“How much do Uber drivers make?”

I get asked this question by passengers ALOT.

I can understand why. Uber drivers on forums understate what they make while Uber has been known to overstate driver wages

So here it is. The 100% honest, researched, personal and no BS guide to how much Uber drivers in Australia earn.

The short answer

Uber drivers in Australia earn approximately $30/hour or $62,200/year in pre-tax income (working full-time 40 hours per week, 52 weeks). I’ve arrived at this number from my own personal perspective, friends, 15 different forum posts online and Sherpashare. To put that number into some context, the average Australian earns $57,980 per year pre-tax. Uber drivers therefore take home a better income than 60% of full-time working Australians. Note: this number already takes into consideration Uber’s 20% commission fee per trip (which is deducted automatically for every trip) and tips (although passengers rarely tip). 

The longer answer

So driving Uber sound pretty good so far? But there’s costs associated with driving Uber including GST, fuel, tolls, insurance + rego, general wear on the car and depreciation. Some passengers think that Uber pays for all these costs. However, drivers are considered ‘independent contractors’ who must cover all their own costs. 

The taxman and GST

In order to legalise ridesharing, the Australian government mandated that Uber drivers be considered as “taxi-travel” services. This now means that all drivers lose approx. 9% (1/11th) of their above income to GST payments. Drivers remained unaffected since Uber increased prices in August 2015 by 10% to counteract these GST charges. It does mean that drivers now have to sign up for an ABN (free) and lodges GST tax returns (a small hassle).

After GST, full-time drivers will generally pay around 20% as income tax leaving an after-tax income of $45,236. Some drivers hire professional accountants to help deal with their GST payments and count this as a cost. I personally save the money and spend 2 hours doing my own taxes so I don’t have to pay an accountant $120. The hardest part of doing taxes is usually recording and calculating what deductions I’m entitled to as a Uber driver. It’s also important to note that tax rates may be higher or lower if your using Uber as a source of secondary income. You tax will then depend on how much you earn in your primary income.

Car costs

Fuel
Driving for Uber means that you will drive a lot more kilometres than you would usually. This will means that you’ll be visiting the servo more often and spending more at the bowser each time. Ever since I began driving Uber as a full-time job, I’ve started to spend an extra $100-150/week on fuel. Although I drive a fuel efficient car, I’m pretty liberal with the accelerator so I would say my own fuel costs are actually lower.   

More wearMore miles also means more wear on your car. Generally, people should get their car serviced every 3 months or as frequently the manual tells them to. Servicing costs about $200 each time so that’s about $800 per year. For me personally, I find servicing to be one of the biggest scams in the automotive industry so I taught myself how to change a car’s engine oil and air filter myself. I get my car serviced every year now and I would recommend this to Uber drivers and normal car owners. We’ll assume, however, that drivers will spend $800 in servicing a year.   

TyresDriving an extra 45,000km a year also wears the rubber on your tyres. I generally pay around $800 for a good set of Bridgestone tyres that’ll last me for about 2 years before the tread starts to disappear. Since Uber remotely inspects your car every year to insure safety, drivers won’t be able to get away with any worn tires. Given that I’m currently driving double the kilometres I usually do in a normal year, I believe my tyre lifespan will halve. So that’s $800/year.

Insurance
To get my car insured I buy:– $500 on CTP (for NSW residents)
– $450 on third party
– $500 on comprehensive
– $500 rego
– $100 on roadside assist
for a total of $2050. For argument’s sake we’ll include these as costs in our calculations. Personally, I consider them as ‘fixed costs since I have to pay these just to get my car on the road anyway. For arguments sake, we’ll include it as a cost in our calculations.  

Uber insuranceSome drivers have have posted that their insurance premiums were raised when they told their insurer that they’d be using their car commercially. I don’t know why people have done this (perhaps lying) since Uber provides drivers with contingent insurance up to $20 million. Uber’s insurance policy only kicks in if your own insurer doesn’t insure you because you were driving for ‘commercial purposes’. In short, you still have to get insurance for your car despite Uber’s insurance policy.      

Mobile
You’ll also need a cellular data to connect to the Uber driver app and receive jobs. My personal recommendation (and Uber’s recommendation) is a plan with a minimum of 1.5GB. I personally have 2.5GB per month and $1,000 calls on theTelechoice $28/month Live Plan. I get some extra data to surf the internet while I’m waiting for jobs in my car. I wouldn’t worry too much about how much call credit as most passengers actually call me. I occasionally message passengers when they’re not ready to go.

Debunking some common costs

As a note to people interested in driving Uber, I would definitely be weary of forum posts that are overtly negative on driving (especially keyboard heroes that don’t drive or only drove for a short period of time). Like with any service or company, people are going to have good and bad experiences. Studies have found, however, that people with bad experiences are more likely to voice their opinion online or to friends than people with good experiences. This is no different for Uber. You will find a lot of negative forum posts from ‘drivers’ who either:

A lot of people on forums treat the clean up from a vomiting rider as a cost. I’m not sure why since Uber is happy to compensate for the clean up. The process is pretty simple; send an email with the cleanup receipt attached to Uber and they’re happy to return the amount back to your bank account. I personally keep plastic shopping bags in the door compartments to avoid the hassle. They’ve never been used.

People sometimes include tolls as a cost. They claim that drivers aren’t reimbursed for tolls when they go to pick-up passengers. This has never happened to me personally since Uber only gives you jobs within a 4 km distance (within the same suburb or next suburb). If you do live in a suburb that’s quite far from your city’s CBD or where people don’t use Uber (such as South-west Sydney), then you may have to pay tolls to get to an area where you’ll get jobs. I generally just stake out at my house and watch Two and a Half Men until I get a job request. I am fortunate, however, to live in one of Sydney’s suburbs where people do order Uber. To find out whether your suburbs is popular with Uber, log onto the passenger app and see how many driver there are nearby. The more drivers there are the more job opportunities. Uber will also tell you where the most jobs are in your individual city when you sign up

The other big cost with driving Uber is fines. Like everyone, I consider myself a safe driver but riders constantly push drivers to break some road rules when picking them up. In my first year I received two fines while picking up passengers; one for stopping in a no stop zone ($248) and one for stopping in a no park zone ($106). Although I’m a lot more careful nowadays and I always find a safe park before calling the passenger, new drivers should be aware of these risks. Uber is also planning to 

The Bottom Line

Just do it

Someone once said to me, “Indecision may or may not be my problem”. If I didn’t overcome my indecision about driving Uber, I wouldn’t have discovered a wonderful secondary income. I think that anyone looking for a new job or secondary income should just go and experiment with driving for a rideshare company. There’s a lot of information and discussion on the news and forums about driving Uber that I’ve found doesn’t correlate with my personal experience. Nor may this article accurately describe the experiences of other drivers out there so its important that people interested in earning a primary or secondary income from Uber at least try it out.

The sign up process is quick and simple, just click below on Shia. What are you waiting for?