How Uber Works: Everything You Need to Know

Do you know how many times I’ve been asked: “what is Uber?” Exactly zero times, because everyone and their brother know what Uber is. How Uber works, on the other hand, is a totally different matter, and I get asked this more often than you may think.

What is Uber

Uber is a ride-sharing platform that connects riders to drivers through a mobile app. Think of it as a private taxi service. Instead of calling a taxi, people are increasingly electing to call an Uber.

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Uber has over 8 million users and has fulfilled over 1 billion rides across the world in 400 cities. On a daily basis, Uber facilitates 1 million rides.

Uber was founded in 2009 by Travis Kalanick and Garrett Camp and is now available in over 40 countries. As of its latest valuation, Uber was worth over $60 billion.

Recently, the legality of Uber has been challenged by lobby groups and governments. Today we are simply going to talk about how Uber works, and ignore the regulatory debates.

Are Uber drivers employees? Are they a taxi service? Should they be required to buy a license? These are all valid questions, but are not for the discussion today.

How Uber Works

So how does Uber work? Uber is an on-demand ride-sharing application which runs on both Android and iOS devices. Once you have registered with the application as a rider, the app connects you with drivers in your particular area.

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Those drivers are using their own personal vehicles to drive you from one location to another for a predetermined fee based on Uber’s pricing algorithm.

Within the Uber app, you can see information about your particular driver, including their rating and the type of vehicle they drive before you accept a ride.

In the app, you also can input your destination and it will give you a fair estimate before you confirm the ride. Your trip ends when you arrive at your destination.

The app will, based on location data, know that you have arrived at the end of your fare. After this, you leave the car. No money is exchanged, and then both the rider and the driver rate each other.

Both the driver and the rider rate each other based on a scale from 1 to 5. This helps ensure accountability across the Uber platform for both riders and drivers.

When demand is high, riders are subjected to what has been referred to as ‘surge pricing’. This means you will likely pay a higher amount for your ride.

Uber has now introduced the concept of splitting fairs, where you can split the fair of an Uber ride with other passengers.

Registration for the Uber application as a rider is straightforward and can be done within minutes. To register as a driver however, is a bit more complex and requires you to fill certain requirements.

How to Make Money on Uber

In order to start as an Uber driver, you need to be at least 21 years of age, have a car model that is 2000 or newer, and pass a background check. In some cities, the requirement for vehicles is 2005 or newer.

On average across the U.S., Uber drivers gross about $19 an hour. But again, this varies depending on your hours worked, your city, and the type of vehicle you own.

Compared to the taxi industry this rate is high. Taxi drivers only earn on average $13 an hour, so much less than the Uber driver.

Your hours of work depend on when you choose to drive with Uber. It’s totally up to you. Uber won’t call you up at yell at you like an angry boss!

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Uber drivers tend to overwhelmingly be males with only about 15% of Uber drivers who are females. They also tend to be younger than the average U.S. demographic with the majority being between 30 and 39 years old.

A majority of Uber drivers, 51% to be exact, work 15 hours a week or less. Only 19% of Uber drivers consider it a full-time job. So Uber is a great part-time income source for most drivers.

This is how Uber works. Whether you use it as a substitute for taxi’s or for supplemental income, there’s no doubt that Uber is here to stay.

For more Uber information, check out the following articles:


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Glenn Carter is a family man, investor, and full-time employee (in that order) who makes side income through various sharing economy platforms, real estate, and small businesses. He takes his income production seriously, well, casually. Glenn has been making serious money, casually, for years and wishes to help others do the same. Insert fancy credential here. Shameless plug from famous figurehead. Glenn has learned from the best in the entrepreneurial world that you don’t need silver bullets to become wealthy, you only need discipline and action.  Glenn is here to help you with the latter.

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