Should you drive or deliver for Uber in Australia? Things to know before you become an Uber driver

Should you drive or deliver for Uber in Australia? Things to know before you become an Uber driver

Are you thinking about driving for Uber or considering delivering on Ubereats?

If you own a car you don’t use often, you may have considered driving for Uber as a way to save money by offsetting the cost of owning your car, or to earn some extra income on the side.

The idea of driving for Uber is pretty appealing; you can set your own hours, you don’t really have a boss and hopefully get to have some nice customers to drive around.

But is the reality of driving for Uber going to match up to your expectation? What is it really like to drive for Uber? How much money do you make? If you’re interested in driving for Uber, or the new arrival to Australia, Ola, read on for the most important things you should consider before becoming a driver and we’ll share one other way to make money from your car you may not have thought of.

How much do Uber drivers earn?

According to a report by Jim Stanford at the Centre for Future Work at the Australian Institute, the average the net hourly wage (before personal income tax) of an Uber driver in Australia is $14.62 per hour.

Your income from Uber can vary considerably by the number of rides you receive per hour, what location you are driving in (ie a small town or inner city Sydney), and also the running costs of your car. Also, there are a few other ways you can generate income from your car that we'll share below.

According to David Rorsheim, Uber’s boss in Australia.

"Earnings change depending on what time people choose to log on," he told 7.30. When surge pricing automatically kicks in … the fare might be one-and-a-half, two times the normal rates. Drivers know this and the smart ones log on at the right times and the right areas and earn the big bucks."

What makes more money - delivering for Ubereats or driving for Uber?

If you’re wondering who makes more money, Ubereats or Uber, generally Ubereats delivery drivers are purported to make less than Ubers delivering people.

However, the flipside is since you can use a scooter or even a bicycle to deliver food your running costs can be significantly reduced, which could mean more favourable profits for you. It also is necessary to ask yourself when you expect to drive - if you are able to deliver around mealtimes, you may find Ubereats (or a similar provider like Foodora or Deliveroo) is better for you due to the increased demand. If you’re using a bicycle, it is a great way to get fit and earn some money at the same time!

You need to be absolutely meticulous about tracking your km’s and expenses

Uber’s goal isn’t just to compete against the taxi industry on price as they are already much more affordable, their goal is to compete with the link cost of owning a car. The flipside of this is that as they continue to cut prices, drivers wages are one way to make the rides cheaper for riders. It’s important if you drive for Uber to really track what you are actually earning to make sure you are not only breaking even, but also that you’re making a profit. You need to account for taxes, running costs, wear and tear; and most importantly the time cost of driving for Uber to ensure you are earning an income of at least the net $14.62 average.

If you are using a scooter or bike to deliver for Ubereats your running costs are much lower, so if you are tossing up between the Uber and Ubereats, it would be advisable to sit down and really calculate what your car’s running costs are.

Here are some handy suggestions on how to calculate your cars running costs.

What do I need to start driving for Uber?

A suitable, roadworthy vehicle

Types of Uber vehicle tiers

Uber has a few different vehicle categories for Uber drivers, you may have noticed these when you’ve booked an Uber yourself. There are different tiers for riders at different price points with each having different features:

UberX: The cheapest fare tier, with the least stringent vehicle requirements
UberSelect: A step above UberX, only certain vehicle models apply, and drivers must meet minimum trip counts and ratings.
UberXL: SUV and vans that can seat extra people, essentially a higher capacity version of UberX.
UberAssist: Vehicles that can accommodate disability aids (wheelchairs, walkers etc). Drivers will need to complete free training from the Australian Network on Disability.
UberBlack: Luxury vehicles from Uber drivers. You’ll need a commercial licence, and it has to be an approved Uber model.

Your car needs to be new, clean and well maintained

To drive for UberX, your vehicle cannot be more than ten years old and must seat four people plus the driver. You need to be at least 21 years old, have an unrestricted licence and be listed as an insured driver for the vehicle you’ll be driving.

At the other end of the spectrum, if you’d like to drive for Uber Black, the premium tier and with a higher rate, your car must be at seven years old or newer, have commercial vehicle insurance, be black, silver or grey and be one of the approved listed model types.

You’ll also need to be able to pass a background check (processes vary by city).

What kind of insurance do I need to drive for Uber or other rideshare companies?

  • Many standard insurance policies forbid drivers from using their car to carry passengers for profit
  • Uber's insurance may not cover damage to your own car
  • There are a number of specialist rideshare insurance policies available
  • If you already have comprehensive cover for your vehicle, you may be able to extend it to cover driving for Uber or other rideshare services - but you'll need to talk to your insurer before you hit the road.

Many standard insurance policies forbid drivers from using their car to carry passengers for profit - but much like how services such as Airbnb and Stayz opened up the home insurance marketplace for innovative products - ridesharing has opened up the door for specialist rideshare insurance policies.

Some designated insurance brands specialise in providing car insurance for those wanting to use their car for ridesharing. These policies cost roughly the same as your average car insurance policy and will replace your current third party or comprehensive policy.

Wait, doesn’t Uber cover me?

Yes and no. Uber does offer insurance products for its drivers, which can cover injury and property damage liability, but it’s important to be aware that this is a contingent insurance policy that works alongside your own personal compulsory third party (CTP) policy.

Don't have a car? You can deliver for Ubereats

If you’d like to become an Uber eats driver, the vehicle requirements are a little less stringent.

You only need to be 18 to start as a delivery driver for Ubereats, with a car that is a 1990 model or newer.

Alternatively, if you don’t own a car depending on the rules in your city you can also opt to deliver for Uber by bicycle, motorcycle or scooter. The motorcycle or scooter again has to be a 1990 model or newer and for cyclists, you need to ensure you are fit enough to be able to deliver the food.

Are there any other benefits of driving for Uber?

You can set the hours you want

Being able to set your own hours is fantastic, giving you the flexibility to work when you want to, however, depending on where you are located you may find you need to work during Uber’s peak times, like weekends and late at night in order to get enough rides to offset your costs of working. If you already have a different full-time or part-time job, you may decide that the flexibility in your hours is worth a reduction in pay.

You don’t technically have a manager

Not having a manager hovering over your shoulder is certainly an appealing prospect, particularly if you prefer to have a bit more autonomy or control over your working environment. The flipside of that is, you need to maintain a good rating to stay on the platform and if you have a difficult rider in the backseat, you’re the one that needs to deal with it, along with the threat of one-star reviews hanging over you.

You could get really fit delivering for UberEats

Photo by [Kai Pilger]

If you want a way to build your cycling fitness, why not start delivering for UberEats? Pedalling all over your neighbourhood will ensure you’ll get fit, and with Foodora, Deliveroo and UberEats all accepting bike riders for delivery there are ample opportunities to earn some cash riding. If you aren’t sure you’re fit enough, it might be worth starting to cycle around your neighbourhood now or make sure to start delivering in a nice flat area of your city to avoid all the hills.

How else can you make money from your vehicle?

Here’s another way to make an income from your car

If you have a car and you want to make some money from it. Whether you deliver with Uber or not, there is a another way to help you earn money from your car, you can share it with your neighbours!

If you drive for Uber, your vehicle is still eligible to be shared on Car Next Door!

Best of all - you don’t need to be driving it to make money! You’ll earn an hourly or daily rate for renting out your car (which you can set yourself) and then an additional amount for every kilometre a borrower drives.

Rent out your car today

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