The Economics of EVs for Rideshare Drivers
By: Ed Davis
Tags: Sustainability, Side Hustle, Electric Vehicles, Uber, Rideshare

🤑💰💚 I make more money driving an EV for Rideshare compared to an ICE driver and it feels amazing!

I left my job this summer. Feeling burnt out selling technology to retail companies, I felt that my work wasn’t serving any compelling purpose other than to make money. Money is great, but I felt like I could no longer get motivated without some deeper meaning in my work.

I am used to being frugal when I need to be, and with a good amount of savings and no debt, I felt secure enough to just walk away for a while and give myself space to find something more impactful and positive for society and our planet..

Luckily, one of the things I had purchased last year that I had a hunch would bring me immense value and joy, was a low-range Electric Vehicle (2017 Nissan Leaf S — 30kWh battery).

My girlfriend’s car was totaled and she needed to get to work, and I worked remotely from home. I was curious about EV’s, so we crunched some numbers such as her daily commute requirements and the expected total cost of ownership vs a gas vehicle, and it looked like a no-brainer, especially since we already have a gas guzzling Chevy van that we use for long road trips.

Quickly browsing through nearby used EV listings, I found a 2017 Nissan Leaf with 30,000 miles, a good battery pack with 92% of it’s original capacity, and the dealer even threw in brand new tires. We bought it in December 2020 for a total of $11.5k including Washington State sales tax.

One thing I highly recommend when shopping for a used EV, is an OBD2 reader and an app such as LeafSpy that let’s you check the car’s data readings — especially battery pack health (SoH). It’s good to know exactly what you’re buying. A mal-intent seller can actually reset the battery health gauge in the Nissan Leaf — so it is essential to check for this with an OBD2 reader. The reader recommended by LeafSpy and the one I used is the LELink Bluetooth Low Energy OBD2 Car Diagnostic Tool (affiliate link).

More on the battery pack, the good news is that Nissan has recently changed their warranty so that any Leaf battery is covered from a drop in 4 bars or more of battery state of health, as read on the dashboard. There are a few qualifiers, like you must do your scheduled services at a dealer, and your car must have the latest Battery-Management System (BMS) software update, which ensures accurate SoH readouts. You can read more from other’s experience on battery warranty claims in the Leaf Forums.

Fast-forward to a few months after I left my job and I wasn’t getting any offers, so I began the lengthy but reasonable process of registering to drive for Uber in Seattle and King County. KC requires that you get the vehicle inspected by a certified mechanic. The guy said he “barely even has to look at the Leaf, there’s not much that can go wrong with these’’. Then pass a city knowledge test and a defensive driving course before allowing you to drive for Transportation Network Companies or TNC’s.

Once I got through the process, gave the car a thorough cleaning inside and out (my girlfriend had gotten it filthy as she works outdoors mostly in and around dusty farms), and I was accepting rides later that day.

To my joy I realized that my marginal costs are much lower than any other car — even the Prius, which are nearly ubiquitous in the rideshare world. Whether I am charging at home, where my electricity cost is ~$0.11 per kWh; or fast-charging at a network like Electrify America, where electricity is ~$0.35 per kWh, I am still paying far less than what even a Prius costs in gas per 100 miles (gas in Seattle is hovering just above $4/gallon as of September 2021). Sometimes you can really hack it and charge for free at a Nissan dealer or some grocery stores like Safeway or Walmart!

On top of gas savings, my annual maintenance costs are much lower — no oil changes, brakes get less wear due to regenerative braking, no gaskets or belts to crack, etc. And the final kicker in the equation of course, which most forget when calculating rideshare profits, is depreciation.

In general, you want to spend as little as possible on your vehicle, while still having it be comfortable, safe, and reliable, to maximize profit driving for Uber, due to the fact that a new vehicle depreciates much faster than a used vehicle. So back to my purchase price, $11.5k all in, which is around $5–10k less than a similar mileage and year Toyota Prius in the Seattle area market.

Now, the jury is still out for how EV’s will actually depreciate, but as I mentioned above, the battery is under warranty for 8 years/100k miles, so it should still have plenty of capacity left until 2025, or Nissan will pick up the tab on a replacement. But even if the thing is completely worthless in 5 years, (which it definitely won’t be), the lower purchase price gives you a comfortable margin to keep losses to depreciation low compared to the Prius, which of course do hold up quite well.

There are two-other soft factors that make used low-range EV’s perfect for rideshare drivers: planned downtime and rider comfort.

“Planned Downtime”, to borrow the phrase from the software world, is usually scheduled maintenance and improvements that are expected and accounted for, and necessary for the continuous improvement of the system.

Now, while many do so as a career, most Rideshare drivers are people in between jobs, looking for some extra side income or are looking at this as a temporary phase of their lives while they work toward the next big thing. Many are pursuing education or other self improvement, which requires focused uninterrupted time.

Having to charge every 100 miles or so is perfect for this — it gives you a chunk of time to check your email and follow up with recruiters, watch a few lectures for an online course, or necessary human functions like bathroom breaks, food, etc.

It takes me about 3–4 hours of urban driving with occasional hopping on the freeway to get down to 25% (about 20 kWh of electricity consumed), in which case I either head home or head to a fast charger. Combined with guilt-free idling (since the Leaf doesn’t burn anything or consume much charge when idling between rides) this gives the driver a lot of downtime to work on other things. The Leaf has become my mobile self-improvement Dojo, and for me it has been the perfect balance where I can take breaks and get some other things done and not grow too weary from driving constantly.

Another point I want to bring up is rider comfort. Let me start off by just saying that nearly every single rider I pick up comments positively about the Leaf ride experience. At first it seems small and funny-looking, but it’s actually quite roomy when you get in, and the ride is butter-smooth and quiet. Many riders talking on the phone or working appreciated this, and many as the ride ended said out loud “I love the Leaf”! I don’t have the data to compare this to non-EV rides, but I felt I was getting a lot of generous tips too!

Notice I haven’t even brought up the environmental impact yet, while I do think it’s important, I don’t think it’s fair to push the burden on rideshare drivers to have this as a major consideration, since driving for rideshare is tight operation and any extra money spent on the vehicle is cutting into your hourly earning potential (à la depreciation), and there is enough burden already dealing with many hidden costs of operating your own vehicle. So I wanted to make the point that driving a low-range EV for Rideshare can be an excellent economic decision on it’s own.

I have to say though, it does feel satisfying that every ride I take is helping save a small but tangible amount of gasoline burning and CO2 release. In fact, studies have shown that rideshare contributes to 50% more emissions than driving your own car — due to the idle time between trips, drivers are spending 42% of their time driving without a rider.

Every driver who gets on board the EV gravy train is saving roughly 10 tons of CO2 emissions annually!

Assuming an average Rideshare driver puts in 700 miles per week, with 2 weeks off , we get 35,000 miles per year. To lowball our estimate, we’ll use a Prius in comparison, which gets roughly 50 miles per gallon, so 35,000/50 = 700 gallons per year. A quart of gasoline burned (including the hidden footprint of extraction, refining, and transport of that gasoline) accounts for 6.9 lb of CO2 equivalent** — or 27.6 lb per gallon. 700*27.6 = 19,320lb or 9.66 tons.

I can confidently say that my time spent driving is serving a higher purpose, while getting people where they need to go in comfort and with zest!

Thanks for reading and please let me know in the comments if you have any thoughts, corrections to my calculations, or if you are thinking of buying an Electric Vehicle specifically for Rideshare driving, I’m happy to help you with the process.

Reference:

** How Bad are Bananas, Berners-Lee, 2011, p. 89 (affiliate link)