Uber Driving - Did I make money?
A breakdown of my weekly Uber earnings
Why I started Uber Driving
The short answer is extra money, particularly with the cost of living increasing. Initially I was hesitant, why?
- 45% income tax on a side hustle - I acknowledge I am blessed to have this problem
- Negative stigma attached to Uber driving - I told someone about my Uber ambitions, their reaction was one of disgust
What changed? Last year my employer was being acquired and layoffs were looming. Uber could be a temporary job if I was laid off. I continued on, recognising my perspective on Uber driving mattered not other people’s opinions. I realised the ATO are an inclusive bunch and don’t discriminate how you earn extra money. They will still get their 45% tax from me, might as well suck it up buttercup!
I signed up early December 2023, it’s not difficult. A few weeks later I was approved to pickup passengers. Thankfully I was not laid off so Uber became a side hustle experiment!
The Whip aka Car
Your whip determines earning potential. Our whip is a 7 seater luxury SUV and it qualified for UberX, UberXL and Uber Premier. If I was to request an Uber for a 6km ride in Sydney (no surge) this is the approximate rider charge UberX $22.01, Uber XL $33.10 and Uber Premier $45.15. The Uber driver doesn’t pocket that much but you get the idea.
Confession time, I love to drive our whip and keep it clean. The neighbours joke about lining up their cars when I perform the weekly clean. Each Friday afternoon, it was treated to an indulgent snowfoam bath, a gentle hand wash, meticulous interior vacuum, a tender leather cleanse (occasionally followed by conditioning), a thorough window clean and a final touch of product to enhance the carbon fiber interior trim.
The inside of our whip is a nice place to be - Yeap I am slightly biased. I would happily spend 15-30 minutes in here if my Uber driver had this type of car.
Did I make money?
Yes I made money but it was not profitable for me. There is a caveat, there are variables unique to every person that affect profitability. For example personal tax bracket, car expenses, hours driving, insurance costs etc
Uber Earnings
My weekly earnings was around $400 for 2 nights of driving (my personal target). I could drive more but wasn’t worth the tradeoff in time. Below is a screenshot of a typical weekly payout - $427.15.
Uber Expenses
I didn’t want to get caught out at tax time so created this Google Sheet to calculate my tax obligations.
Note: We own the car therefore car repayments don’t need to be factored in
Let’s break down the sheet above:
- Income Tax: 45% set aside for the ATO
- GST: GST set aside for the ATO
- Total Tax: Total amount squirreled away for tax time
- Net Income: Take home pay before expenses
- Petrol: Approx $80 petrol for 2 nights of driving - 98 RON
- Insurance: Premium increase for adding rideshare to my policy. $99 per month ($99/4.3 weeks=$23.02)
- Car Maintenance: 50x52=$2600 per year. Volvo service costs approx $700. Estimated 2 services per year. $2600-$700-$700=$1200 remaining for tyres or unexpected maintenance costs
That left me with $43.08 for two nights of Uber driving. Not really getting that bag! 💰
Uber Earnings by hour
Let’s break this down by hours.
- Friday 1st March I drove for 5.5 hours, 11:30pm - 4am. I add 1 hour which includes travel to first passenger and travel home
- Sat 2nd March I drove for 3 hours, 12:00am - 2am (plus 1 hour). I was lucky that night with UberXL earnings and hit my $400 target early
In total I drove 8.5 hours (remember the second night I didn’t drive much). Most nights I would drive 5-6 hours so 10-12 hours in total. In the breakdown below I’ve compared per hour rate for 8.5 & 10 hours.
Uber advise drivers can earn between $40-50 per hour driving at peak times in Sydney. My earnings data confirms this.
| Description | Calculation | $ Per Hour |
|---|---|---|
| Gross Income divided by 8.5 hours | $427.15 / 8.5 | $50.25 |
| Gross Income divided by 10 hours | $427.15 / 10 | $42.71 |
At face value the above looks good. Let’s be generous and assume I had no car expenses after tax:
| Description | Calculation | $ Per Hour |
|---|---|---|
| Net Income before expenses divided by 8.5 hours | $196.10 / 8.5 | $23.07 |
| Net Income before expenses divided by 10 hours | $196.10 / 10 | $19.61 |
The above figures are okish. Not amazing but ok for a side hustle. But I live in the real world, tax and car expenses are real:
| Description | Calculation | $ Per Hour |
|---|---|---|
| Net Income after tax & expenses divided by 8.5 hours | $43.08 / 8.5 | $5.05 |
| Net Income after tax & expenses divided by 10 hours | $43.08 / 10 | $4.30 |
Yikes! pretty low right?
Rider fare vs Driver pay
I’ve always wondered what the driver takes home vs the fare the rider pays. I got to find out first hand, below are real examples.
The passenger fare below was $37.94, Uber takes a 27.5% cut - $10.30 and I was left with $27.64.
It’s cheap! The passenger paid almost $38 for an 18km trip lasting 21 minutes. A taxi would be at least double that fare.
Let’s look at a similar trip but with extreme surge. Two things to note:
- New Years eve, busiest time of the year to Uber, surge fee can be huge!
- This is an UberXL trip so the base fare is higher than an UberX trip
Wowsers! the fare was $67.38 but the surge was a whopping $121.28. Mosman is a popular spot for watching the Sydney New Years eve fireworks. Once the fireworks are over Uber demand is off the charts, my phone was pinging non-stop with new jobs to accept.
Again Uber takes their 27.5% $51.88. We took some toll roads $2.67. Tolls are not registered as earnings and are reimbursed. You quickly learn to avoid tolls (if possible) without an active passenger in the car.
If every night was like New Years Uber driving would be super profitable. I think I made about $400 dollars for a few hours of Uber driving.
Below is an example of tips. The passenger tipped me $3 for a relatively short trip, they were a nice family I picked up at the end of their cruise.
The tip goes completely to the driver. Uber doesn’t take a cut from the tip, yay!
We’ve establish Uber is cheap, most people know this. I think Uber’s 27.5% cut is too high. I understand Uber provides the platform but taking almost 30% from an already cheap fare further reduces driver’s earnings.
Drivers make good money during surges but they finish quickly. 99% of the time a passenger’s destination is outside the surge zone. Don’t forget Uber still take their cut out of the surge too!
The other way to increase Uber driver earnings is getting tips, Uber doesn’t touch this. It’s appreciated by drivers, even if you tip a few dollars. The driver can earn an extra $15+ per night.
And please don’t say “I’ll tip you in the app” because no-one ever does. I never asked for tips and never expected them. Tipping is optional and thats fine but don’t advertise something you never plan on doing.
Increase earning potential
I had unrealistic expectations that Uber would provide a steady stream of jobs. Jobs are driven by demand and logic needs to be applied to increase earning potential. You don’t want to be driving around not earning aka Dead Miles.
In the beginning my Uber shift would start driving around where I live in Chatswood/North Sydney until I got my first job. This rarely worked in my favour, I would end up somewhere with little or no chance of a job back to where it was busy.
I experimented with 4am starts on Sat & Sun mornings. Surge was high at that time due to airport trips and weekend workers. I would get a few airports trips and 80% of the time end up in the city. By 9am - 10am Sydney traffic is alive which is not great for Ubering. Uber doesn’t have a taxi like meter that keeps ticking over in traffic. Sitting in traffic is similar to dead miles.
After further experimentation I found the weekend night shift on the Northern beaches worked for me. The Corso was alway busy. Late night pub goers and ferries from the city ensured a steady stream of jobs. Below are the reasons this spot worked for me:
- Surge would occur most nights/mornings
- Steady stream of trips from 11pm - 3am (UberX, UberXL)
- Easier to achieve target earnings $200 per night
- Little to no traffic
- No toll roads
- Easy parking in Manly central when waiting between jobs
- Shorter trips within Northern beaches area
- Northern beaches is an affluent area, I felt safer doing pickups
- Passengers more chill and less demanding than city passengers
- 15-30mins from home, when I had enough home wasn’t far away
There were longer trips within the area but I would always get trips back to Manly or side trips in the Northern beaches. There were a lot of side trips transporting young adults home from house parties.
Uber drivers are unaware of the destination until passengers get into the car. We can decline jobs after passengers get in but I never did as it’s not right. Therefore it can be a gamble where you end up. If I started before 11pm in the Northern beaches there were more jobs into the city. The city was not my favourite as it’s busy (traffic equals less money) and sometimes the GPS can’t find you (this can make navigating and rider pickups a nightmare). I found going online in Manly central decreased chances of city trips.
City trips were inevitable, if it was early in the night I would go offline and drive back to Manly before going online again. If I was close to my $200 target I would do the city drop off and resist the temptation to accept another job before heading home.
You don’t have to accept every job that comes through. Uber warn you if a job is longer than 35 mins. Being a newbie I would accept these. Below is an example where I drove 44 mins on toll highways with no chance of jobs on the way back. I was annoyed at Uber, my first job took me well out of The Northern Beaches!
I ended up driving back to Manly taking toll roads which cost me $16.35. It would have taken far too long driving back using non toll roads even late at night. Sure I made $85.87 but minus the tolls I only made $69.52 with almost 50kms worth of dead miles.
Conclusion
Uber classes drivers as independent contractors not employees. Therefore Uber has no obligation to pay driver’s expenses, holiday pay, sick pay etc. Uber doesn’t care about drivers, they are not employees and treat drivers as such. In my opinion the earnings data I’ve shared backs this up.
To increase earnings I could lower my costs. But expenses such as a Volvo service and 98 RON are non-negotiable to me. Having an electric vehicle (EV) would reduce expenses but buying an EV just to do Uber part time makes no sense.
For my situation it’s not worth it, I was earning between $4-10 per hour depending on surge (after tax/expenses). I’ve concluded a side hustle aka second job without car expenses would be more profitable. Like working at KFC - mmmm chicken, it’s always been my dream to work at KFC 😊
What I took away from my 3 month Uber driving experience is earnings are low (even if I was in a lower tax bracket). If you use Uber and the driver gets you home safely, give your driver a tip. 100% of it goes to the driver and I can honestly say it’s appreciated.
Oh and never say “I’ll tip you in the app” unless you follow through!
I did genuinely love Uber driving, check back for Part II where I share my experiences with passengers
Update 23/06/24 - I did apply for a job at KFC but I was added to their talent pool 😭 ….. still my dream to work there tho!
