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? What are your rights? And just how much money can you make from becoming an Uber driver?
We reveal all.
London Uber update: the company has lost its licence to operate in London, but as the firm has the right to appeal the ruling, cars will continue to operate in the capital.
How to become an Uber driver
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.”
Uber has appealed against the decision.
In the meantime, you still have to think about a few basic expenses.
Your rights as a gig worker: sick leave & maternity pay
As mentioned earlier, there has been a lot of bad publicity about Uber workers' rights – and the gig economy in general.
Following a review in 2017, the Government has pledged to rethink the employment rights of gig economy workers.
- Enforcing holiday and sick pay entitlements;
- Allowing flexible workers to demand more stable contracts;
- Giving workers the right to demand a payslip.
Most likely in response to this, Uber announced in May 2018 that it will offer additional protection to its drivers, including limited insurance against sickness and injury as well as maternity and paternity payments.
Uber says the cover will go live from June 2018 but won't be available to all drivers: you'll need to have racked up at least 150 trips in the past two months, so many those who only do so occasionally will still miss out.
In terms of sick pay, this will be worth a maximum of £1,125 a week, while maternity payouts are £1,000.
In truth, these protections are far less generous than you'd get as a full-time employee, but if nothing else it should be seen as a step in the right direction.
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. If you want to learn more about the requirements, you can find more details on driving for Uber in the UK here.
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 drivers who signed 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