Maximise your Uber earnings
MAXIMISE YOUR UBER EARNINGS
Thanks to all partners and drivers that took the time to complete our finance and mobile surveys. We’ve put together a summary to help you optimise your costs and developed a handy calculator to assist you in understanding your profit. Naturally, these figures would vary depending on trip volumes, distances travelled, frequency of accidents etc.
Importantly, this is not to be interpreted as financial advice but just a collection of explanations and tips to help you find the optimal cost structure for your specific business needs.
Here are some high-level insights we managed to extract from your inputs:
UBER SERVICE FEE
The fee charged by Uber covers continuous technology development, platform maintenance, transaction processing costs, business development and marketing on behalf of partners.
The nature of operating a transport business on the Uber network is such that your vehicles are likely to do high mileage and consume a high volume of fuel as a result. We estimate that most vehicles would consume the equivalent of 25% of revenue each week.
To help you optimise your fuel spend, we have put together a list of the top 10 tips on how to save fuel. We are currently engaging several prospective partners that could help you further reduce that cost.
Please bear in mind that the Uber app is designed to minimize the time you spend waiting for a pickup and driving to pick-up your clients. We suggest that drivers should not spend time driving around in the hope of increasing the likelihood of a pickup as this increases your fuel costs with no revenue being generated.
The cost of acquiring and providing for the vehicle is one of the largest expenses you will have while operating on Uber. It will typically consist of your financing, insurance, tracking and maintenance cost, unless you are currently taking advantage of a maintenance lease. We are currently in discussion with several providers looking to offer competitive leasing and other deals. Watch this space and check out all our deals on a regular basis.
Financing: When structuring future financing agreements, please bear in mind the mileage your vehicle will do and its useful life on Uber. Most vehicles will do about 200,000km over a 36-month period. Depending on what you’d prefer to do with the vehicle after it is no longer able to operate on Uber, it may be worthwhile considering a 36-month financing arrangement with a residual value that approximates the resale value at the end of the finance term. Given the mileage levels, new vehicles are likely to be worth 40% to 50% of the current retail value after 3 years of operation on Uber. Be sure to do thorough research on resale value when selecting your preferred vehicle. If you’re interested in being part of vehicle finance/leasing trials, please subscribe to the list.
Insurance: We have negotiated with GIB and Compendium (Bidvest) to offer insurance premiums at 4% of your retail value per annum. Please see details here.
Tracking: Through our relationship with Cartrack, you are able to get the full suite of tracking tools for only R179 per month. Click here to enquire. Tracking can give you much greater visibility of your vehicle activities and help you devise strategies on how to improve.
How do you monitor mileage covered?
Maintenance: Uber Partners whose vehicles are no longer covered by a maintenance plan are able to access discounted rates on services, parts and maintenance labour from select dealerships within the McCarthy network. For the moment, they offer this at McCarthy Premium on New Road, Midrand and McCarthy Suzuki on Garsfontein Road,Menlyn. They are able to service all makes of vehicles from these locations. With several partners paying for maintenance out of pocket, we suggest that partners provision for maintenance each month to make the expenses more manageable.
How are your maintenance and service costs covered?
We understand to what extent the anonymisation of numbers has increased your mobile costs and have found a solution to resolve this. As of August 2015, drivers will no longer have to pay for calls to riders with the introduction of our new “call me” feature (more details to follow soon). As far as the data and device costs are concerned, we’ve managed to negotiate far more competitive mobile deals from only R240/pm for a device and 2GB of data.
When your car smells fresh and looks good, it goes a long way towards convincing a rider that you truly are committed to offering 5-star service. Please take advantage of the car wash deals (starting at R50 per wash) to help you do that. Remember that if a rider messes in your vehicle after having one too many drinks… request a cleaning fee through the partner app and we’ll reimburse you (R70).
When it comes to creating a 5-star environment for your riders, we know that it is a cost to you. To support you in your efforts to create the environment riders have come to love and expect, you will soon be able to purchase a case (24 bottles) of water for R68. We expect most vehicles to not consume more than 6 cases per month. Please check our partner deals for updates on these water deals.
While we haven’t negotiated any preferential banking rates for partners, we are looking to find the optimal banking offering that gives you all the perks you need to make life easier. Some help with the registration of your company, accessing a petrol card and potentially getting cash back on fuel spend can make a world of a difference. Most partners appear to be operating in their individual capacity and potentially foregoing tax and other benefits of having a registered business. Some retail banks already offer attractive packages for small businesses covering business banking, CIPC registration and BEE verification.
Which structure best describes how you operate your business?
SALARIES (For investor partners)
Ensuring that the individual behind the wheel is happy is key to a successful transport business. While we don’t offer any advice on how to structure your employment agreements, we are aware that most investor partners pay drivers around 20% of the fares generated.
Understand that good drivers with a track record on our platform have options and are likely to migrate to their own financing or leasing deals over time. Given that, it will not be uncommon to have a new driver operating your vehicle every 6 months. For existing partners, we offer fast-tracked activations for replacement drivers. Simply email us to let us know you’re activating a replacement driver.
We’d love to hear your ideas on which companies you’d like us to approach to help further increase your profits or add value to your lives. Feel free to reach out to us on firstname.lastname@example.org with these ideas.
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