This post is sponsored by SherpaShare
Thousands of on-demand workers drive for rideshare platforms on a daily basis. Uber alone recruits 50,000 drivers every month!
For most folks, it’s easy to sign up and get started. As long as they have a smartphone to download the app, a car, a valid driver’s license, insurance, and a few more minimum requirements just about anyone can get approved and start making money right away.
Rideshare driving is great for those who need to supplement income, work flexible hours or improve their work-life balance. Being their own boss means drivers work whenever they want. Single parents and college students can make money while taking care of other responsibilities. Entrepreneurs can pursue their passion and work around building their dream jobs. It seems like a win-win.
However, at SherpaShare, we hear first-hand from thousands of our members each year about the hidden costs of rideshare driving including wear and tear on cars and other related expenses. A survey conducted in January 2018 revealed that 75% of SherpaShare members own their vehicles, so we wanted to take a more in-depth look at the costs and benefits of owning vs. renting a car for on-demand work to see if renting could lift some of the financial burdens of driving for a living. And the findings are surprising!
What we’ve found is that while most rideshare drivers own their cars, the costs might (literally) outweigh the benefits. Here’s the breakdown:
Car Ownership
Financial Requirements
What do we mean by financial requirements? Uber pays the driver, right?
That’s correct, but there are still things that drivers must pay for out of pocket. Most people think that fueling their vehicles is the only cost, but they go far beyond that.
First, drivers must keep their cars clean at all times. This means paying for car washes or busting out the vacuum and hose. It’s important to note that if a passenger damages the inside of a car, Uber charges the rider and reimburses the driver.
Then, there’s general maintenance to ensure cars meet rideshare platform standards. Rideshare cars need to be in excellent condition at all times, so to keep vehicles in satisfactory condition, maintenance and repairs need to be budgeted and paid for on a regular basis.
Since drivers put extra miles on their cars, oil changes and scheduled services occur often. For example, oil changes are generally done every 5,000 miles or three months, whichever comes first. During regular use, a car owner might go three months without visiting a lube shop. For a rideshare driver, a car requires oil changes frequently.
Oil changes aren’t the only thing affected by high mileage. Brakes wear out. Windshield wipers, chipped windows, and lights are other victims of using a personal vehicle at a higher rate.
High mileage also means car warranties won’t last as long either. A 30,000-mile warranty, which could last five years under normal driving conditions, might run out in less than one year for fulltime drivers!
Car Insurance
Keeping vehicles insured isn’t cheap, and it could get more expensive if rideshare drivers are diligent about reviewing and comparing policies.
Rates could go up if a driver’s insurance company finds out that the car is used for commercial purposes. If they find out due to an accident, and the driver didn’t previously disclose the vehicles use for Uber or Lyft, they could drop the driver outright.
Lost Wages & Stress
When a personal vehicle needs repairs, drivers can’t work. A small accident or damage caused by a passenger could sideline a driver for days or weeks while insurance companies decide whether to accept or reject claim and schedule repairs.
Even though Uber and Lyft reimburse drivers if a passenger rips a seat, getting them fixed is time off the road, where money is lost. That’s why if drivers to choose to use a personal vehicle good insurance and a budget for repairs is critical for maintaining consistent work hours.
Depreciation
Unlike most assets, cars lose value over time. Depreciation is often overlooked but is also the most significant expense of car ownership. However, there are strategies to manage the decline in value, which should be considered.
Benefits
There are a few benefits to using a personal car for ridesharing.
There are tax benefits for the commercial use of a vehicle. 1099 workers can track and claim vehicle mileage using an app like SherpaShare, which could amount to thousands of dollars in savings when taxes are filed with the IRS.
Another benefit of car ownership is familiarity with the car and feeling more comfortable inside of it. Lastly, car owners may have some equity in their car and can choose to sell it at any time to put some cash in their pockets.
Rental Cars
Now let’s dive into what renting a car from HyreCar to drive for Uber, and Lyft looks like.
No Long-Term Commitments
Renting a car from most companies requires people to sign their lives away. With HyreCar, there’s no long-term commitment, which is a huge plus! Just sign into your account, click a few buttons, pick a car, and members are ready to drive.
Try Ridesharing Out
Are you still on the fence about ridesharing? Many people want to try driving out, but their car might not meet the minimum requirements, or they might not have a car at all. Renting a vehicle solves these two problems.
You can rent a car for HyreCar for a few days and see if you like working for Uber or Lyft. If you enjoy it, rent out a car on a weekly basis and make money. If not, you return the car to its owner, no questions asked.
Free-Market Prices
The owners of the rental cars dictate the marketplace. Each person that puts their cars up for rent competes for your business, keeping prices down and availability up. In Los Angeles, there are dozens of cars under $40 a day!
Most people that request cars on HyreCar’s website put in requests for up to five cars. The first owner that accepts the request rents out the car, encouraging speedy turn-around times.
And there are tax benefits for those that choose rent cars too. Remember the tax-deductible mileage we mentioned earlier? Well, renters won’t qualify for the mileage deduction since the car someone else’s, but renters can deduct hundreds of expenses to keep their tax bills low!
Insurance
Renters don’t have to worry about selecting an insurance policy or the insurance company dropping coverage or raising rates due to rideshare driving. HyreCar insurance covers renters you in case of an accident. If a driver doesn’t have insurance or happens to be under-insured, they’ll have it covered. What a relief!
Cars for Every Tier
Uber offers different tiers for passenger experience. Uber X is standard cars, whereas Select consists of luxury rides, such as Audis and Mercedes.
XL is an option for parties of up to six people. Options above X cost more, meaning that drivers benefit from higher fares. The problem is that a lot of people don’t drive luxury cars or SUVs.
Renting a car with HyreCar gives drivers the option to pick up passengers that want the luxury experience and reap the bigger paychecks. Drivers can toggle between the tiers and determine what fits their driving style and earnings goals.
Maximizing Profits
Drivers keep more of the money they make by cutting out the maintenance costs and insurance companies and focusing on smart driving.
The SherpaShare app is another way to improve earnings. The app assists drivers with finding the most profitable routes, hotspots where you’ll get more rides, and tracks hour by hour profit for optimal planning. Plans run for as little as .20 cents a day, making it the best value in the business.
Renting a Car Can Improve Profits and Reduce Stress
If drivers rent a car for $40 a day and pay for gas, at most, it would take two and a half rides to cover the cost of doing business. Afterward, everything else is profit. Up-front costs are set in stone and limited to the day worked.
Costs can continue well into the future when using a personal vehicle. Even if folks drive for a ride-sharing company for a year and then stop, the mileage put on a car will cost money in the long-term.
For all of those reasons renting a car is an extremely desirable option for rideshare drivers!
If you would like to make money by renting a vehicle for rideshare driving, find out everything you need to know here and sign up today! Get SherpaShare now to help you plan optimal routes with exclusive driver Pro Tools and keep your expenses safe in the cloud.
Click HERE to sign up for a free 44-day trial with SherpaShare!
As a car owner I can rent my car to you through this service and pocket about $1,000 per month. (This is their own offer posted on another part of their website) This means that they will require to make a profit as a middleman. So the cost for you to rent a car would cost about $300 or more. Write offs mean nothing without revenue. I am a retired businessman and I drive for Lyft only. (Used to drive for Uber but feel that they are a bit of an embarrassment to be associated with) This time of the year in Tucson working days at about 30 hours last week I grossed $300! This blog is correct. It costs a lit to own your own car. But how much would I profit if I rented a vehicle? Again folks: DO THE MATH!
Do you rent cars in Houston ?
We do! Please visit https://app.www.hyrecar.com/partner to create an account and begin listing your vehicle. If you need any assistance after you sign up, feel free to email partner@www.hyrecar.com or give us a call at (213) 269-5330.
I rented frum exoress drive and hyre car. Though circumstances can all be different and mine definetly were, there is a short term window I would advise to drivers. I personally would say it’s not something for long term. To me paying out $1000 to over $1400 a month just to rent plus around 800 a month in gas is not gonna benefit for long. Express drive is ly ft only is around $250 a week coming straight out of your earnings each week for the first $250 in rides given so prepare each week to have enough gas money on hand until your weekly rental fee is met. Then hyre car you pay in advance with a minimum of 2 day up front rental fee. Ok it’s not only the $25 and up a day rental charged there’s the extra fees and insurance. I was lucky and found the cheapest at $25 plus other fees a day which was around aprrix $350 a week (remember that was the cheapest) totalling approx $1400 a month in rental plus the $800 in gas that’s $2200 a month. Better be driving 40 plus hours a week of want to make over that. Then with express drive there’s the $1000 deductible if accident occurs. If other party at fault has no insurance that’s right you have to pay that $1000 and cant get another car until it’s paid. They will not even consider taking it out of your pay each week like they do the rental fee. So your out of luck if you don’t have that $$$ on hand. I got hit and they kept going then 23 hours later no joke got hit by a deer with a passenger in the car. Now since i or no one else was able to get license of the hit and run and pretty sure the deer wouldn’t have had insurance (lololo) I got hit with double the deductible and not even my car and both incidents were so minimal damage barely could see it all.
Upside every thing I mentioned is tax deductible downside I spent over $19000 on just rental fees and dont have a car at the end of it all and no money saved and barely got by. I did survive at least but did I get to live? Well driving was my only social life literally. Thank the good Lord I love my job. Except now I’m in need of a car and want my own but no one gives loans that I can find to rideshare workers. One car lot told me to go get a real job and come back with real pay stubs. Hey didn’t know I was working a fake job did you? This is a great industry if you are into customer service and I’ve been in that area of work for 30 years and love it. Please if you are not about customer service cause I hear awful stories from passengers don’t get in the industry. Back to rental vs owning. For me I’d rather have a regular car payment 250 to 400 a month or less if one is lucky or goes used car then then to pay upwards over $1400 a month to rent but not ever owning it. Yes I’ll pay my own insurance and maintenance but it’ll be my car still at the end of the day and won’t be stuck without a car
It’s all in perspective and timing. The first year I rented actually saved my life literally and was totally worth it for me. There is a long story why and wont go into it but when I say literally saved my life I literally mean saved my life. So circumstances are all different but there comes a time it has to not benefit at all. Just saying. God bless
You fail to mention that Hyrecar only provides the state minimum in liability protection; leaving the driver on the hook for the rest.
Do you rent cars in Jacksonville ?
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Thanks for sharing.