Uber and Lyft only pay for the engaged miles you drive with a passenger on board. Every pickup mile and every trip back home empty is on your dime.
Prop 22 vs. IRS Reality
• Prop 22 in California (created by Uber) guarantees about $0.36 per engaged mile for vehicle expenses.
• The IRS 2025 mileage rate is $0.70 per vehicle mile—the government’s own estimate of fuel, maintenance, insurance, and depreciation.
• Add the unpaid miles and your real pay can sink far below the true cost of ownership. For example in CA with Prop 22 and a 50% deadhead rate means drivers are only being reimbursed .36/2= .18 a vehicle mile when they are spending closer to .70-.80 with all business expenses included.
Deadheading the Silent Profit Killer
Driving empty to a pickup or back to your zone burns fuel, adds wear, and costs time with zero pay. Because every vehicle mile costs money and your not being paid for your.deadheading.
Long Trips Often Lose
That 40-mile airport run looks great until you drive 40 miles back empty. Unless the fare is at least double your target rate, you’re behind.
Morning time is best for a run to the airport if your willing to wait all day and into the late night for one going back. Pure torture if you ever tried it.
---
Smarter Times to Drive
Directional Filter on Your Commute – Set the app to only send trips toward home after work so every paid mile offsets a commute you’d drive anyway. This is really the only "smart" way to do rideshare, just a trip cost reduction and nothing more.
Weekend Peak Windows – Friday/Saturday late afternoon and evening when work, nightlife, and airport surges overlap.
Big Events & Stadium Lets-Out – Concerts, games, festivals create dense demand and short pickups.
Bad Weather – Rain or sudden cold drives surge pricing while supply drops.
Short-Hop Corridors – Busy downtowns/bar districts where 1–4 mile rides chain together with almost no unpaid miles.
Work locations where lots of sources of trips occur at the same time to reduce deadhead miles and pickup miles, stay within this hot area to get another quick trip. More trips is more tip chances. Don't be tempted to take off to the boonies with a seemingly high paying (but losing after costs included) trip offer unless it's takes you where you wanted to end up anyway.
Bottom-Line Rules
1. Track all miles—pickup + trip + deadhead—then divide earnings by total miles to find real $/vehicle-mile. Best way is to record odometer miles before starting and at the end of the day.
2. Know your break-even (often >$0.80/mi in expenses before labor).
Labor at $30,000/35000 typical full time miles annually is .86 cents a mile for labor. $20,000 is .57 cents a mile. But since Uber and Lyft won't pay (.80 + .86) x 2 = $3.32 an engaged mile you see why you should only do it if your already headed that way anyway. Not as a full time job.
3. Decline unprofitable offers—if fare ÷ total miles is under your target, skip it, let the ignorant newbies (which Uber and Lyft have lots of) take the garbage and go bankrupt while you don't.
4. Stay in dense zones to keep pickups short and engagement high. More chances at tips and well as the base fare occurs more frequently raising ones day pay per mile.
---
💡 Takeaway
Treat rideshare as a side hustle, not a full-time career. This is where a lot of drivers get wrong.
Uber and Lyft are NOT paying the required amounts for sustainable full time drivers ($2.60+ per trip mile), only a small fraction of that. They fully expect to use your real job subsidized vehicle and equipment your already using temporarily. So when you make Uber/Lyft your "real job" your costs to sustain yourself increases MORE than what they are willing to pay. That's why Uber and Lyft have a whopping 50-70% annual driver turnover rate. Too many people doing it thinking it's a real job and it's not paying enough so they quit.
Drive only when the odds—surge pricing, dense demand, or a commute you’d take anyway—stack in your favor. Uber and Lyft pay one way only; make sure almost every mile you drive is paid. Remember deadheading kills profits.
You can certainly make money ride-sharing if your smart about it but you likely won't make a decent living doing it. Only in rare niches that might be still possible. BTW most city and state pay floors also miss the mark as you can see by this chart where all the pay schemes have been converted to pay per miles/speed for comparison.
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Many of the pay schemes are based upon time and of course the faster one drives the more per vehicle mile costs goes up and since Uber and Lyft are not paying .70 cents a mile for vehicle expenses, starts to eat into ones hourly pay the faster and longer the trip is.
So yes, a LOT of pencil whipping going on here but the government looks at that the poor are getting transport, that saves them money as bus and train use has dropped since Uber/Lyft arrived. And if this means deceiving the drivers to get them to take poor granny to the eye doctor then so be it.
Now you see the big picture and why Uber was successful in winning big governments to overthrow local sustainable taxi services.
They just offered a cheaper unsustainable replacement which the government can track everyone as a bonus.
Uber is a good thing, just it's taken the wrong way by a lot of drivers thinking they can make a career out of it. Uber of course is to blame for that by not fully explaining what it is and how it's to be used. Provides quests, bonuses etc. to entice drivers to drive more thus lose more money.
The true ride-sharing concept has failed, most people DON'T want to bother to take others along a current trip, nut cases, rapists and thugs abound out in the real world. So Uber is swamped with demand and not enough drivers at times, this is your cue to take advantage of those times to make a profit and not lose trying to do it full time.
Prop 22 vs. IRS Reality
• Prop 22 in California (created by Uber) guarantees about $0.36 per engaged mile for vehicle expenses.
• The IRS 2025 mileage rate is $0.70 per vehicle mile—the government’s own estimate of fuel, maintenance, insurance, and depreciation.
• Add the unpaid miles and your real pay can sink far below the true cost of ownership. For example in CA with Prop 22 and a 50% deadhead rate means drivers are only being reimbursed .36/2= .18 a vehicle mile when they are spending closer to .70-.80 with all business expenses included.
Deadheading the Silent Profit Killer
Driving empty to a pickup or back to your zone burns fuel, adds wear, and costs time with zero pay. Because every vehicle mile costs money and your not being paid for your.deadheading.
Long Trips Often Lose
That 40-mile airport run looks great until you drive 40 miles back empty. Unless the fare is at least double your target rate, you’re behind.
Morning time is best for a run to the airport if your willing to wait all day and into the late night for one going back. Pure torture if you ever tried it.
---
Smarter Times to Drive
Directional Filter on Your Commute – Set the app to only send trips toward home after work so every paid mile offsets a commute you’d drive anyway. This is really the only "smart" way to do rideshare, just a trip cost reduction and nothing more.
Weekend Peak Windows – Friday/Saturday late afternoon and evening when work, nightlife, and airport surges overlap.
Big Events & Stadium Lets-Out – Concerts, games, festivals create dense demand and short pickups.
Bad Weather – Rain or sudden cold drives surge pricing while supply drops.
Short-Hop Corridors – Busy downtowns/bar districts where 1–4 mile rides chain together with almost no unpaid miles.
Work locations where lots of sources of trips occur at the same time to reduce deadhead miles and pickup miles, stay within this hot area to get another quick trip. More trips is more tip chances. Don't be tempted to take off to the boonies with a seemingly high paying (but losing after costs included) trip offer unless it's takes you where you wanted to end up anyway.
Bottom-Line Rules
1. Track all miles—pickup + trip + deadhead—then divide earnings by total miles to find real $/vehicle-mile. Best way is to record odometer miles before starting and at the end of the day.
2. Know your break-even (often >$0.80/mi in expenses before labor).
Labor at $30,000/35000 typical full time miles annually is .86 cents a mile for labor. $20,000 is .57 cents a mile. But since Uber and Lyft won't pay (.80 + .86) x 2 = $3.32 an engaged mile you see why you should only do it if your already headed that way anyway. Not as a full time job.
3. Decline unprofitable offers—if fare ÷ total miles is under your target, skip it, let the ignorant newbies (which Uber and Lyft have lots of) take the garbage and go bankrupt while you don't.
4. Stay in dense zones to keep pickups short and engagement high. More chances at tips and well as the base fare occurs more frequently raising ones day pay per mile.
---
💡 Takeaway
Treat rideshare as a side hustle, not a full-time career. This is where a lot of drivers get wrong.
Uber and Lyft are NOT paying the required amounts for sustainable full time drivers ($2.60+ per trip mile), only a small fraction of that. They fully expect to use your real job subsidized vehicle and equipment your already using temporarily. So when you make Uber/Lyft your "real job" your costs to sustain yourself increases MORE than what they are willing to pay. That's why Uber and Lyft have a whopping 50-70% annual driver turnover rate. Too many people doing it thinking it's a real job and it's not paying enough so they quit.
Drive only when the odds—surge pricing, dense demand, or a commute you’d take anyway—stack in your favor. Uber and Lyft pay one way only; make sure almost every mile you drive is paid. Remember deadheading kills profits.
You can certainly make money ride-sharing if your smart about it but you likely won't make a decent living doing it. Only in rare niches that might be still possible. BTW most city and state pay floors also miss the mark as you can see by this chart where all the pay schemes have been converted to pay per miles/speed for comparison.
Many of the pay schemes are based upon time and of course the faster one drives the more per vehicle mile costs goes up and since Uber and Lyft are not paying .70 cents a mile for vehicle expenses, starts to eat into ones hourly pay the faster and longer the trip is.
So yes, a LOT of pencil whipping going on here but the government looks at that the poor are getting transport, that saves them money as bus and train use has dropped since Uber/Lyft arrived. And if this means deceiving the drivers to get them to take poor granny to the eye doctor then so be it.
Now you see the big picture and why Uber was successful in winning big governments to overthrow local sustainable taxi services.
They just offered a cheaper unsustainable replacement which the government can track everyone as a bonus.
Uber is a good thing, just it's taken the wrong way by a lot of drivers thinking they can make a career out of it. Uber of course is to blame for that by not fully explaining what it is and how it's to be used. Provides quests, bonuses etc. to entice drivers to drive more thus lose more money.
The true ride-sharing concept has failed, most people DON'T want to bother to take others along a current trip, nut cases, rapists and thugs abound out in the real world. So Uber is swamped with demand and not enough drivers at times, this is your cue to take advantage of those times to make a profit and not lose trying to do it full time.
