The gig economy is now a part of everyday life. Job growth numbers factor it in, and economists have established an obsession with trying to access the long-term power of someone being able to plug in for a moment and then drop out when they feel like it.
What many people assume though, is that for folks driving for Lyft or running errands for Favor, these jobs are their only income stream.
For a lot of people, this assumption couldn’t be further from the truth. Lots of people in the gig economy have full-time jobs but are using these additional income streams to pay off their bills. One of the biggest reasons folks get behind the wheels of their cars and pick up the groceries or the dry cleaning is simple: picking up gigs is an easy way to hack down student loans. A whopping 28% of drivers under 30 use ridesharing as a means to pay off their student loans.
GET YOUR RIDE ON
By adopting the famous Uber promise of “make at least $500 a week guaranteed” people are getting off work and turning on their driver apps in hopes to chip away at the mountain of debt in their lives that won’t go away. What’s worse, is that while most of us have debt due to owning a house, or a swollen credit card bill, there aren’t a variety of programs like Credit Karma or refinancing your home when it comes to student loans. Once you’re saddled with that payment, you’ve gotta pay it every month.
The average Lyft driver makes around $20 an hour, depending on the length of their day. In today’s economy that’s pretty good money for driving around town. For new graduates, that’s fantastic money. When you’re first out of school or have a degree in something that finding a job takes a little bit longer, the job market can get real tight, real quick. It’s not uncommon for working professionals, or the barista at your local spot have between 30-60K in student loan debt thanks to a crooked system of borrowing – and yet, somehow they gotta pay that debt off each month or risk default.
Because drivers make their own schedules, they’re choosing to pull a few hours a week. Nothing over the top, but enough to put all of that money away and into an account specifically to pay off more than the minimum due. Picking up around ten rides a week allows the drivers to get ahead of their bill and then move on toward bigger goals like buying a house or a better car. 31% of Uber drivers use the ridesharing app to make their house payments, proving that the side hustle is strong.
WHEN SHOULD A DRIVER GET BEHIND THE WHEEL?
The hottest times to drives is if an event is happening in town. People hate parking. Nine out of ten times, it’s easier to get dropped off than it is to deal with parking at any major event. Another great time to work is the weekend.
Because no one likes drunk drivers, the demand for ridesharing is through the roof. By working one weekend in a major city, that’s rent. And for enterprising drivers, that’s a major dent in their loans.
YOU’LL NEED A PLAN
If you’re already working and trying to maintain some semblance of a social life, you’re only going to pick up rides part-time. Because you have limited time out there, it’s important to set a realistic goal of what you’re trying to pay down a month. Start small because you don’t want to burn out. Remember, you’re already working a full-time job. If you can set a goal to earn $150 a week with ride sharing, that’s $600 toward your loans. Luckily, the interest rates are usually pretty low on the loans, so the typical payment is around $250 a month. By paying it off with more than double the amount, you’ll be making waves in the principal amount.
An easy way to get this money is to stick to a schedule. Don’t deviate from it, keep your weekend mornings open for folks on a coffee run or seniors heading to church. If you work during rush hour, then make sure you’re consistent, so it becomes routine. Because the money you’re making is more or less “extra credit” vs. income you need to live on, you’ll see it pile up, and when you make that big payment, it’ll feel good to see your ugly number drop each month.
FORGET BRAND LOYALTY
If you’re looking to make money, you can’t rely on one income stream. Grocery stores are doing home delivery or in-store personal shopping. Favor or Task Rabbit pick up and deliver just about anything you need. When it comes to ridesharing, there are the two giants in Lyft and Uber and a few smaller players like Fasten. Don’t rely on just one of these platforms, get them all. If you feel like going shopping for someone for a few hours, do that. If Lyft isn’t popping off, switch over to Uber and see what their patrons are up to. You’re in control of your financial destiny.
In the end, it’s all about how hard you want to hustle. You can’t work your regular 9-5 and then try to cram in 70 hours of ride sharing. You’ll go insane, and you’ll end up spending way too much time at the McDonald’s drive-thru. There’s an adage that’s been around forever, and it’s right in this case: marathon, not a sprint. Your loans will take some time to chip away at, but if you’re diligent and stick to a plan, you’ll make an impact, and it won’t come out of your regular check. Besides, you’ll get to meet some cool people in the process.