News National Uber drivers earning millions despite being illegal

Uber drivers earning millions despite being illegal

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Drivers with Uber generated $20 million in income in 2015 in one Australian city despite the popular ride-sharing service still being illegal there.

A study released on Monday by Uber claimed that Melbourne drivers shared millions of dollars of revenue while the state government worked to catch up on regulation of the ride-sharing service.

While $20 million is a large number, drivers told The New Daily they were routinely making between $400 and $500 a night on weekends, with some taking home more than $1000 for three days’ work.

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Uber takes 20 per cent of each fare between the driver charging it, the passenger paying and the money later being deposited into their account.

On top of that, drivers pay for the upkeep of their car and petrol, while tolls are compensated.

Uber takes 20 per cent of a fare, while the rest goes to the driver. Photo: Shutterstock

The New Daily spoke to four UberX drivers on their experience with the service.

Some, like Todd* and Luke*, said they set a daily target, while Arthur* doesn’t set a target but said in the 10 days since he had begun working for Uber he had taken 70 fares.

Todd, also an advertising freelancer, works up to eight hours a day, favouring the mornings and weekday work.

“I tend to set myself a daily target, time-wise and monetary wise,” he said.

“In eight hours I will aim for $250, it doesn’t always happen – sometimes you go over, sometimes a bit under.

“It has been a godsend for someone like me who does contract and freelance work, I have got that week or two between jobs when there is no revenue.

“It is good because you can do as much or as little as you want.”

For Luke, the working day is over once he has earned $200 in fares, after taking costs into account. It usually takes about six or seven hours, but once took just five.

“I lost my job last year and I tried to get a new one, I got a job but it is casual work in warehousing so they seldom call me, that is why I am doing Uber now,” he said.

Short fares the bread and butter

For a year and a half, Ricky* hasn’t set a wake-up alarm, even though he works five or six days a week.

He declined to reveal how much he makes, but the father-of-three, who is currently paying off a mortgage, said it was “enough to live on”.

“You could do less trips, with a big fare, or more trips, for a small amount, you just do whatever comes along,” he said.

“I would say, 90 per cent or 95 per cent are small jobs, there are odd times you get good fares too, but that is how you make money.

“Uber cars, they are all kind of new cars, cost less to run, fuel efficient, small cars, that is how we save money.”

The service has garnered ire from the taxi industry drivers to not need to pay high amounts to ferry passengers. Photo: Getty

The ride-sharing service remains illegal in Queensland, South Australia, Victoria, Tasmania and the Northern Territory, while the Australian Capital Territory, Western Australia and New South Wales have moved to regulate it.

The Uber study combined the takings of drivers in 19 Melbourne postcodes, including areas of high unemployment like Broadmeadows, Glenroy, Craigieburn and Roxburgh Park, Fairfax Media reported.

Illegal or not, the ATO doesn’t care

The Australian Tax Office treats Uber drivers as contractors and taxes them in the same way as any other income.

This means they must have an ABN, register for GST and lodge a quarterly BAS (business activity statement).

DriveTax CPA accountant and registered tax agent Jess Murray specialises in financial advice for Uber drivers, an emerging niche market.

She told The New Daily whether regulated or not, all drivers must lodge a tax return.

“The ATO doesn’t actually differentiate between legal and illegal activity, they don’t care whether it is legal or not, it is taxable either way,” she said.

And the ATO know exactly who is working for the company – they did a mail out to all drivers in late September, even those who weren’t registered for GST.

“For some of them the letter said: ‘congratulations, you’ve done the right thing, go about your business’, and for others the letter said: ‘we are aware you are driving for Uber you must pay GST’, so the tax office already knew,” Ms Murray said.

* Names have been changed. The drivers spoke to The New Daily on the condition of anonymity.


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