Rideshare Driver Earnings Guide: Calculating True Net Profit
Rideshare drivers often see high gross payout numbers on their Uber or Lyft driver apps. However, failing to subtract fuel expenses, vehicle wear and tear, and depreciation leads to an inflated sense of income.
Gross Income vs. Net Hourly Income
Gross pay is simply the total payout before expenses. Net pay accounts for fuel consumed, oil changes, tire replacement, insurance, and vehicle value loss per mile driven.
Net Hourly Pay Equation
$$\text{Net Pay} = \frac{\text{Gross Pay} - (\text{Fuel Cost} + \text{Depreciation})}{\text{Hours Worked}}$$
Fuel cost = (Miles Driven / MPG) * Gas Price. Depreciation = Miles Driven * Cost Per Mile.
Numerical Example Calculation
Grossing $280 over 8 hours driving 140 miles with gas at $3.65/gal (26 MPG) and $0.15/mi depreciation results in $40.65 for gas + $21.00 for depreciation ($61.65 total expense). Net pay is $218.35, or $27.29 net hourly.