If you are considering driving for a rideshare company such as Uber or Lyft, you will have to change the way you shop for a vehicle. Each rideshare company maintains a list of approved vehicles for each category of service, but not every car on the list will prove to be a cost-efficient vehicle that transports your riders in comfort.
Also, rideshare vehicles obviously see more use in different driving situations than a strictly private vehicle. There is not just the additional impact on the vehicle components and gas mileage, you must also consider depreciation and the effect on your insurance premiums.
Since you are becoming a rideshare driver to make money, the best vehicle will not be new. A used car provides several benefits to your new business, starting with the purchase price.
Read on to learn what to look for in a rideshare vehicle and which cars are the best to use as rideshare cars. But before we go into that, let’s look at the operating costs of a rideshare vehicle.
Rideshare Driver Operating Costs
Take into consideration every element of car ownership when selecting a car. Since your primary reason for becoming a rideshare driver is to generate revenue, your goal is to find the lowest-cost vehicle that meets the rideshare company’s requirements.
Maintenance and Upkeep
Unexpected repairs and expensive maintenance can chew into your profits. Before purchasing a pre-owned car or SUV, check the vehicle history report (VHR) for the specific vehicle under consideration.
Look for accidents, salvage records, or poor service history. All you need is the VIN to obtain a report from Carfax or AutoCheck. Also, check for recalls on the NHTSA website.
Depreciation
The primary reason you don’t want a new car for this endeavor is the amount of depreciation a vehicle experiences from the moment it leaves the car lot. Depreciation is a measure of lost value, and it isn't a linear relationship.
Depreciation is most significant for a new car, typically 20% for the first year of ownership. The rate decreases after that. Check Kelley Blue Book and Edmunds to find cars that hold their resale value the best. When it’s time to sell or trade-in your car, you will see a distinct advantage to buying used in the first place.
Fuel Efficiency
Fuel economy has improved over the years, but you still need to consider the fuel efficiency of the vehicle you select for ride-share. The most fuel-efficient vehicles are hybrids, which have been on the market long enough that availability has grown and used versions of these vehicles have made their way to pre-owned auto dealerships for sale.
Insurance
Insurance rates differ with miles driven, type and size of the car, and other factors. Keep insurance in mind as you make your selection. You may be required to have a Transportation Networking Company policy unless you are a commercial driver working for a rideshare company.
In that case, you may be covered automatically by state or local mandated insurance for commercial drivers. Your insurance will cost more than for a private vehicle, but that is a cost of doing business as a rideshare driver.
Rideshare companies typically offer different tiers or categories of service. Decide which level of service you want to offer and then find an acceptable class of vehicle for that category that is the most cost-effective for maintenance, fuel, depreciation, and insurance.
What to Look for in a Rideshare Vehicle
Operating costs are only part of the deal. Your vehicle must also meet the requirements of the rideshare company, the service category, and local law.
Take the Uber categories, for example. In most categories, the vehicle cannot be older than 10 years; local requirements may vary.
- UberX and POOL - the lowest priced (and lowest revenue generating for the driver) service offered. UberX and POOL cars are usually mid-range, four-door sedans that seat up to four passengers.
- UberXL - non-luxury minivans and SUVs that seat up to six passengers. Rates are higher than for UberX and POOL vehicles, increasing your revenue generating capacity.
- UberSELECT - not available in all markets, UberSELECT is a lower cost version of UberBLACK. Rates are higher than UberX and UberXL. The vehicle must seat up to four.
- UberBLACK - a higher end luxury Uber service. You must be professionally licensed and commercially insured. The vehicle must seat up to four passengers. The interior and exterior must be black (of course).
- UberSUV - the highest priced service available with higher rates for the driver. The SUV must seat up to six passengers and meet the same professional licensing and insurance standards as UberBLACK. Interiors and exteriors must be black.
Check the internet for equivalencies with other rideshare platforms.
Compare and consider the roominess and amenities of each car to select the one passengers will appreciate the most.
- Make it comfortable - working air conditioning and heating, an adequate stereo, cup holders for all seats, and USB ports are highly coveted, as are power seats and windows.
- Ample leg, seat, and headroom to accommodate all passenger body types makes a favorable impression.
- Four doors are a must; a two-door vehicle will probably get you a bad review.
- Check for a quiet interior, smooth ride and comfortable seats.
- Look for adequate safety features from multiple airbags to the best field of vision for you and your passengers. Safety features also lower insurance premiums.
- Buy with the predominant weather in mind. All-wheel drive vehicles earn more in snowy conditions.
Think about the experience you would want if you were in the passenger seat.
Potential Pitfalls
Before you can drive for a rideshare company, you will need to pass an auto inspection to ensure the vehicle meets the company standards. Any vehicle you pick will need to fit within the service category you want to drive for.
While the company may provide a list of pre-approved vehicles, you will still need to pass the inspection. Also, not every car on the list is a good rideshare automobile.
On the other hand, not every acceptable make and model is listed. Always check with the rideshare company if you have or are considering a car that is not on the list. Usually, if it meets requirements, you will be given permission to use it.
Finally, check the warranty. Using a vehicle for rideshare may void or reduce warranty coverage.
Driving for a rideshare company can put some welcome income into your pocket, but you need to be a savvy buyer to maximize your revenue. Get the best price you can on the type of vehicle you want, taking into consideration all the elements above.
Contact the specific rideshare company with any questions. Take extra care on the road as you ferry those revenue-generating passengers wherever they want to go.
