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This content is for informational purposes only and is not intended to provide financial advice.
The inflation that we’ve seen over the last few months has encouraged many people to look into doing a side hustle to keep up with growing expenses.
Uber, DoorDash, Lyft, and other gig companies have been well-known options for making extra cash, but you may be wondering if these companies provide insurance to their drivers, like Uber does for their food delivery drivers with Uber Eats insurance.
Let’s take a look at some side hustle options for 2022, how much you can make, and other considerations with these jobs.
How profitable is delivery driving?
With most delivery driving jobs, it is tricky to give an exact number that you’d be earning. The amount of time you spend driving or delivering is mostly what dictates your income.
The population of the area you’re driving in also impacts your salary. However, you should keep in mind that you may be making less than advertised after expenses.
Here are some average hourly earnings across various ridesharing and delivery driving apps:
- Uber: $15 to $30 per hour
- Lyft: $20 to $28 per hour
- DoorDash: $15 to $25 per hour
- GrubHub: $12 to $15 per hour
- GoPuff: $10 to $15 per hour
- Instacart: $15 to $20 per hour
Tips are a huge consideration when determining the hourly pay as well, so the numbers you see above can be even higher when tips are added. Most of these gigs allow you to keep 100% of your tips, but look into it before choosing which ones to work for.
With the growing popularity of food delivery due to the pandemic, using your vehicle for deliveries is still a viable way to make money on the side.
Driving Expenses to Keep in Mind
While the gig driving side hustle can seem like a quick buck, to truly make a profit you should be prepared for any expenses that will take from your earnings.
Your biggest expenses will include:
- Car or lease payments
- Gas
- Insurance
- Taxes (which includes a self-employment tax with the IRS)
- Tolls, license, permit fees (passengers will pay an added surcharge for toll fees)
- Vehicle maintenance
Similar to how your earnings may vary, these expenses will also likely vary. The type of vehicle you drive, your driving record, your age, and the location of your services can all affect the type of expenses you’ll have. Maintaining the cleanliness of your vehicle with frequent car detailing and washing can end up being costly as well.
What are the requirements to sign up?
Naturally, there are some requirements you need to meet before signing up for ridesharing or delivery driving gigs. Most of the requirements are similar between the various apps and companies. In most cases, the difference is vehicle requirements.
For example, Uber requires your vehicle to have four doors. However, their food delivery service (UberEats) is more lenient and allows two- or four-door vehicles.
The model of your vehicle is also a factor. UberEats requires your vehicle to be at least a 1998 model or newer, but it can vary by city.
Some food delivery companies allow their drivers to use motorcycles, bicycles, or scooters. This mostly depends on the service you would be providing and the size of your delivery location (bigger cities would allow this, for example).
The general requirements across most apps are:
- Ability to lift 40–50 pounds (for food delivery)
- Clean background check and driving record
- Valid car insurance
- Valid driver’s license.
Age Requirements
The age requirement for gig driving can vary. In general, you should be 18 years or older. However, some companies can have 21 as the minimum age requirement. Let’s take a look at Uber, for example.
With Uber, you can be of the minimum driving age in your state. However, if you are under the age of 23, you’ll be required to have longer licensed driving experience (three years of licensed driving as opposed to the normal one-year requirement).
Should you get rideshare insurance?
Your personal car insurance policy isn’t proper coverage if you become a gig driver. If an incident occurs while you’re on the clock, your insurance company won’t cover those claims. Uber and Lyft do provide a basic level of liability coverage, but relying solely on this coverage may not be the best option because these policies have high deductibles.
This is where rideshare insurance comes in. Rideshare insurance is a type of commercial car insurance policy specifically for rideshare or food delivery services. It is distinct from non-owner car insurance, which would be more for people who regularly drive other people’s cars, rather than getting rides from them.
Typically, commercial car insurance is intended for larger businesses. This leads the policies to be designed for many vehicles or vehicles that are exclusively used for commercial purposes.
Rideshare Insurance Specifics to Keep in Mind
It doesn’t normally make sense for a person using Uber as a side job to have a standard commercial policy, so most insurers will sell rideshare coverage as an additional policy. This allows commercial coverage to drivers who aren’t running a full-scale business.
GEICO, Progressive, USAA, Allstate, State Farm, and Farmers are all insurers that can offer you rideshare coverage for a low monthly cost. If your current insurance provider does not offer rideshare insurance, you’ll have to switch insurance providers since you cannot purchase rideshare-only coverage.
How Food Delivery Differs From Ridesharing
While rideshare insurance coverage is great for gigs where you’re driving around passengers, you may not get coverage while delivering packages or food.
The growing food delivery industry is relatively new to most insurance providers, so your best bet is to talk to an insurance agent directly. Since food delivery is becoming so popular, it’s likely that delivery-friendly policies will be added in the future.
Liability Insurance Specifics Provided by Ridesharing Companies
A variety of food delivery agencies have their own policies to handle the insurance problem. UberEats is considered to have one of the best insurance policies for its drivers.
They provide up to $1 million in liability coverage during the whole delivery process along with collision and comprehensive coverage. However, these policies include a $1,000 deductible.
DoorDash has a $1 million policy that covers bodily injury and property damage. These policies only apply to “active deliveries,” meaning that you must be in possession of the food during the accident to receive coverage.
Postmates is another with $1 million liability coverage per accident to cover property damage and injury to others. Postmates’ policy is specifically intended for the scenario when your personal policy limits have been exhausted.
In contrast, companies like Instacart and GrubHub do not provide specific coverage for their drivers.
Is gig driving still worth it?
At the end of the day, only you can determine if it’s worth it for you based on your schedule, lifestyle, and personality. If you don’t mind working with people and have the free time on your hands to taxi people or deliver their food, then this side hustle could work well for you and help you save money.
Each company has its pros and cons, so we recommend doing your own research to determine which one is best for your needs.
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Luke Williams writes and researches for the auto insurance comparison site, AutoInsurance.org. His passions include best practices for insurance and ways to make extra cash with ridesharing and food delivery services.
