What Uber does and who uses it
Uber is a ride-hailing platform that connects passengers who need a ride with drivers who have their own cars. You open the app, request a ride from your location, and a nearby driver accepts and picks you up. The app calculates the fare, processes payment through your card or account balance, and both passenger and driver rate each other afterward.
Passengers use Uber to get from one place to another without owning a car or hailing a taxi. Drivers use Uber as a way to earn money by driving their own vehicle on their own schedule. Uber operates in most major cities across North America, Europe, Latin America, Asia, and Australia, though availability and service types vary by location.
The platform is not a taxi service — Uber does not employ drivers as staff. Instead, drivers are independent contractors who use their own cars and set their own hours. This distinction matters for how much drivers earn, what protections they have, and what happens if something goes wrong during a ride.
Key Takeaways
- Uber charges passengers a base fare plus per-minute and per-mile rates that change based on demand; surge pricing raises fares during busy times.
- Drivers keep roughly 75 percent of the fare after Uber's commission, though this varies by city and service type.
- You need a valid driver's license, insurance, and a car that meets Uber's age and condition requirements to drive; the background check takes one to two weeks.
- Passengers and drivers can both cancel rides, but cancellation fees apply if you cancel after the driver has started heading to you.
- Uber's insurance covers passengers during rides, but driver coverage depends on whether the app is on, off, or actively carrying a passenger.
How fares are calculated and what you actually pay
Uber charges passengers using a formula: a base fare (the starting cost), a per-minute rate (time spent in the car), and a per-mile rate (distance traveled). The base fare, minute rate, and mile rate all vary by city and by service type — UberX is cheaper than Uber Comfort, which is cheaper than Uber Black. You see the estimated fare before you request the ride, though the final amount may be slightly higher or lower depending on the exact route the driver takes.
Surge pricing is Uber's term for raising fares when demand is high and few drivers are available. During rush hour, bad weather, or late night, fares can double, triple, or go higher. The app shows you the surge multiplier before you request — for example, "1.5x" means the fare will be 50 percent higher than normal. You can choose to wait for prices to drop or pay the higher rate now.
Passengers also pay tolls, airport fees (at some airports), and service fees that Uber adds on top of the base fare. A service fee of 15 to 20 percent is common. Tips are optional and added after the ride ends through the app. Drivers do not see your tip until after the ride is complete, so tipping does not affect which driver accepts your request.
How drivers earn money and what they keep
Drivers earn money from fares and tips. Uber takes a commission — typically 25 to 30 percent of each fare, though this varies by city and by how long the driver has been active. A driver who completes a $20 ride in a city where Uber takes 25 percent keeps $15 before expenses. Tips go entirely to the driver and are not shared with Uber.
Drivers pay their own car expenses: gas, maintenance, insurance, registration, and depreciation. They also pay self-employment taxes, which are higher than regular employee taxes because there is no employer splitting the cost. Many drivers find that after expenses, their actual hourly earnings are lower than the per-ride fare suggests. Earnings also depend heavily on location — drivers in dense urban areas with high demand typically earn more per hour than drivers in suburbs or rural areas.
Uber does not may provide a minimum wage or a minimum number of rides. Drivers can work as much or as little as they want, but they have no paid time off, no health insurance through Uber, and no unemployment benefits. Some cities have passed laws requiring Uber to pay drivers a minimum per-ride amount or a minimum hourly rate, but these vary widely.
Requirements to become an Uber driver
To drive for Uber, you must be at least 18 years old (21 in some cities), have a valid driver's license, and have proof of car insurance. Your car must be at least four years old in most cities (newer in some), pass a vehicle inspection, and have four doors and working seat belts. Uber does not accept vehicles with salvage titles or major damage history.
Uber runs a background check that includes your driving record and criminal history. The check typically takes one to two weeks. Drivers with serious moving violations, DUIs, or certain criminal convictions in the past seven years will be rejected. You must also provide proof of residency (a utility bill or lease), a Social Security number, and a phone number.
Once you are approved, you can turn the app on and start accepting rides whenever you want. You do not need to work a set schedule or a minimum number of hours. However, Uber can deactivate your account if your rating falls below a certain threshold (usually 4.6 out of 5 stars), if you decline too many ride requests, or if you violate Uber's community guidelines.
How cancellations work and what they cost
Passengers can cancel a ride at any time before the driver arrives, and there is no charge. Once the driver has accepted and is on the way to pick you up, you can still cancel, but Uber charges a cancellation fee — typically $5 to $10 depending on the city. If you cancel after the driver has arrived at your location, the fee is higher. If you do not show up and the driver waits more than a few minutes, Uber charges a "no-show" fee.
Drivers can also cancel rides. If a driver cancels before arriving at your location, you are not charged. If a driver cancels after you are in the car, Uber may refund your fare or charge you a reduced amount depending on how far you traveled. Drivers who cancel too frequently can be deactivated.
If Uber cancels a ride due to a system error or other issue on their end, you are not charged. If you and the driver cannot find each other and both cancel, you may be charged a small fee or no fee depending on how long the driver waited.
Insurance and liability during a ride
Uber provides insurance that covers passengers during rides. This insurance covers medical expenses and vehicle damage if there is an accident. However, the coverage depends on the driver's personal insurance and Uber's commercial policy, and the limits vary by state and by what type of accident occurred.
For drivers, insurance coverage has three phases. When the app is off, only the driver's personal insurance applies. When the app is on but no ride is active, Uber provides limited coverage. When a passenger is in the car, Uber's commercial insurance is primary, covering up to $1 million in liability. Drivers are responsible for their own vehicle damage unless the accident was caused by a passenger.
If you are injured during a ride, you can file a claim with Uber's insurance. If you are a driver and are injured, you cannot sue Uber for most injuries — Uber's terms require arbitration instead of court. Passengers can sue Uber in some cases, but the terms of service limit when and how.
What happens if something goes wrong
If a passenger leaves something in the car, they can message the driver through the app within 24 hours. The driver can choose to return the item or keep it. Uber does not mediate lost and found disputes, though some drivers are helpful and some are not.
If a passenger reports that they were harassed, assaulted, or discriminated against by a driver, Uber investigates and can deactivate the driver. If a driver reports that a passenger was abusive or refused to pay, Uber can deactivate the passenger's account. Both passengers and drivers can rate each other one to five stars, and low ratings can lead to deactivation.
If there is a dispute over the fare — for example, you think you were charged incorrectly — you can contact Uber support through the app and request a refund. Uber reviews the trip data and may refund part or all of the fare. If you were charged a cancellation fee you believe was unfair, you can also dispute it through the app.
Service types and how they differ
Uber offers several service levels. UberX is the standard option — any car that meets Uber's requirements. Uber Comfort uses newer cars with more space and better ratings. Uber Black uses luxury vehicles and professional drivers, and costs significantly more. Uber Eats is a separate service for food delivery, not passenger rides.
In some cities, Uber offers Uber Pool (now called UberX Share in some places), where you share a ride with another passenger heading in a similar direction and pay less. You may have to wait longer for pickup and the route may not be direct. Uber Green uses electric or hybrid vehicles and is available in some cities.
Availability of each service type depends on your city and time of day. During slow periods, only UberX may be available. During busy times, all options may be available. The app shows you which services are available before you request.
Frequently Asked Questions
Can I request an Uber if I do not have a smartphone?
No. Uber operates only through its mobile app or website. You must have a smartphone with the app installed, a valid payment method on file, and a phone number to receive ride updates. There is no phone number to call to request a ride.
What if my driver is going the wrong way or taking a longer route?
You can see the route on the app in real time. If the driver is deliberately taking a longer route to increase the fare, you can report it to Uber after the ride. Uber will review the GPS data and may refund the difference. You can also ask the driver to take a specific route before the ride starts.
Do I have to tip my Uber driver?
Tipping is optional. You can add a tip through the app after the ride ends, or you can tip in cash during the ride. Drivers appreciate tips, but you are not required to give one. The driver does not know whether you will tip before accepting your ride.
Can Uber drivers refuse to pick me up?
Drivers can decline ride requests before accepting them. Once they accept, they are expected to pick you up. If a driver cancels after accepting, you are not charged. Uber's terms prohibit drivers from refusing rides based on race, religion, or other protected characteristics, but enforcement is inconsistent.
How do I know if surge pricing is in effect?
The app shows the surge multiplier before you request a ride. If surge pricing is active, you will see "1.5x" or "2x" or higher next to the estimated fare. You can choose to request anyway or wait for prices to drop. Prices update in real time as demand changes.