cannot afford to buy a car outright. This is dangerous for someone that doesn’t have good credit or a strong financial position. 

Often when a vehicle is financed it is the sole vehicle used to get a family to and from their jobs. 

If you are

, be prepared for the unintended costs and replacement costs. 

Monthly Payment and Car Replacement Costs

If you are a ride-share driver and plan to use your own car that you finance, you are going to be paying your monthly car payments in addition to all of the other costs less lease expenses listed above. 

This means in addition to your $3–400 a month car payment, you could be shelling out close to an extra $500 a month just to drive your car for a ride-share like Uber or Lyft.

Unless you are racking up tips galore, this means you will need to make at a minimum, $12,000 a year in revenue, just to pay for the cost of your car used to drive for the ride-share. That’s a lot of money for most families. 

Considering driving will be putting on an average of 52,000 miles a year to drive your car full-time, this also means you will likely have to replace your car ever 3 years or at 156,000 miles.  

Here’s Where Knowing Math Helps!

As the average length of a car loan in the US is between 48-72 months or 4-6 years, this means your car loan is likely to be unpaid at the time you will need to replace your car. 

The thought of owing a balance on a car that is no longer able be driven and needing to

replaced with a new one before it is paid off, should make any driver consider if ride-sharing is really worth the cost at the end of the day!

Is It Worthwhile to Drive for a Ride-Share Knowing All of The Information?

Maybe. But the reality is, if you are considering ride-sharing as a side gig, you need to take a holistic view at all of the costs associated with driving. 

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