Could you make more money as an Uber driver? Here’s a quick guide to Uber, how it works and how much you could make in the UK.
Attracted by the flexible hours and the chance to earn some extra cash, there are nearly five million drivers working for Uber around the world.
The company struggled to recruit drivers during the pandemic, which led to increased waiting times for customers. Since then, the company has increased the per-mile rate and minimum fare as a way to attract new drivers. And with the cost of living crisis forcing more people looking for new ways to make money, the number of people driving for Uber hit an all-time high in 2022.
As well as discussing Uber drivers’ wages, we will also answer key questions, such as: how to boost your earnings, how to improve your driver rating, and what does taxi insurance cover?
How does Uber work?
If you’re considering becoming an Uber driver, it’s good to know a bit about the company which launched into the British taxi space in 2012. Over the past decade, the company has grown in popularity, with the phrase ‘getting an Uber’ now common vernacular. According to Statista, at the end of 2020, 93 million people used the Uber app on a monthly basis.
The business operates globally in more than 10,000 cities. Users are able to request a ride via the Uber app and the nearest available driver is identified. Once the driver has accepted the request, they will collect the customer and take them where they need to go. All of this is done via the app, without the need for the customer to hail a taxi down or book one over the phone.
The route, distance, and fare are automatically calculated and payment is made via the app, rather than as a transaction between the customer and the driver. The user is able to cancel the ride request – if made within a certain amount of time – but this may incur a penalty.
How are Uber drivers paid?
Generally speaking, Uber drivers are paid weekly. Your salary will go directly into your bank account and you will get an invoice detailing all the trips you’ve made over the past seven days.
For many years, Uber classified their drivers as contractors. However, following legal action brought against Uber by two former drivers – Yaseen Aslam and James Farrar – in February 2021, the UK Supreme Court ruled that Uber drivers are entitled to workers’ rights.
This means drivers are paid the minimum wage, holiday pay and pensions. However, this does not apply to Uber Eats couriers who are still classed as being self-employed.
How much money do Uber drivers earn?
Uber pays its drivers the minimum wage – currently £9.50 for those aged 23 years and over.
However, Uber wants to be seen as a ‘good’ employer, stating: ‘Uber treats UK drivers as workers’. In the UK, Uber tends to pay its drivers around £15 an hour as a way to position itself as a better place to work for app-based taxi drivers. Other operators, such as Bolt, have not given their drivers ‘worker’ status.
With a salary of £15 an hour and depending on how many hours they work, drivers can expect to be paid between £500 and £600 in an average working week. According to figures from recruitment website Indeed, this could mean an annual salary of around £20,000. Uber drivers based in London tend to earn the highest salaries, but drivers in other cities such as Manchester or Birmingham can bring home a good wage, too.
However, it is important to note that ‘billable hours’ are only when pickups and drop offs are being made. If an Uber driver has long waits in between ride requests – even if they are showing on the system as being available – they will not be paid for those periods.
What affects a driver’s salary?
There are a number of different factors affecting how much an Uber driver takes home each week, making it hard to put an exact figure on earnings.
Many of these factors will be out of your control, such as:
- User demand
- Fuel costs
- Maintenance costs
- Other running costs, such as taxi insurance cover
- Traffic calming measures, such as the Ultra Low Emission Zone (ULEZ) in London and Clean Air Zones (CAZs) in other cities
Other factors you will have more control over. These include:
- Where you drive
- How many hours you drive
- Whether you drive during busy periods
There is also the Uber service fee to take into consideration. This increased from 20% to 25% for all drivers in July 2021. The fee is taken directly from your wages and is put towards app development and customer support.
Another cost you will have to factor in is taxi insurance. It is up to you, the driver, to insure your car. Insuring a vehicle for business can cost more than domestic car insurance. So what does taxi insurance cover? Benefits change from provider to provider, so make sure you do plenty of research and get a number of quotes from specialist taxi insurance companies like the Taxi Insurer before making your decision.
How can you boost your earnings?
There are various ways you can maximise your earnings as an Uber driver – one is through in-app promotions. This could be completing a certain number of trips in a certain amount of time or signing into both Uber and Uber Eats during busy times and mealtimes.
Another is maximising the real-time information that is available on the app. This will guide you to the busiest locations, help you track your earnings, and enable you to plan your day by showing key tracking trends.
It’s up to you when and where you drive, but the busier an area, the more likely you will pick up fares. The app also contains useful information about the best times to drive in certain cities.
You might also want to think about driving an electric vehicle (EV) – especially if you are working in London. You will save money by not paying to enter the capital’s ULEZ or Congestion Charging Zone (CCZ). Electricity is cheaper than petrol and diesel. And many customers enjoy the comfort and sustainability of an EV – meaning the potential for more tips and higher driver ratings.
Find out more about making the switch to an EV.
How does Uber calculate fares?
The way Uber calculates fares takes into consideration a number of factors. These include:
- Traffic: How busy the roads are will impact the length of the trip
- Time: Night-time fares are generally more expensive than daytime fares
- Distance: How many miles you need to drive to get from A to B
With so many variables to consider, the app doesn’t not always get the upfront fare spot on every time. For example, if a journey is much longer than expected or you have to take an alternative route (with the customer’s permission), the price may increase once the trip is completed.
Fares are calculated taking a base rate as the starting point for the trip. Rates are then estimated according to duration and distance. The app will also factor in things like the demand for rides in that area, and add a booking fee, as well as any additional charges (such as tolls etc).
Tipping is optional and customers are able to give drivers a cash tip directly or via the tipping option featured in the app.
The importance of Uber driver ratings
A really important part of being an Uber driver is your Uber driver rating. Ratings act as a metric for Uber, revealing how well their drivers are doing. Your driver rating is an average of the last 500 ratings from your riders.
Essentially, the higher your ratings, the higher your fares, tips and opportunities within Uber. Low ratings mean that you could miss out on opportunities or even have your Uber driver account suspended.
Drivers with the best ratings will be given the higher tiers of service and customers are more likely to take rides from highly-rated drivers.
Deactivation of a driver account happens when the company has safety concerns about the driver, has received multiple passenger complaints, or the driver has consistently low ratings.
A driver can get their account reinstated, but they have to earn it through improvement courses. It is not guaranteed you can get your account back once it has been deactivated.
How to rate your Uber customers
Just as your customers are given the opportunity to rate you, their driver, you can also rate your customers.
The app will give you this opportunity at the end of each trip, and will ask for more detail if you give the customer four stars or less. You will be presented with a list of common rider issues that you can choose from. If the issues listed don’t apply to the situation you need to explain, there is an ‘other’ option.
If a trip is cancelled, neither the driver nor the rider will be able to leave a rating.
How to improve your Uber driver rating
If you want to keep your driver ratings high, here are five things to bear in mind:
1. Stick to GPS: Even if you think you know the best route, always follow GPS directions. The customer wants to see you are taking the quickest route and not risking getting stuck in traffic.
2. Never hold your phone: Safety is paramount when you’re driving, so be sure to mount your phone. Always go hands-free.
3. Stick to small talk: Some customers will get into your car and be keen to chat. Others will prefer no conversation at all. If conversation is on the cards, keep it light. Steer clear of anything too personal, heavy, or detailed. Check out our guide on how to make conversation with passengers.
4. Keep your car clean: Your car needs to be clean inside and out. Pay special attention to handles, buttons, seats and windows. A sparkly-clean window really could do wonders for your driver rating!
5. Get your paperwork in order: Keep on top of your car maintenance. You might be able to block out squeaky brakes, but your customers may not. And don’t forget taxi insurance, it’s essential you have it. What does taxi insurance cover? It’s essential that you read your policy documents to see if you’ve got the right cover for your circumstances.
Reasons your Uber driver rating might be falling
Any customer can leave a rating for their driver at the end of their ride. Passengers are asked to leave their rating immediately and all ratings are anonymous.
A 5-star rating is what you are aiming for. Anything less than that and Uber will ask the customer for details on what could have been better or if they have any concerns about their driver.
The reasons a customer gives a poor driver rating can vary, however common causes include:
Arguments: Customer service is key, so keep your anger in check and don’t challenge or complain about a customer’s behaviour.
Mistaken identity: This is not a common issue, but sometimes Uber drivers will pick up the wrong person. At the end of the journey, the correct passenger is then asked to rate you. Always ask the passenger to confirm their name – and make sure they know your name, too.
Not taking the fast route: This isn’t particularly fair, but sometimes customers will feel you didn’t take the most efficient route. Avoid this by mounting your phone and following GPS directions.
Unsafe driving: Illegal manoeuvres, speeding or near misses are all definite no-nos. Drive carefully and safely at all times.
How do you become an Uber driver?
Before you start transporting customers from A to B, you will need to meet certain criteria set by Uber. Essentially, you need to be at least 21 years old, have a right to work in the UK, and have a valid UK driving licence. Other checks include a medical evaluation, the model and age of your car, a local map test, and an enhanced DBS check.
You will also need to have a private hire licence and a smartphone.
It is important that you have insurance designed for taxi drivers. If you’re wondering ‘what does taxi insurance cover?’ or what level of taxi insurance you need, speak with a specialist like the Taxi Insurer today.
Finally, you will be required to attend an induction day – a free session that gives you information about Uber and what it is like to work for them.
What does taxi insurance cover?
Uber doesn’t class itself as a private taxi service, however in legal terms, all Uber drivers are taxi drivers. The law states that anyone who drives a car used on a commercial ‘hire for reward’ basis must take out car insurance. Uber does not provide taxi insurance cover. Drivers are expected to arrange their own.
If you are driving a car as an Uber driver and only have standard car insurance, your policy will be invalidated.
So, what does taxi insurance cover? Depending on the level of insurance you choose, your policy will cover you in different ways:
Third-party: The minimum level of cover you require to drive a taxi on UK roads. You’re covered for injury or damage you cause to other people while driving.
Third-party, fire and theft: You are covered if your taxi is stolen or is damaged by fire. Again it covers you for injury or damage you cause to other people while driving
Full comprehensive: You get everything you would with third-party, fire and theft insurance, and more. It can also cover you for personal injury and accidental damage – although the level of cover will depend on the policy.
It is important to note that no level of taxi insurance will cover you for accidents caused by unsafe or drink/drug driving. Nor will you be covered for theft if the car keys were left inside the car. You must also be sure that you are working as an Uber driver within the area covered by your insurance policy.
Finally, it is a good idea to make sure your third party liability insurance (if you hit someone or something) is comprehensive.
Factors affecting Uber drivers’ insurance cover
In order to calculate the cost of and what is covered by your taxi insurance, providers will consider a number of factors. These include:
- Home address
- Areas you work in
- Overnight parking
- Age
- Driving experience and history
- Type of vehicle you drive
If you drive a taxi in a busy city, but live in a more rural location with safe off-street parking, you may be able to bring the cost of your insurance down. From an insurers’ perspective, the more miles you clock up, the more likely you will be involved in an accident. However, if you keep a clean driving licence, stick to the Highway Code, and keep your no-claims bonus, you will be considered a less risky driver in insurance terms.
As well as asking yourself ‘what does taxi insurance cover?’, you need to think about costs. To ensure you find reasonably priced insurance, make sure you get a number of quotes and speak with specialist taxi insurance providers.
How to reduce the cost of taxi insurance
When looking for an insurance policy, you need to consider two things. What does taxi insurance cover? And how much does it cost?
The way to get the best possible rate is to do plenty of research, but there are other things you can also bear in mind:
- Pay premiums annually to avoid paying interest on monthly payments
- Instal cameras in your car
- Park your car securely overnight - in a garage or on a driveway
Benefits of becoming an Uber driver
There are plenty of reasons people decide to become Uber drivers. It’s up to you to decide whether it is the right job for you, too. Here are some of the benefits:
- You can be your own boss, working as much or as little as you like to suit your lifestyle. Basically, your shift starts as soon as you log into the app. You can make it your full-time job or keep it as a part-time side hustle.
- The hours are flexible and you work on your own terms. This means you can fit driving around another job.
- You get to meet lots of people all the time, so it can be a great option if you are a sociable person.
- Passengers – as well as drivers – are rated, so you can avoid customers who may cause you trouble.
Find out more about the difference between Uber and other taxi services.
Stay protected with specialist taxi insurance
If you decide to become an Uber driver, your vehicle will suddenly transform into your business space. With that in mind, you’ll want to protect your vehicle with specialist insurance.
Taxi insurance premiums might be more expensive than conventional car insurance prices, but by speaking with a specialist provider, such as the Taxi Insurer, you can find cover to suit your needs and budget.
What taxi insurance cover? What is the best quote for your circumstances? Get all the answers from the team at the Taxi Insurer and start earning more money as an Uber driver today.