Where Uber Drivers Make Bank- And Where They’d Be Better Off Working At McDonald’s

Kathy Morris
by Kathy Morris
Study - 3 months ago

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Even if you haven’t driven for Uber, you have almost certainly ridden in one or one of their competitors. The gig economy has become pervasive throughout our society- and it is only growing bigger.

Uber touts itself as a well-paying, flexible way for people to earn money on their schedule. However, while Uber is certainly flexible, the well-paying part is a little bit less clear.

While driving for Uber can seem like a sweet way to make some extra cash, not every driver comes away with a fuller wallet. Some find themselves grinding and racking up car repairs but not much money.

So, is Uber worth it? Well, the answer has a lot to do with where you’re driving. We examined some of the hottest Uber markets in the country to see if the drivers are making bank, or would be better off doing almost anything else.

We have a breakdown of all the cities at the bottom, but first let’s examine the cities with the best (and worst) earnings.

Where Uber Drivers Are Making Bank

  1. Pittsburgh, PA
  2. Philadelphia, PA
  3. Atlanta, GA
  4. Houston, TX
  5. Salt Lake City, Ut

Where Uber Drivers Would Be Better Doing Almost Anything Else

  1. Washington DC
  2. Los Angeles
  3. San Diego, CA
  4. Phoenix, AZ
  5. Denver, CO

These are the best- and the worst- places to Uber drive. What do the worst cities have in common? Almost unanimously they are expensive areas that have a higher minimum wage than the federal wage. The better areas to drive are lower cost areas where making minimum wage means making $7.25 an hour. We have a full breakdown at the bottom, but first here is the breakdown of our numbers:

How We Determined The Cities Where Uber Drivers Are Pulling In Decent Cash

We used data on hourly Uber driver earnings in 25 of the busiest Uber markets from the RideShareGuy’s survey.

At first glance, these earnings can look impressive. However, Uber drivers are responsible for their share of unseen expenses.

Uber drivers spend a pretty penny on:

  • Gas
  • Car depreciation
  • Car upkeep and repairs
  • Self employment taxes

Since depreciation/gas is calculated at .58 a mile by the IRS, driving just 10 miles costs a driver $5.80 in actual earnings. Even in the most congested city, a driver will be hard pressed to drive less than 10 miles in an hour of driving. That $5.80 doesn’t even take into account self-employment taxes.

To account for all of these expenses, we deducted a flat 20% from the hourly earnings of Uber drivers to get the actual hourly earnings drivers.

After having the hourly wage, we had to answer another question- would they be better off working somewhere else? Since Uber drivers have different qualifications and backgrounds, we didn’t want to make any assumptions about their earning potential outside of Uber.

With that in mind, we decided to just compare the actual average Uber hourly earnings by city to the local minimum wage. The higher the actual hourly Uber wage was than the minimum wage, the better opportunity driving for Uber was. When the actual hourly Uber wage was below minimum wage we determined they would be better working at McDonald’s. Or literally anywhere else.

It is worth noting that many states and cities raised their minimum wage in 2019 and at the start in 2020. If we had evaluated this in December, the numbers might look quite different.

The formula we used was:

  • Average Hourly Uber Earnings – 20% = Actual Uber Earnings
  • Actual Uber Earnings – Minimum Wage = Is driving for Uber worth it in this place?

If the answer was positive, that means in that market driving Uber will lead to more money per hour, then working a minimum wage job. If the answer is negative, then the driver would take home less money than if they were pulling in minimum wage.

The Best Places To Drive Uber

1. Pittsburgh, PA

Pittsburgh|Central Business District, PA

Actual Hourly Uber Rate: $13.20
Minimum Wage: $7.25
Difference After Minimum Wage: $5.95

A Pittsburgh Uber driver on average gets to keep almost $6 above minimum wage. If they drive 20 hours a week, that comes out to $120 bucks a week, $480 a month, and $5,760 a year. They may not get health insurance, but that is a tidy bit of cash to help make ends meet.

2. Philadelphia, PA

Philadelphia|Alleghany West, PA

Source: Public domain

Actual Hourly Uber Rate: $12.52
Minimum Wage: $7.25
Difference After Minimum Wage: $5.27

Almost 70 cents below, in #2 we have Philadelphia. The city of brotherly love is also apparently the city of Uberly love.

3. Atlanta, GA

Atlanta, GA

Actual Hourly Uber Rate: $12.42
Minimum Wage: $7.25
Difference After Minimum Wage: $5.17

Hot-lanta Uber drivers make 5 dollars more than the federal minimum wage. Of course, they make 12.42 more than the Georgia minimum wage, which is zero dollars.

4. Salt Lake City, UT

Salt Lake City, UT

Actual Hourly Uber Rate: $11.27
Minimum Wage: $7.25
Difference After Minimum Wage: $4.02

Salt Lake City is one of the best cities for millennials and a pretty good spot to be an uber driver.

5. Houston, TX

Houston|Downtown, TX

Actual Hourly Uber Rate: $11.27
Minimum Wage: $7.25
Difference After Minimum Wage: $4.02

Houston might be the last, most profitable city to drive uber. However, uber drivers make 4 dollars more than they would at a minimum wage job- meaning Houston Uber drivers have a strong financial incentive to keep driving.

The Worst Places To Drive Uber

1. Washington, DC

washington-dc

Source: Public Domain

Actual Hourly Uber Rate: $12.17
Minimum Wage: $14
Difference After Minimum Wage: -$1.83

Washington, DC is an expensive place. Fortunately for lower income residents, the minimum wage is higher than the national minimum wage. Yet, Uber drivers come out on the wrong side of the line. Every hour spent driving, Uber drivers come out nearly 2 bucks below their minimum wage counterparts. That won’t help pay the pricey DC rent.

2. Los Angeles, CA

East Los Angeles, CA

Source: Wikipedia User User:Jocelinyy | CC BY-SA 3.0

Actual Hourly Uber Rate: $13.54
Minimum Wage: $14.25
Difference After Minimum Wage: -$0.71

Everyone is trying to become someone in LA. Yet, unless Steven Spielberg gets in the back of our Uber, most likely all your getting from your gig is .71 cents less than you’d make at Starbucks.

3. San Diego, CA

San Diego|Ocean Beach, CA

Actual Hourly Uber Rate: $12.54
Minimum Wage: $13
Difference After Minimum Wage: -$0.46

San Diego is another California city where Uber may not be the financial answer. San Diego workers with the ability to work a job with stiffer hours would make more money not having strangers in the back of their car.

4. Phoenix, AZ

Phoenix, AZ

Source: Public domain

Actual Hourly Uber Rate: $11.81
Minimum Wage: $12
Difference After Minimum Wage: -$0.19

Arizona’s January 2020 minimum wage raise has minimum wage workers making .19 cents more than Uber drivers. Good for Arizonians.

5. Denver, CO

Denver, CO

Actual Hourly Uber Rate: $12.71
Minimum Wage: $12.85
Difference After Minimum Wage: -$0.14

Denver might be one of the most popular cities for millennials, but any millennial who is trying to make extra cash driving Uber should be cautious. While .14 cents might seem pretty insignificant (What can you buy for .14cents?), it adds up to $268.80 a year full-time. If that’s isn’t persuasive enough, that minimum wage job might have potential advancement and come with unemployment. Denver only made the last thanks to it’s January 1st, 2020 minimum wage increase.

Summary On Where Uber Drivers Make Bank- And Where They Don’t

If you’re driving Uber and making crazy cash in one of the areas we highlighted as being a dud- congrats! These numbers are averages and every average has outliers. Factors such as times of day you drive and type of car can heavily influence profitability. An Uber driver who only drives 5am airport treks to supplement their existing income might be pulling in a tidy sum of extra cash.

Similarly, the flexibility of ride sharing might have a personal economic value that skakes up our equation.

However, we would encourage every Uber driver to carefully track their expenses (not just for taxes!) but to determine if Uber is actually making you what you think it is.

Uber and other jobs in the gig economy can be deceptive. When you’re bringing home more cash a week, it can feel good. However, when tax time comes and you have nothing stashed away, it doesn’t feel as good. Or when you car dies and you lack the funds to fix it, it feels pretty bad.

We also did not take into account the lost opportunity costs of “driving for yourself.” However, it is worth noting the Uber drivers receive no healthcare or other benefits and if they are ever terminated from Uber they will not receive unemployment.

Ultimately, many Uber drivers are making a choice- a choice that is heavily impacted by their location! Check out the full list below.

Where Uber Drivers Make The Most- And The Least- Money

Rank Market Actual Hourly Uber Wage Hourly Costs Minimum Wage Difference
1 Pittsburgh, PA $13.20 $3.30 $7.25 $5.95
2 Philadelphia, PA $12.52 $3.13 $7.25 $5.27
3 Atlanta, GA $12.42 $3.10 $7.25 $5.17
4 Houston, TX $11.27 $2.82 $7.25 $4.02
5 Salt Lake City $11.27 $2.82 $7.25 $4.02
6 Cleveland, OH $12.66 $3.17 $8.70 $3.96
7 Dallas, TX $11.00 $2.75 $7.25 $3.75
8 Nashville, TN $11.00 $2.75 $7.25 $3.75
9 Las Vegas, NV $12.10 $3.02 $9.00 $3.10
10 San Francisco, CA & Bay Area $18.54 $4.63 $15.59 $2.95
11 Boston, MA $15.08 $3.77 $12.75 $2.33
12 Miami, FL $10.84 $2.71 $8.56 $2.28
13 Orlando, FL $10.18 $2.55 $8.56 $1.62
14 Tampa Bay, FL $10.00 $2.50 $8.56 $1.44
15 Seattle, WA $14.92 $3.73 $13.50 $1.42
16 New York And Jersey Area $16.32 $4.08 $15.00 $1.32
17 Charlotte, NC $8.00 $2.00 $7.25 $0.75
18 Chicago, IL $13.71 $3.43 $13.00 $0.71
19 Portland, OR $13.06 $3.26 $12.50 $0.56
20 Sacramento, CA $13.43 $3.36 $13.00 $0.43
21 Denver, CO $12.71 $3.18 $12.85 -$0.14
22 Phoenix, AZ $11.81 $2.95 $12.00 -$0.19
23 San Diego, CA $12.54 $3.14 $13.00 -$0.46
24 Los Angeles $13.54 $3.39 $14.25 -$0.71
25 Washington DC $12.17 $3.04 $14.00 -$1.83

Want the latest research and most engaging stories first? Email Kathy Morris at kmorris@zippia.com to be added to our weekly newsletter.

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