Last updated: May 2026 · IRS mileage rate: $0.70/mile
Calculate your true rideshare earnings after platform fees, mileage costs, and self-employment tax — and find your real hourly rate.
Platform
Expense Deduction Method
The IRS standard mileage rate of $0.70/mile covers fuel, depreciation, oil, and repairs in one deduction. Multiply total miles by $0.70. This is the simpler option and often the larger deduction for rideshare drivers.
Weekly Results
Monthly & Annual Projections
Uber vs Lyft — Side-by-Side at Current Inputs
| Metric | Uber (25% fee) | Lyft (25% fee) |
|---|
Gross fares + tips: Rides × (fare + tip). Tips are NOT subject to the platform service fee — you keep 100% of tips.
Platform fee: Applied only to the fare portion, not tips. Uber and Lyft both target roughly 25% but actual effective take rates vary by market, trip type, and surge conditions.
Deadhead miles: Miles driven to pick up a passenger count against your IRS mileage deduction but generate zero revenue. If 300 miles/week are driven and ~35% are deadhead, roughly 105 miles produce no income.
SE tax: Calculated as 15.3% × 92.35% of net annual income (the 92.35% accounts for the employer-equivalent deduction). You pay this quarterly in estimated payments.
Standard mileage vs actual: $0.70/mile × total miles is the quick method. Actual expenses require tracking every fuel, maintenance, and insurance cost plus calculating a business-use percentage.
Estimates only. Platform fee structures, surge policies, and IRS rates change. Consult a tax professional before making financial decisions. Self-employment tax figures are estimates and do not account for income tax brackets or deductions beyond SE-related adjustments.
The advertised hourly earnings you see in Uber and Lyft recruitment materials are almost always gross figures — before fuel, vehicle wear, and taxes. Most studies of rideshare driver earnings put the median net income (after vehicle costs, before income tax) at $10–$15 per hour in most US markets. In high-density cities like New York, Chicago, or San Francisco, experienced drivers who work peak hours can clear $18–$25 per hour net. In suburban or rural markets, it can dip below $10 after expenses.
The biggest hidden costs are mileage and taxes. At the IRS 2026 rate of $0.70/mile, a driver doing 300 miles per week deducts $210 in costs — costs that are real even if you pay them out of pocket via fuel and wear. Layer on 15.3% self-employment tax on net profit and the effective tax rate for a full-time gig worker starts to look like a salaried employee's rate, except without employer benefits.
| Driver Type | Rides/Week | Avg Fare | Weekly Gross | True Net/Hr (est.) |
|---|---|---|---|---|
| Part-time (20 hrs) | 40 | $14 | $660 | $12–$16/hr |
| Full-time (40 hrs) | 80 | $14 | $1,320 | $11–$15/hr |
| Surge-focused (15 hrs) | 30 | $22 | $726 | $18–$24/hr |
| Airport specialist | 35 | $28 | $1,050 | $16–$22/hr |
| Low-fare suburban | 45 | $9 | $517 | $7–$10/hr |
The IRS standard mileage rate of $0.70/mile for 2026 is a blended rate covering fuel, oil changes, tires, depreciation, and routine maintenance. For most rideshare drivers with a fuel-efficient vehicle, standard mileage is both simpler and more generous. A driver doing 300 miles/week writes off $210 — equivalent to roughly $5.25/gallon fuel cost at 30 MPG even if they're only paying $3.80.
Actual expenses make sense if you have high insurance, heavy maintenance, or rapid depreciation costs that, when allocated to business use percentage, exceed the standard mileage deduction. You must elect one method per vehicle per year; you can't switch mid-year. Most rideshare-specific tax software defaults to standard mileage and it's the right call for the majority of drivers.
As an independent contractor, you owe both halves of Social Security and Medicare tax — totaling 15.3% — on your net self-employment income. The calculation applies to 92.35% of net profit (the 92.35 factor accounts for the deductible portion of SE tax itself). If your annual net is $16,000, SE tax is approximately $16,000 × 0.9235 × 0.153 ≈ $2,261. You can then deduct half of SE tax from your adjusted gross income on Form 1040.
Quarterly estimated payments are due mid-April, mid-June, mid-September, and mid-January. Missing these payments triggers an underpayment penalty, typically around 8% annualized on the shortfall. Many drivers set aside 25–30% of every payout for taxes — this covers SE tax plus estimated federal income tax without over-saving for most part-time drivers.
What percentage does Uber or Lyft take from drivers?
Uber and Lyft both target around 20–30% of the gross fare as a platform service fee, with most drivers experiencing an effective take rate near 25%. The exact percentage varies by market, trip type, and active promotions. On very short trips with minimum booking fees, the effective platform take can approach 40%.
What are deadhead miles and why do they matter?
Deadhead miles are miles driven without a paying passenger — traveling to pick up a rider or repositioning after a dropoff. These miles generate zero revenue but accumulate real fuel and wear costs. On average, rideshare drivers deadhead about 30–40% of total miles driven, significantly reducing true earnings per mile. All miles — including deadhead — are deductible under the standard mileage method.
How does self-employment tax work for rideshare drivers?
Rideshare drivers are independent contractors and pay self-employment tax of 15.3% (12.4% Social Security + 2.9% Medicare) on 92.35% of net self-employment income. This is equivalent to what both employer and employee would pay in a traditional job. You can deduct half of SE tax from your adjusted gross income, and the mileage deduction further reduces your taxable net income.
Should I use the standard mileage deduction or actual expenses?
For most rideshare drivers, the IRS standard mileage rate of $0.70/mile (2026) is simpler and often more generous than tracking actual expenses. Actual expenses (fuel + insurance + maintenance + depreciation × business-use %) may win if you drive a gas-guzzler or have unusually high insurance costs. You must choose one method per vehicle per year — standard mileage is the default recommendation for most gig drivers.
Does surge pricing significantly increase rideshare earnings?
Yes — surge multipliers of 1.5–3× during peak demand (Friday/Saturday nights, major events, bad weather, airport rushes) can increase hourly earnings by 30–60%. Strategic drivers who focus on high-demand windows significantly outperform average. However, surge pricing also draws more drivers onto the road quickly, so the window is often short. Combining surge timing with low-deadhead positioning near event venues or airports maximizes the surge benefit.