Uber vs taxis: How renting an Uber car still means more pay
Uber car renting service Splend translates into higher pay and fewer hours when compared with taxi drivers renting their plates.
Splend, a service that offers vehicle rental for Uber drivers, has shown just how financially draining the taxi industry can be. Uber requires drivers to supply their own vehicles, but even for people who don't own one, it's cheaper to rent a vehicle rather than pay taxi license fees.
“Of the 68,000 taxi drivers in Australia most work for a ‘network’, ‘owner’ or ‘operator’," said Splend's CEO Chris King."According to Roads and Maritime Services of NSW in 2012, on average these drivers were paying a lease of up to roughly $1,250 per week to rent a licensed taxi because they could not afford a previously inflated $400,000 taxi plate. The plate owner claims 60-65% of the shift takings while drivers endure poor working conditions and unfriendly shift hours,” he said.
A former Sydney taxi driver who started driving with Uber and rented a vehicle through Splend reduced his working hours while increasing his weekly income. The taxi driver dropped his weekly working hours from 60 to 40 when he switched to Uber, earning an average $36.79 per hour and $1,471.43 per week.
On the surface, this was a reduction of his weekly average $1,700 income he had when driving a taxi. However, as he is now paying $269 per week to rent a vehicle through Splend, down from $796.43 to rent taxi plates, he increases his income by $233.86.
See the breakdown below.
| Rideshare | Taxi | |
|---|---|---|
| Average fare (weekly) | $1471.43 | $1,700 |
| Hours worked | 40 | 60 |
| Expenses | $269 | $796.43 |
| Fuel | $130 | $110 |
| Total expenses | $399 | $906.43 |
| Total net profit | $1,027.43 | $906.43 |
Due to the high cost of taxi plates and the decrease in fares due to competition from Uber, becoming a taxi driver is becoming less lucrative. However, the requirement of Uber to have a private car that passes its inspection can stop people from signing up. Services such as Splend, which have just launched its rent-to-own service alongside its existing vehicle renting service, are offering people looking to sign up to Uber an alternative.
According to King, the high cost of motorist road-related taxes and surcharges, which totalled $28 billion in 2013/14, has huge impacts for the average Australian household.
"The vehicle finance landscape in Australia is expensive and outdated for aspiring rideshare drivers," he said. "Australian’s are looking for alternate ways to efficiently earn a living and own a car, making value for money Splend’s main consideration in its Rent-to-Own offering."
Drivers can rent a vehicle starting from $269 per week, or $299 for rent-to-own. The price covers registration, stamp duty, insurance and servicing, all of which usually reduce the take-home income for Uber drivers.
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