Complete Guide to Rideshare Driver Earnings
Driving for Uber and Lyft can provide flexible income, but understanding your true earnings requires accounting for all expenses. Many drivers focus only on gross earnings displayed in the app without considering gas, vehicle depreciation, maintenance, insurance, and taxes. Our Rideshare Earnings Calculator helps you calculate your actual hourly rate and take-home pay.
Understanding Rideshare Expenses
Vehicle Depreciation
Depreciation is often the largest hidden cost of rideshare driving. Every mile driven reduces your vehicle's value. Average depreciation costs range from $0.10-0.25 per mile depending on your vehicle. A driver putting 30,000 miles per year on their car may see $3,000-7,500 in annual depreciation.
Gas and Maintenance
Fuel costs depend on your vehicle's MPG and local gas prices. At 30 MPG and $3.50 per gallon, gas costs approximately $0.12 per mile. Maintenance costs including oil changes, tires, brakes, and repairs average $0.05-0.10 per mile for well-maintained vehicles.
Insurance and Taxes
Rideshare-specific insurance costs $50-200+ per month beyond standard auto insurance. As an independent contractor, you pay self-employment tax (15.3%) plus income tax on your net earnings. Setting aside 25-35% for taxes is prudent for most drivers.
IRS Mileage Deduction
The IRS allows a standard mileage deduction of $0.67 per mile (2024 rate) for business driving, which simplifies tax filing and often provides a larger deduction than tracking actual expenses. Keep detailed mileage logs for tax purposes.