There are so many gig options today and Uber can be a great chance to pick up some extra cash or make a full-time living driving around your city. But will driving for Uber violate your car lease agreement? If you follow the terms and lease from a carsharing service rather than a standard dealership, then you should not violate your agreement.
The good news is that Uber doesn’t mind if you use a leased car if it meets Uber’s vehicle requirements. Keep in mind that driving a leased car for ridesharing purposes can affect your insurance policy and dealership’s lease contract. Before jumping into the car and picking up your first passenger, it’s a good idea to read the fine print and check with your insurance provider.
Any issues with using a leased car to drive for ridesharing purposes typically stem from exceeding the mileage or purpose listed in the agreement. Here are three things to consider when determining if it will violate your car lease terms to work for Uber.
- It depends on the company and if it is a standard dealership or a carsharing lease service.
- Driving without rider insurance will violate lease terms.
- Exceeding the maximum mileage in the agreement (some policies cap this at 12,000 miles) will violate the lease and you will end up paying sky-high rates that can quickly eat up profits that you earn from Uber.
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How to Know If Driving for Uber will Violate Your Car Lease Agreement
Is It a Standard Dealership or a Carsharing Service?
Since you don’t want to end up with insurance issues or extra rates, the first thing to do is read the entire rental agreement. This can let you know upfront if participating in a ride-sharing service will violate the agreement. This will protect you from lease violation if the dealership discovers that you drive more than usual and with people who are not listed on the policy.
If you lease a car from a standard dealership, you will likely have to agree to terms that make it difficult to drive for Uber without accidentally violating the agreement.
If you use a ride-sharing lease service, these are much more suited to driving for Uber. While it’s always advised to check each company’s terms, you are less likely to violate any carsharing lease terms by picking up passengers and driving a lot of miles during the contract.
Get Rider Insurance
Since Uber does require its independent contractor drivers to have car insurance, you want to ensure that your rented car is covered. It’s best to get commercial insurance so if there is a claim from damage or an accident, insurance will cover it.
If you choose not to get rider coverage, your insurance provider can drop you. You may then face paying for repairs out of pocket or having to make payments for a wrecked car.
Check the Lease’s Mileage Limit
One of the top things to check for in your lease is any mileage restrictions. While leasing a car is often cheaper than buying a car outright, you can’t Uber full-time with a standard leased car (typically 8-hour days 6 days per week) without exceeding the maximum mileage permitted.
It can be a Catch-22 if you stick with standard lease terms and do not exceed the mileage. While you won’t incur high rates, you also may be unable to accept enough rides to make sufficient money to cover lease payments, insurance, and any warranty-policy payments.
What to do Instead
Leasing a car from a carsharing service rather than from a standard car dealership is a great way to avoid violating restrictive leases when you drive for Uber.
One of the best options for a car lease is from a carsharing program rather than from a standard dealership. Rental companies like Fair car rental or Hertz, which partnered with Uber, offer unlimited miles and no long-term contract, which gives you the flexibility to drive for Uber.
All legitimate leases require rider insurance. Some Airbnb-type ridesharing companies like HyreCar offer gap insurance to keep you covered when you’re not picking up passengers and covered by rider insurance. Try out Maven, a service that not only gives you insurance coverage but lets you drive unlimited miles off into the sunset.
Conclusion
As an urban chauffeur, you want to ensure that you can freely earn money without worrying about lease violations. If you decide to use a standard car lease rather than a carsharing lease, pay close attention to mileage restrictions and ensure that you have proper insurance coverage.
As long as you do your homework and abide by stated terms, you should not violate your lease agreement by driving for Uber.
If you Uber as a side gig rather than a full-time hustle, any lease restrictions on mileage may not matter if you don’t rack up enough miles to violate the lease limits. If you want to make a full-time income from Uber driving, however, you may want to shop around for more innovative lease companies that offer flexible terms, rider insurance, and unlimited miles as you hit the road.
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