The Hidden Costs of Being an Uber Driver
Becoming an Uber driver might sound like a dream come true for someone who likes driving and wants to make a bit of money on the side, but before you take the plunge and decide to chauffeur people around in your free time, you might want to consider the hidden costs of being an Uber driver.
There are numerous extra costs that come from the fact that as an Uber driver, you are not an employee but an independent contractor, which means you must pay for your own operating costs. That includes payments for your own car, fuel, insurance, and maintenance.
Speaking of insurance, you’ll also have to make sure it covers you when using your car for commercial purposes rather than just for personal use. Odds are, you’ll have to upgrade your plan.
Uber also takes a cut out of your paycheck, anywhere between 5% and 20%, and then you’ve still got taxes to take into account. Because you’re a self-employed independent contractor, you’ll receive a 1099-MISC form instead of a W2 and will be responsible for paying the full federal and state income taxes on your end.
You’ll still be making money in the end, don’t worry, but less than you might have originally thought. Just keep that in mind before you decide Uber driving is for you!