Is it worth driving for Uber in Australia?

 

For quite a while, the most popular country of birth of Taxi drivers in Australia have been India. The lack of  barriers to entry  being the prime reason for the Indian influx to taxi industry. The Indian diaspora here always found it difficult to land in well-paying jobs; generally blamed on racist undercurrents. But the situation is fast changing as the Indian population here skyrockets and the white population getting used to the Indian mannerisms.

 With the entry of Uber, the conventional Taxi industry is dying a slow death. To survive they have to either emulate the Uber way or make them attractive to a specific segment of taxi riders.  The scope of this article is to provide enough information for those planning to become Uber drivers. We have done our research; some of us even became Uber drivers  for the purpose . We also took the pain to take multitude of Uber rides to talk to the Uber drivers to understand the challenges they face. Here are the facts we found about Uber. We will make it like a Q&A section so that we can address the very questions that you would like to ask. This article is prepared for wannabe Uber Drivers in Australia. But we have done our trials in Melbourne and the data we have given here is exclusively Melbourne based. It is going to be more or less the same in other Australian capital cities too.


The setup costs


You need the following documents to become a Uber driver in Australia They are Driver’s License, Driver accreditation Certificate (Optional), Passport or Birth Certificate and a criminal history check certificate. The costs associated will come under $200.

If you are continuing it as a business and not as an occasional ride share, you need to register for an ABN and GST through the Government’s business portal. The costs associated with can be found from the ASIC website or the Victorian Government Business portal (If you are in Victoria, otherwise look for information in your respective states) . Once you become a Uber driver you will have to submit BAS (Business activity Statement) at specific intervals to the ATO. If you require professional help for this, you have to consider related expenses. It is easy as 1,2,3 and can be done with the click of your mouse at the comfort of your home.

You will find detailed information on, how to become a Uber driver in their website. The process we describe here is solely for the purpose of estimating the costs associated with it.

You need a car that is less than 10 years old in fairly good condition. Uber will inspect the car prior to approval. The car needs to be insured and you have to upload the insurance certificate for approval.  Please note that some insurance companies will charge more if you are using your car for Uber.

If you don’t have a car that is less than 10 years old, you have the option of renting a car through Uber approved car rentals. The weekly rent will cost you anything from $260 to $350 depending on the car. You are supposed to  rent the car only though Uber approved rentals and not the one of your choice. If you are renting your car, ensure that you are going for an unlimited Kilometres plan. If not, once you cross the Km limit,the extra you need to pay for each Km you drive, will eat into your earnings. A fuel efficient car is another necessity.

With rentals you can drive a near brand new car in a perfect condition and don’t have to worry about maintenance and other stuff. You can drive with the confidence that only a new car can offer. But the rental companies will charge extra daily administration costs for road tolls, if you incur one, which usually comes under $4 for a day. In the event of an accident, apart from the standard excess, you will have to fork out another $500 – 600, depending on the rental provider.

A good quality Mobile phone with sufficient data to run the Uber application will cost you atleast $75 per month for a free phone plan.


Can I make a living if I become a full time Uber driver?


The answer depends on your life style and your house hold expenses. Uber is a good option if you are unemployed and you need an income until you find a job or if you are semi-retired. The other categories best suited for becoming Uber drivers are Students, the self-employed who need some extra income with lot of flexibility, and the financially struggling  who can’t commit for a second job but happy with a flexible working hour option. The advantage with Uber is that you can drive round the clock at your convenience and availability. We will leave for later to explain whether Uber is good as a full time occupation.


How much can I earn with Uber?


We will take the rental car option first.

In Melbourne, if you are living in any of the inner suburbs, you will make around $23 –

24 an hour before expenses on an average. For a 38 hour a week your earnings will be

 Total earnings for the week – $912

Deductions

Car rental      -$ 300

Tolls               –  $40 (Approx.)

Petrol             – $120

GST                 – $70 (After deducting the GST Credits from Petrol etc.)

Your Weekly earnings before Personal Income Tax –   $382

As per the calculation above, your before tax earnings stand at $382, which takes your per – hour earnings  to $10.05. Australia’s current minimum per hour wage is $18.29 for a permanent employees and for casuals it is $20.24 gross.   If driving Uber is your second job at least around 30 percentage of your earnings will be claimed by the ATO. If you wish to be an Uber Driver you should possess an altruistic mind apart from a hardworking nature due to the peanuts you earn for the effort you put.

Now consider that you are driving your own car which you have bought for your driving pleasure. No loan on the car and you are a happy driver and would like to spend some time everyday chatting with people. With 38 hour driving a week, you will rake up around 60000Km a year which will seriously affect the value of your car. Add extra maintenance and wear and tear replacement to it. But you still will be much better off than paying $300 a week in rentals.

If you plan to buy a new car for the purpose taking a car loan, should consider the car depreciation, Maintenance and Service charges along with other expenses like Car loan interest and the Car insurance. The weekly car write off expenses will come around $180 which is much better than the $300 we have calculated for the rentals. So your weekly earnings will be more than the above calculated amount

Coming back to the “ Can I become a full time Uber Driver?” question – The answer is – “not advisable”. You may exceed the $24 an hour we have calculated, if you work on Friday and Saturday Nights. But there is no guarantee for that. On an average your weekly earnings will not go past the $24 we have calculated. If you are living in the fringe suburbs you may earn much less. Before you jump on to the Uber bandwagon take a few uber rides and ask your local drivers , whether  it is worth taking the plunge?


What Uber drivers told us


Earlier I had mentioned that we have taken more than 50 Uber rides across Melbourne to meet with the drivers.  Every single driver we encountered, had only positive experiences about Uber. They all said,they love it and make good money out of it by driving especially on weekends and during surge times. We were about to end our research in good note, then one of us met Dinesh Panicker (name changed), an Uber driver with nearly one year of driving experience. He advised us that, no driver will tell their actual opinion until we ask them specific questions, that too  after gaining their confidence. Since then we did just that. Below are our findings

Most Uber drivers carried the opinion that Uber is a nasty company to work for. The Uber driver application allows Uber to set different settings for each driver it seems. Many complained that for months they got only unprofitable trips like driving 4km to pick up some one to drive 2Km and their earnings though in Inner city came an average of only $22. We heard a lot of complaints about Airport trips, after which they don’t get any pickups from arrivals which are reserved for Uber Black (luxury) . So Airport trips involved a lot of idle driving after the drop off.

The other complaint we heard was about the rating system, which many carried the view that Uber manipulates it and keeps drivers at lower ratings deliberately (These are unsubstantiated opinions of Uber drivers). In Melbourne, if the ratings go below 4.4 Uber De-activates the driver. For the first deactivation, Uber asks you to undergo a training before re – activation. The training is given by private parties which costs around $70 for one hour which most drivers described as Uber’s rip off training suggestion. This $70is charged for giving just this information.

1.Greet the riders.

2.Offer them water and mint

3.Be helpful.

4.Keep the car neat and tidy and dress professionally.

Many drivers felt that Uber has a responsibility to give the training themselves free of charge instead of allowing this rip off .  The first deactivation they considered as a deliberate ploy to help those private providers.

Apart from that, Uber’s poor Driver support methods came to our attention. There is no direct phone line to contact Uber for support. You can contact Uber through their application help tab for which they charge $10 each time. Another big rip – off remarked a driver. The only other option is to visit their office.

But there were drivers who put good words for Uber .  A few we met confided that, they make around $800 before expenses  by driving on Friday and Saturday Nights and Sunday – but long shifts.  Its been a good extra money to cover the sky rocketing living expenses in the city. But driving on Saturday and Sunday nights have its pitfalls too. One should know, how to handle the mostly drunken, unruly passengers of the weekend. After all this is a country where Rum was the currency once.

Is it worth driving for Uber?

U decide.

 


Update

NB: Now Uber drivers can pickup customers from Airports in Melbourne, Sydney and Adelaide


 

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