Using a rental car for a rideshare gig might be your best option
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!
