There’s a cellphone app for everything nowadays, and transportation is no exception. Founded in 2009, Uber, an app-based car-hiring service headquartered in San Francisco, now operates in 260 cities and 45 countries. However, Uber can be risky and you should know the risks of becoming a driver before you apply.
How Uber works
Uber is a ride referral service. Unlike cab drivers, Uber drivers use their cars and pay for their gas. Uber Payment transacts through a smartphone app, via the credit card that passengers added to Uber’s platform at signup. The company takes a cut from each fare and direct deposits the rest of the money into the driver’s account.
Uber rides are usually cheaper than cab fare. Savings drop when you use the service during peak times when surge pricing is in effect. At such times, which include rush hour traffic hours, you can expect to pay much higher rates than usual.
Uber also features a unique rating system. After an Uber ride is complete, the driver and passenger will rate one another. Riders comment on aspects such as the promptness of the service and cleanliness of the vehicle. Drivers assess the behavior of the passengers. While this rating can be helpful for drivers and users, the score isn’t without its downsides. Bad overall ratings, whether well-founded or not, can get a driver deactivated or a passenger blacklisted.
Uber Can Be Risky: The Risks for Passengers
Uber might seem like an ideal way to get around — you can get a ride anywhere with just the push of a button! And it may sound like an easy way to make some spare cash. All you need is a car that is less than ten years old and a clear driving record, and you can sign up to be an Uber driver!
But like many things that read well on paper, Uber is riskier than it sounds. Before hailing an Uber car, consider the following.
Uber Can Be Risky: Lack of professional driving qualifications
Cab drivers adhere to specific standards. In San Francisco, for example, cab drivers must show proof of residency, good health, and hygiene, and have a driver’s license. They also must speak English, have a clean criminal record, and complete taxi driving training. In Los Angeles, prospective taxi drivers must have fingerprints on file and must pass a nationwide FBI criminal background check.
By contrast, Uber drivers just need to have a car in working order.
Uber Can Be Risky: Faulty background check system
While Uber does claim to perform a DMV and a federal/multi-state criminal background check, these checks are unreliable. NBC4 ran a three-month-long investigation of Uber and found multiple cases of drivers with criminal records. For example, drivers convicted of burglary, battery and assault, and drunk and reckless driving were part of the discovery.
NBC4 also asked a reformed ex-con with a 20-year rap sheet (including burglary, drug possession, and assault) to apply to drive for Uber. She filled out the application and agreed to a background check. Four weeks later, in spite of her criminal record, Uber approved her request.
While concerning, faulty background checks are an issue. A similar investigation by NBC Bay Area found that cab drivers with lengthy traffic records were also allowed to continue working.
Uber Can Be Risky: No liability
Because Uber drivers are independent contractors, not formal employees, the company denies all liability when things go wrong. In October 2014, a kidnapped passenger, by her Uber driver, was taken 20 miles out of her way to an abandoned lot. Later that same year, rider Roberto Chicas was attacked with a brick for telling his driver that he’d taken a wrong turn. Two years later, in 2016, Uber driver Jason Dalton went on a killing spree in Kalamazoo, shooting six different passengers. Uber took accountability for none of these incidents.
When you download the Uber app, you agree to terms and conditions by default. And in the fine print of these terms and conditions, Uber absolves itself of anything that happens to you–be it an accident, theft, assault, or death.
Of course, licensed cab companies have also failed to accept responsibility for misbehaving drivers. When a Yellow Cab passenger was abducted and assaulted by his cab driver, the driver disappeared, and Yellow Cab saw no consequences.
Uber Can Be Risky: Risks For Drivers
Uber can also be a dicey proposition for drivers, who risk more than they realize behind the wheel.
Safety Hazards and Why Uber Can Be Risky
Passengers aren’t the only ones at risk — there are numerous reports of Uber drivers assaulted as well. Recently, an off-duty Boston police officer assaulted their Uber driver unprovoked. Another driver had his jaw broken by an unruly passenger later that year.
Uber Can Be Risky: Financial risks
But the most significant risks for drivers are financial. Because they are not officially employees, Uber drivers are not offered worker’s compensation to cover hospital bills for physical harm incurred on the job. They are financially responsible for gas and vehicle maintenance — costs that add up quickly for someone who drives full-time. And most car insurance policies don’t cover drivers when they are working as a driver for a car-sharing company, such as Uber or Lyft.
Initially, Uber drivers reported that rates were once lucrative and could offset the risks and expenses. But since then, prices fell, and the percentage taken by Uber rose to 20%.
According to Uber, drivers make roughly $25 per hour. But after you deduct gas, maintenance, vehicle wear and tear, insurance, and hidden fees, drivers report their hourly rates as closer to $10 an hour. And this doesn’t even include the value lost by putting so many miles on their cars.
Drive for Uber and not sure how to afford your auto repairs? SuperMoney has tips for you!
Uber is affordable! But it stays affordable by cutting corners, minimizing safety checks, and underpaying their drivers.
Of course, traveling always involves some level of risk. Riding with (or being) a licensed taxi driver cannot guarantee your safety, either. Whether you’re a driver or a passenger, you should keep your wits about you, do your research, and stay safe out there.
Looking for a side hustle and considering driving for a ride share app? SuperMoney has gathered reviews and testimonials for the most promising side jobs. You can compare them side by side here.
Julie Bawden-Davis is a widely published journalist specializing in personal finance and small business. She has written 10 books and more than 2,500 articles for a wide variety of national and international publications, including Parade.com, where she has a weekly column. In addition to contributing to SuperMoney, her work has appeared in publications such as American Express OPEN Forum, The Hartford and Forbes.