It has been more than 2 weeks since I last blogged and it is not because I am quitting social media altogether. Rather, I have been “forced” by Uber to drive 5 hours a day, 5 days a week for 5 weeks and I don’t even have time for my own personal leisure!
Well, I wasn’t exactly forced to drive. In fact, I made the decision to drive with Uber so that I can have a first-hand experience of the challenges that Uber drivers are facing and also shed some light on the guaranteed earnings that Uber is promoting heavily.
Through this blog post, I hope that it will also help people make a well-informed decision before signing up to drive for Uber or GrabCar (since both offers quite similar services).
Some Background Information…
I rented a 2006 Kia Cerato, Car Plate Number SJP2784E, which is registered under the company, Lion City Rentals (Company Registration Number: 201504621K) for 5 weeks and the rental for the car cost SGD$420 a week. For 5 weeks, it cost me SGD$2,100. Just so you know, Lion City Rentals is a car rental company that is fully owned by Uber.
The Kia Cerato that I rented isn’t well-maintained and there were quite a number of dents, bumps, stains, and scratches. The front wheels were quite botak (bare) and the brakes were lousier than my Kia Picanto. There’s nothing to rave about the car interior and the only positive thing about the car is the large rear trunk space.
According to the information that I gathered, the Kia Cerato was transferred to Lion City Rentals in late November and it is due for scrap in early April next year. Based on my current rental rate, the car would have generated 4 months of rental revenue which would amount to SGD$7,980. Coupled with the PARF Rebate of SGD$6,855 that Lion City Rental will get when the car is de-registered, the company would have gotten SGD$14,835!
Yes and No.
If you own a fully paid-up diesel vehicle that is registered under your company’s name with a commercial car insurance and you use it to drive full-time (8 to 12 hours a day) for Uber, then yes, it might be profitable.
But if you rent a vehicle that runs on petrol to drive for Uber, it is not profitable at all and your earnings will go downhill if you are planning to drive part-time. Should you plan to drive part-time, your earnings may barely be enough to cover the rental of the car.
What’s with all those incentives that Uber is giving to drivers?
Well… they come with a lot of terms and conditions and furthermore, the incentives can be changed anytime at the discretion of Uber. For the SGD$5000 guaranteed earnings, drivers need to be online 240 hours in the first month (of which 140 hours need to be peak hours) and drivers must accept 80% of all trip requests.
Let’s take another incentive that Uber offers its drivers for the 1st week of December 2015. Looking at the table, if a driver drives all of the peak hours (which is 74 hours a week), the drivers are guaranteed to earn SGD$1998 a week.
Looks promising right?
But the fact is, from the SGD$1998, Uber will deduct a 20% service fees and that will equate to SGD$1598.40. Minus away the car rental which in my case is SGD$420 a week and the petrol which will amount to at least SGD$450, what a driver takes home is approximately SGD$728.40 (which is about SGD$9.84/peak hour).
SGD$1998 – 20 % (Uber Service Fee) = SGD$1598
SGD$1598 – SGD$420 (Car Rental Cost) – SGD$450 (Petrol Cost) = SGD$728.40
SGD$728.40 / 74 peak hours = SGD$9.84 per peak hour (after deducting all the costs)
So… if you work backwards, an Uber driver will need to work at least 43 peak hours a week just to cover the cost of the car rental (assuming rental is SGD$420 and earnings per peak hour is SGD$9.84) and if he chooses to have a 5-day work week, he will have to work 8.6 peak hours a day!
SGD$420 (Car Rental Cost) / SGD$9.84 (earnings per peak hour) = 43 peak hours to cover rental
43 peak hours / 5 days = 8.6 peak hours per day
If you’re deciding to work part-time, ask yourself if you can commit to working the 8.6 peak hours a day. Even if you work 24 peak hours on Saturday and Sunday, you will still have to work at least 3.8 peak hours on a weekday (43 peak hours minus 24 peak hours divide by 5) to cover the cost of the rental.
43 peak hours (to cover cost of rental) – 24 peak hours (weekends) = 19 peak hours
19 peak hours / 5 days (weekdays) = 3.8 peak hours per weekday
Having driven part-time for Uber for 3 weeks now, I can only say that I am making a big loss because I have not even covered the cost of my petrol yet. What is worst is that I can’t return the vehicle anytime I like as there is a binding rental contract of 5 weeks for all drivers that rents a car from Lion City Rentals (a reminder that Uber owns this company).
With the kind of car rental rate (SGD$420 a week, SGD$1680 a month) that I’m getting, I could easily get my own personal vehicle without being subjected to all the terms and conditions that Lion City Rentals is imposing.
I’m not saying that you shouldn’t drive for Uber. If you need to put food on the table and you’re satisfied with working 74 hours a week just to earn SGD$728.40 a week, I take my hat off to you but honestly, you will be better off working with Comfort Taxi or any of the other major taxi companies in Singapore because they offer much better incentives.
Consider a 9 to 5 employee, he/she works 8 hours a day, 5 days a week and that works out to be about 40 hours a week. Assuming a junior administrative assistant earns SGD$2000 a month, he/she will earn SGD$86.96 a day for 8 hours of work which is approximately, SGD$10.87 per hour. And we haven’t even taken into consideration that companies offer employees annual leaves, medical leaves, and CPF contribution.
Would you rather work for SGD$10.87 per hour for 8 hours a day (5-day work week) or SGD$9.84 per peak hour for 10.6 hours a day (7-day work week)?
In any case, Lion City Rentals is currently aggressively and actively recruiting new drivers and the company is even encouraging current drivers to refer new drivers so that current drivers can earn some referral bonus.
I quote Lion City Rentals, “Drive with Uber using our car and make it your personal money making machine.” Is the car really a personal money making machine? When I drove with Uber using the car from Lion City Rentals, I felt more of a slave to the machine than the machine working for me.
“Drive with Uber and earn great money as your own boss. Get paid weekly for driving on your own schedule. Get a car from us- Uber’s most preferred rental partner.”- As quoted from Lion City Rentals Website.
Obviously Lion City Rentals is Uber’s most preferred rental partner because Uber owns the company (like duh!)
Be your own boss?
It’s more like you’re working for Lion City Rentals/Uber rather than becoming your own boss. You are your own boss only when you have people reporting to you. The definition of “boss” is “a person who exercises control or authority; specifically: one who directs or supervises workers.” If you don’t know yet, Uber has the right to boot drivers from their system if a driver has an unacceptable rating given by the passengers. Even if Uber drivers can rate their passengers, what positive change can drivers derived from rating their passengers? Uber can’t boot passengers from their system like how taxi companies will blacklist certain passengers for not boarding a taxi despite booking for it.
All these that I have mentioned are from the driver’s point of view.
What about the consumer’s point of view?
For consumers, Uber/GrabCar is ultra-convenient and both services satisfy the consumers’ need for instant gratification. Furthermore, hailing a taxi during peak hours can be extremely difficult as cabbies themselves can be quite picky about who they want to pick up. Since Uber/GrabCar offers a hassle-free cashless transaction between the driver and the passengers, consumers will be keener to utilise Uber/GrabCar than flagging a taxi off the streets.
But my question is…
Is Uber/GrabCar really safe and secure to use?
To use Uber/GrabCar, you need to have your GPS turned on and you’re leaving footprints of your whereabouts. In Singapore, it is probably safe for you to use such services but if I ask you whether you feel safe using Uber/GrabCar in other countries, will you say the same?
Read the following articles to find out more about Uber and your privacy:
At the end of the day, who really benefits?
Consumers (because they get affordable and immediate transportation), car rental companies (because they earn money from renting out their cars and still get a PARF rebate when the car is deregistered), and Uber/GrabCar (because they charge drivers 20% service fee or should I say commission).
Then, what about the drivers themselves?
They are left to fend for themselves because of our selfish consumerism mindset. They don’t have time to enjoy the finer things in life (or spend quality time with their families) because they are always on the roads satisfying consumers’ demands. They don’t earn the dollars they rightfully deserve because consumers always want everything cheap, fast, but top notch service.
How fair is that?
Well, if you think Uber/GrabCar is highly efficient in meeting your demand, don’t forget that behind the scenes, the drivers themselves are the ones paying for your instant gratification, not Uber/GrabCar nor the car rental companies.
That’s all from me for now.
For your personal reading pleasure, you might want to check out Uberpeople.Net (Singapore).