Are Uber rentals for Getaround Worth It?

Uber has finally figured out a way to convince people to pay them to have the privilege to drive. I’m Christian of The Rideshare Guy, and today I’m going to talk about Uber and Getaround’s partnership where anyone can pay $5 just to rent a car to drive for Uber. I went out and I rented a couple of Getarounds and did some shifts on the road just to check it out, see how the program works, if it’s any good.

Take a look at the video below all about Getaround rentals for Uber, or scroll to the video transcript if you prefer to read.

First impressions with a Getaround rental for Uber

The first impressions I had of it was that getting set up was very easy, so I was able to get into the Uber app and then click on Reserve a Rental, and then go through the whole sign up flow within about three minutes. I was pretty impressed by that.

Some of the examples of cars you get through the Uber Getaround partnership is the 2016 Prius, Camry, Jetta, Chevy Cruze if you like those. Remember gas isn’t so much a concern here because they pay for the gas, so every car, when you get into it up in the top left hand visor, the driver side visor, there’s a gas card in there. You can use that gas card to fill up your rental and all that fun stuff.

My experience with Getaround rentals

The first rental that I got, it was a mule. Nothing you would be showing to your friends. “Look, I got this new car,” right? I showed up. I got up at like 4:00 a.m. on a Monday morning, so maybe this thing just got beat over the weekend. But this car was dirty, so this picture here isn’t even a picture of the seats from this ugly guy. It’s from the next car I got, but I want you to imagine this like five times dirtier, and then in the front and the back seat. It looked like, people were giving birth in this car! I couldn’t get a good picture of the scene because it was dark out.

I found that testing different cars helps a lot, so if you go to your first car and it sucks, then just try to check out another car. The second car I went to was much better. It was a brand new Toyota Corolla. The first car I described as having a faint smell of month-old urine mixed with Little Trees New Car smell. I’m giving like 6,000 rides now and I know exactly what that smells like, and I have a feeling a lot of you do too.

Big perk: Gas, maintenance and insurance are included in your rental price

Gas, maintenance and insurance are included in the $5 per hour. It’s pretty good because when you’ve looked at all the studies that have been done, most of those come out to say that operating a car for Uber costs about $5 an hour. So for just $5 an hour, you get all the headache of dealing with a car included. It’s not a bad deal on the front end of the money. But as I’m going to get into in a second, there are some catches.

When you do get your rental, make sure you inspect it. Like, go full CSI. I took pictures of all the outsides and insides, and I took notes in the app of anything that looks wrong. I try to pretend like I’m just trying to protect myself from getting like the next guy coming along and complaining, so I make sure I take good notes. If you’ve been a Lyft mentor way back in the day, I know many of you probably don’t know what that is now, then just perform a mentor inspection. And yes, by old school mentor standards, most of these cars would fail.

Here are the fees Getaround may charge. There’s a list on the site here, but if you smoke in the vehicle, they’re going to charge you $500, so don’t smoke in your rental. I know that sounds obvious, but some people need reminding. If you leave it dirty, they’re going to charge you $45 bucks. If you leave it super dirty, $100. Late return fee, is $50 an hour plus the normal hourly rate. Now, the cool thing is if you can rent longer, the app did send me a notification saying, “Hey, do you want to extend your rental two or three hours?” It turned out the second night I did want to because I was having a pretty good night. I was making good money, and I said, “Yeah.” I did, and so that’s nice.

Be careful about returning the car. Avoid long rides near the end of your rental period

The one thing that is a little annoying though, is because you’re renting this by the hour, depending on where you end up going, you kind of have to plan around that. If you’re getting to towards your last hour on the rental, I’d definitely avoid trying to get a long ride unless you can extend the rental. Of course, what will probably happen is if you rent until 11:00, sometime around 10:45 you’re going to get a 6X surge some place 100 miles away. If you do get some sort of unicorn ride like that, make sure you check the app. I know you’re excited. “Oh my god. I’m getting 6X. I’m going to New York.” Go in there and just make sure you’re extended, because otherwise you’re just going to give that money to Getaround. You’d be really mad, but I told you.

Is renting a car for Uber with Getaround profitable?

Should you do this? Is renting a car profitable? Yes, sort of, mostly. If you get a bad session, like the first session I got, it was a Monday morning on a holiday three-day weekend. Nobody is in the city. I only made like $50 bucks and then I paid like $25 for the rental. That was a really bad time. Now, the second session I did on Monday as well, but I did it in the afternoon and things were busier. I made $138.44 over six hours, and of that I paid $31.20 in rental fees, so it ends up coming out to $106.94. I wrote it down. Aren’t I smart?

You aren’t eligible for promotions when you use a rental

The problem is with doing this long-term, so let’s take a look at like why you don’t want to rent long-term. Now, upfront here you can only collect while you drive the organic fare, so that’s what Uber is paying out on your fares, and any tips, and we all know nobody tips, so you’re basically only getting organic fares. You don’t get quests, you don’t get boosts, you don’t get promotions. Quests, boosts, or promotions can be anywhere from 25 to 35% of my weekly pay, so that’s a pretty big deal considering that at 25-35% boost in your top line and net pay is probably as much as 50% in your take home profit. If you get a 25% pay increase for doing the same amount of work and driving, then it’s a lot more because of the expenses coming out. I don’t know if I said that really well, but I think you get the point, or at least I hope you do.

You miss out on deductions with rentals

There’s also a tax disadvantage, so in addition to not being able to earn the bonuses by renting, when you rent you have to deduct the rental fee and any actual costs to run the business. Now, the double-edged sword of Getaround’s being kind of cheap and covering gas and insurance is that the only thing you end up really getting to deduct in this scenario is the rental fee. The second time I went out, I would have been able to deduct $31.50 cents for the rental fee. I can’t deduct gas and other things because Getaround is paying for that, so that’s under the actual expenses method. Now, if I owned or leased the car, I could use the standard mileage deduction, which means for every mile I drive I can deduct 54.5 cents in 2018. Now, that would have ended up coming out to $52.96 for the miles I drove.

Now, that seems only to be a $21 difference in deductions, but over the course of the year that’s several thousand dollars that you would otherwise not have to pay in taxes, so it’s a pretty big deal. When you own a car, you’re making more because you get quests, boots, and promos, but you also pay less in the tax scenario because you can take the standard mileage deduction. That usually ends up beating actual expenses by a pretty significant portion, as we saw here. By the way, so yeah, track your mileage and expenses. Use something the QuickBooks Self-Employed or Stride Tax. I have the Stride Health. They got me health insurance where they helped me sign up for it. It was pretty cool.

You have to think about how you’ll transport yourself to the rental car

Another cost with this is getting to your rental. How are you going to get to this thing, right? Are you going to walk? Are you going to drive? Are you going to ride a bike? Are you going to call another Uber or Lyft? You know? So that might be an expense to take into account here, and that also eats into your reservation time and your coming home time and stuff, so there’s kind of these high switching costs, which I could see over the course of time adding up.

Now in my case, I just walked. I think I walked about a mile to my rental and a mile back. It actually was sort of cool because I went and drove, and I spent six hours sitting in a car, so when I’m done my legs always feel absolutely terrible. I walked a mile home afterwards and I felt pretty good. I went right to sleep. My legs didn’t hurt, or my back, so I don’t know, maybe it’s a little nice that we can walk to our car.

But I would be smart about renting. The big key here is if you’re going to rent, try to make it a short-term solution. Try to use it for a backup if your car is in the shop or you want to test the waters as a new driver. Let’s say you want to sign up to drive, but you don’t have a car or you don’t want to commit your car to Uber passengers. Go rent one from Getaround’s. Give it a try. See if you like it, and if you don’t like it, then you don’t have to deal with these high startup costs to get into this.

Until next time. Like, comment, subscribe. Keep the wheels on the ground, your eyes on the road, not on your cellphone. Be profitable. May your next ride be on surge or PT.