Working for Uber promises freelance and flexible hours for drivers in the UK, and the firm has just introduced tipping and new charges for customers who keep drivers waiting. Here, we look at how easy is it to get started, what tax must you pay and how much money can you make working for Uber.
Uber has opened up a new way for people with a car and some spare time to make extra money.
But how do you become an Uber driver in the UK? What licence do you need? How much tax must you pay? And just how much money can you make from becoming an Uber driver?
We reveal all – but first, you might want to take a look at recent suggestions from the Government that could have major implications for Uber drivers, and the gig economy in general.
London Uber update: the decision by Transport For London to ban Uber from servicing London is expected to be delayed by at least a year, meaning drivers can continue to work until at least September 2018.
Let's start with how Uber works for passengers
Uber is a mobile phone app, which allows you to book a driver to take you somewhere.
For example, you might choose to use Uber if you need a lift across town to a meeting or to get home after a night at the pub, but you don't want to use a traditional taxi.
There are five different types of Uber taxi – UberX, UberXL, UberSelect, UberPOOL and UberBLACK – which vary in cost. With UberPOOL you can share your cab with another user and split the cost.
Part of the reason it has become so popular is that it generally works out much cheaper than going with a black cab or private car firm. It's also incredibly convenient.
It's now available in a host of cities in the UK, including London, Leeds, Edinburgh, Belfast, Cardiff, Sheffield and Newcastle.
How Uber works for drivers
At the moment, all of Uber’s ‘partners’ (as it prefers to call them, rather than drivers) are treated as if they are self-employed.
But in a recent landmark case, an employment tribunal ruled that the UK's 40,000 Uber drivers are not self-employed and therefore have the right to the National Living Wage, annual leave, sick pay and other employment benefits.
This could lead to massive changes across the 'gig economy', affecting similar workers like bike couriers.
In the court ruling, judges insisted that:
"The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous. Drivers do not and cannot negotiate with passengers… They are offered and accept trips strictly on Uber’s terms.”
Union GMB has promised that drivers' flexibility won't be affected by the ruling; it'll just give them employee rights.
Uber has appealed against the decision.
In the meantime, you still have to think about a few basic expenses.
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Start up costs
A set of wheels is essential obviously, but if you’ve got an old banger, forget it.
Cars must be under five years old. Details of suitable models can be found on Uber’s website, but you’re usually looking at a saloon or MPV vehicle to comfortably seat between four and eight people or a Mercedes ‘E-class’ or equivalent for four passengers.
What licence do I need to be an Uber driver?
You’ll also need a Private Hire Vehicle licence (PHV). You can apply for this through your local council. Costs may vary according to where you live.
Stephen Rowland from Newcastle joined Uber in November 2015. He was looking for work with flexible working hours after leaving his job as a college lecturer when his mother became ill.
He had to shell out for his private hire licence, which included a Disclosure and Barring Service check (previously a Criminal Records Bureau check), and interview, and had to pay £95 for a medical. He said the whole process took six weeks.
When you apply for your licence, your council needs to be convinced that your car is roadworthy. He explained: “The initial test cost £240 with repeat ‘MOT’ style tests every six months which cost £80 a time.”
Deborah Tucker from London paid a one-off fee of £450 for her private hire licence after going through a company that promised to ‘fast track’ her application, but the process ended up taking months.
She says now that it’s a job she could have done herself, and for less money.
Cover for ‘business use’ can be costly compared with your typical ‘social, domestic and commuting’ insurance cover.
Stephen was paying £180 a year for car insurance for his Mercedes ‘E class’ but even after shopping around it jumped to a whopping £2,700 a year.
However, this does include public liability, which is essential if you’re carrying fare paying passengers.
And even if you’ve got years of driving experience this won’t necessarily bring the price down.
“You can’t transfer your ‘no claims’ bonus across for business use, so it was a case of starting again”, said Rowland.
Deborah was quoted £5,000 to cover her BMW Series 3, but eventually found cover for £1,800. Nonetheless, this was a steep price hike compared with her usual £180 yearly car insurance costs.
“It was more about practical things like if someone’s fallen asleep, or you’ve got to move a passenger”, explained Deborah Tucker. Within minutes of finishing the course, both claim to have had customers waiting.
How much can you make?
Uber claims that on average drivers could make around £565 for a 35-45 hour week, and that’s after it takes its 20% ‘service fee’ (though new drivers who sign up after April 24 2016 have to pay 25%).
For Stephen, driving for Uber provides him with a full time wage. He said: “I take home around £700 for a 35 hour working week; sometimes I’ll do more but I never go over 45 hours and I don’t always work weekends”.
While there have been complaints from drivers on chat forums about the time spent waiting for fares, Stephen claims he’s never waited more than ten minutes.
Deborah Tucker joined Uber as she wanted flexible work after leaving the fire service.
She said: “I like the fact there’s no minimum hours; you only have to make one trip a month to keep on the books and I do anything from an hour a week up to 60 hours, which brought in £1,100 after Uber’s cut”.
Petrol costs also need to be factored in; Tucker says she spends around 20% of her earnings on petrol.
Uber dishes out wages, minus its cut, on a weekly basis. The money goes directly into your bank account along with an invoice detailing all the trips.
You can also opt to pay a £5 weekly charge for a company phone with built in sat nav. There's nothing to stop you using your own phone and downloading the GPS app, but this isn’t always straightforward.
“I did this initially, but found the app kept dropping out, and I was liable for data charges so I switched to the £5 deal”, says Stephen. This includes the phone, data costs and any repairs.
Other money-making opportunities
This article has been updated
In pics: the incredible rise of uber (click image below)
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