FEBRUARY 5, 2024
Dean Ceran works for Uber between 50 and 60 hours a week. Driving expenses significantly reduce his business profits. Photo: Dean Ceran.
- A boomer Uber driver’s business had over $100,000 in earnings but only $20,000 in profits.
- Uber commissions and driving expenses significantly reduced his profitability.
- The driver shared why he planned to keep working for Uber.
Dean Ceran spends a lot of time behind the wheel of his Kia Forte.
Since 2016, the 66-year-old has put over 410,000 miles on the vehicle, more than 90% of which came while driving for Uber, he told Business Insider.
In a typical week, Ceran works between 50 and 60 hours. He drives between 7:30 a.m. and 5:30 p.m. every weekday except Wednesday — his off day — keeps the same schedule on Saturdays, and then works between 11 a.m. and 5:30 p.m. on Sundays. In his seven years as a driver, he’s completed over 26,000 trips.
“The pros are the money I earn and the people I meet along the way,” Ceran said of Uber driving in Virginia. “The cons are the time it takes to keep track of all the expenses.”
These expenses do more than just take up his time — they take a significant bite out of his earnings. In 2023, Ceran had over $103,000 in gross Uber income, according to a tax document viewed by BI. But after Uber took its cut and his driving expenses were accounted for, his profits fell to about $20,000.
Even so, Ceran told BI that he had no plans to stop driving and that while it had become a bit harder to make money in recent years, he’s still reaching his financial goals.
“Even after expenses, I am still making a nice living driving with Uber,” he said.
Ceran is one of many Uber and Lyft drivers actively tracking their ride-hailing earnings and expenses to make sure the gig is worth their time. But the calculations drivers use — and what figures they value when evaluating their success — vary considerably. Some have daily trip and earnings goals, while others care more about their per-mile or per-hour earnings. Some are focused on their profitability after vehicle expenses, while others monitor their taxable income.
In recent months, several drivers have told BI that ride-hailing has become less profitable than it used to be, which many have attributed to the rising number of drivers and changes to company algorithms they say have resulted in lower pay. Some drivers said closely monitoring their earnings was more important than ever.
Ceran shared his top strategy for making money and what motivated him to stick with ride-hailing.
How commissions and driving expenses reduce drivers’ profits
Of Ceran’s roughly $83,000 in total business expenses, $38,000 consisted of Uber’s booking and service fees — effectively the commission the company takes from drivers’ earnings. Deducting $38,000 from his $103,000 in gross pay took Ceran’s Uber income to roughly $65,000.
But that’s before taking out driving expenses. For drivers, the cost of using their vehicles is a business expense that reduces their profits.
When filing their taxes, there are two ways drivers can calculate their business expenses. First, they can input their gas, insurance, maintenance, and other vehicle expenses in a given year — but these can be tricky to keep track of. Ceran estimated that in 2023, he spent $13,000 on maintenance, $9,000 on gas, $2,000 on car insurance, and $800 on tolls.
Instead, many drivers opt for the second option — the IRS’s standard mileage deduction.
The figure varies year to year, but in 2023, drivers could deduct $0.65 for every business mile they drove as a vehicle expense. This calculation is intended to account for driving expenses such as gas and maintenance, so if a driver uses the mileage-deduction option, they’re not supposed to deduct these expenses elsewhere on their tax returns.
“You have to choose between using the standard mileage deduction or actual car expenses like insurance, maintenance, etc.,” Lisa Greene-Lewis, a certified public accountant and tax expert with TurboTax, told BI.
There are some exceptions to this — including expenses including tolls, parking, and complimentary water for customers — that drivers can deduct in addition to their mileage deductions, Greene-Lewis said.
Given that Ceran drove roughly 67,000 miles for Uber in 2023, his mileage deduction was about $44,000.
When Uber’s $38,000 commission and the $44,000 in mileage deductions are subtracted from his $103,000 in gross earnings, his business profits fall to about $21,000. Take out $800 worth of tolls, and you get about $20,000.
The success of Ceran’s business is, to some degree, in the eye of the beholder. After accounting for Uber’s commission — and before expenses — Ceran saw as much as $65,000 in Uber income enter his bank account in 2023. The $44,000 deduction was an estimate for tax purposes, so it’s possible his true vehicle expenses weren’t quite that high. For some drivers, the ability to reduce their taxable income and pay less in taxes is a perk of the gig.
That said, commissions and driving expenses took a significant cut out of his business’ profitability.
Accepting nearly every ride has helped him make money
Even before he first tried Uber, Ceran had plenty of experience driving for a living. He said he used to drive town cars and limousines in the ’80s and ’90s.
His first year driving Uber, 2016, was more eventful than anticipated: He got caught in Hurricane Matthew while driving in Norfolk, Virginia.
“I was actually stuck in door-deep water for a couple of hours and didn’t get towed for 12 hours,” Ceran said.
In the years following this incident, he said his Uber hours fluctuated widely but that he’d been doing it full time since 2019.
Ceran’s top strategy is to accept nearly every trip — his acceptance rate is 99%. When one ride ends, he said, he tries to get another as soon as possible.
“The idea is to let the app keep giving me trips and keep accepting them so I keep rolling and keep making money,” he said.
Some drivers have opted for a different approach.
The biggest factor that has negatively influenced his earnings has been taking time off for vehicle repairs — he said he’d gotten in a few accidents over the years that weren’t his fault.
The primary reason Ceran continues to drive is that he’s satisfied with the income, but he said the gig also had social benefits.
“I love the interaction with the wide variety of people that request Uber rides,” he said.
Courtesy: Business Insider
