Opinion

Is It Still Worth Being an Uber Driver in Singapore in 2016?

car ownership singapore

Peter Lin

0 Comments

12
Shares

My Facebook news feed has recently been in an uproar about Hollywood’s whitewashing of traditionally East Asian characters. First, it was Tilda Swinton as The Ancient One from Marvel’s upcoming movie Doctor Strange.

Then we had the first look at Scarlett Johansson as Major Motoko Kusanagi in next year’s live-action adaption of the manga classic Ghost in the Shell. Either news story would’ve been pretty controversial on its own, but to have them hit us back to back has really driven home the point.

 

Wait, what has whitewashing in Hollywood got to do with driving with Uber?

Uber drivers have been going through an uproar of their own recently, as a result of two announcements that came back to back last week. It was earlier announced in Parliament that Uber and Grab drivers would soon have to undergo safety training, medical and background checks as part of a new Private Hire Car Driver Vocational Licencing (PDVL) framework.

In fairness, the new regulations aren’t really that much stricter compared to the existing requirements that Uber has already implemented for their drivers. The main difference? Uber previously required drivers to have a valid driving license that is a year old. The new regulations require a two-year old driving license at least. Drivers would also need to attend a 10-hour PDVL course (and yes, there will be exams). All this is expected to be implemented by early next year.

 

Hmmm… that doesn’t sound too bad for Uber drivers…

There’s more. Barely a day after the PDVL was mentioned in Parliament, Uber then announced that there would be a 15% fare reduction for uberX rides starting this past Thursday. Essentially, while that means that uberX riders will be rejoicing, drivers can expect to take home less per ride. That’s not going to sit well with drivers.

Uber’s reasoning for this move is that lower fares would encourage more riders, and hence drivers would get more business. According to Uber, similar fare reductions have seen success in other countries, but in places like the US, Australia and South Africa, these fare cuts have resulted in some drivers boycotting Uber and going on strike.

 

With this price reduction, is it cheaper to take a taxi or an Uber?

The way Uber calculates fares is based on both distance travelled as well as time taken. After the fare reduction, Uber now charges a base fare of $3, $0.45 per kilometre travelled, and $0.20 per minute. Previously, it was a base fare of $3.50, $0.50 per kilometre travelled, and $0.25 per minute.

Let’s see how Uber compares with a Comfort Hyundai Sonata, which has the cheapest flag down rate of $3.20. Regardless of taxi company, taxi charges in Singapore are generally the same – $0.22 for every 400m or thereafter up to 10km, for every 350m or thereafter after 10km, and for every 45 seconds of waiting or less.

Say you take a journey from NEX Shopping Mall in Serangoon to Clementi Mall at 8pm – it’s about 19km and will take about 25 minutes.

Uber Comfort Hyundai Sonata
Base Cost $3.00 $3.20 (for 1km)
Distance Cost 19km x $0.50 = $9.50 10km x $0.55 = $5.50

8km x $0.63 = $5.04

Total Distance Cost = $10.54

Time Cost 25min x $0.25 = $6.25 Waiting in traffic = $2.65
Peak Hour Surcharge (between 6pm and midnight) N/A 25% of metred fare $16.39 = $4.10
TOTAL COST $18.75 $20.49

 

Based on the calculation, it will be cheaper for Uber riders if the ride occurs during the peak periods of 6am to 9.30am or 6pm to midnight. It will almost always be cheaper if the ride occurs after midnight, since Uber has no official surcharges for peak periods, though there may be surge pricing depending on the time and the location.

However, even with Uber’s reduced fares, outside of peak periods it is still cheaper to flag down a taxi. That’s assuming you can live without the convenience of booking an Uber for free.

 

So what’s in it for Uber drivers then?

In Singapore, Uber has raised its minimum hourly guaranteed fare to at least $25 per hour for non-peak periods, with existing peak period guaranteed fares ranging from $27 to $36 per hour depending on the day and time. Presumably, despite the fare reduction, if uberX drivers were willing to meet the minimum requirements, they would still be able to earn at least $20 per hour (since Uber takes 20% of your earnings).

This minimum hourly guaranteed fare is supposed to protect your earnings, since you’ll earn at least that amount regardless of whether you get good fares or not.

 

What are these minimum requirements?

Uber requires drivers to maintain at least 1.5 trips per hour and at least 2 hours on the road. You will also need to accept at least 80% of total trip requests and complete at least 65% of those trips.

 

So… is it still worthwhile to be an Uber driver in Singapore?

As we pointed out earlier, the PDVL framework that the government is introducing is not very different from the existing requirements that Uber has for their drivers. Though it’s still early to say for sure, we did predict that new regulations would eventually lead to higher costs. But for now, the real question for current and aspiring Uber drivers is whether they are willing to take advantage of what should be a higher demand.

With these fare reductions, it’s even more important that Uber drivers try to achieve the minimum requirements for incentives. In order to maximise their earnings, Uber drivers will need to be smarter and more strategic in the way they choose their routes and their customers. While these changes might turn off a good number of Uber drivers, I suspect the majority will still take advantage of the flexibility of choosing when and where to work.

 

Are you a current Uber driver? How have you been affected by the fare reductions? We want to hear your story.

Keep updated with all the news!

Tags: ,

Peter Lin

I am the poster boy for reinventing one's self. I've been a broadcast journalist, technical writer, banking customer service officer and a Catholic friar. My life experiences have made me the most cynical idealist you'll ever meet, which is why I'm also the co-founder of a local pop culture website. I believe ignorance is not bliss, and that money is the root of all evil only if you allow it to be.

  • Lee Lay Khim Cindy

    Hi, I am a uber driver but since last Thursday I hv stoped driving with uber this is because of the 15% less after my last trip from Hougang to Changi Airport where the fare cost only $14.10 they paid me $11.28 after 20% less, here I would like to make it more clear, this trip takes 17min 16km so my oil cost $2.40 which means I only take back $8.88 I can say is lesser then tis amount cause I hv to pay rental for the car also, Uber said give us incentive but we hv to hit 1.5 trip per hr Which means in 3hr I hv to hit 5 pax but they must know one thing during peak hours everywhere traffic jam so is a bit difficult for me who stay woodlands which highway to city always jam n i cant reject or cancel any trip that goes long distance which will also affect my incentive, let said my first trip is gg town n heavy traffic jam that means that morning i will be difficult to hit my target unless my 4 other trips is very short distance n also sometimes we hv to travel 5 to 8 mins to fetch a pax n still hv to wait another 5 mind for them to come down all tis timing has already wasted, let me share with u one more thing, nowadays many ppl driving uber so we now can’t easily get another pax after ones alight compare to last tme, why I never go for their incentives cause I always missed 1 or 2 trip to hit, tell ur one thing I really pity those ppl whose car petrol cost $0.20 per km wonder how they survive on the road. One more thing please don’t compare uber with taxi cause we r using petrol not diesel n taxi company dont take 20% from their every trip n they also give good welfare to their drivers.

  • Lee Kian Meng

    Hi I am a Uber driver with their XL programme. I own the car and it is fully paid.
    Uber as an apps and service provider should consider several factors when they do a pricing adjustment base on local costs that affecting their drivers.
    1st: Uber does not own it’s driving assets therefore they have NO vehicle maintenance, road tax to worry about.
    2. Petrol cost. Yes, we are using Petrol and not diesel. And we do not have special incentives like taxi companies.
    3. TIME, Opportunity Cost.
    Uber, must realise that locals drivers are from all walks of life. If they do a survey on their drivers ratings, they will properly aware that drivers with higher ratings are generally work in service sectors or sales/marketing sectors. Therefore generally ,counting the efficient earning ratio will not be too difficult for them.

    Uber, a 2 cents worth from me, to be able to sustain and excel in it’s model and compete with stronger compeitors,
    1. they must able to forgo the BIG Chunk 20-25% profits they are collecting now.
    2. they must understand by rewarding the ground workers = drivers, more, they in turn will get even stronger and earn more market share in terms of drivers numbers and ridership.
    3. Genuine & Sincere – is the KEYWORD in this competitive country which Large Domestic Corporate rules here. Win the Hearts and Minds of the locals and you will have both wealth and strong support of the ground forces behind you.
    If Uber is reading this and like to contact me, email is: [email protected]

  • DNKK

    Uber advertisement for drivers claimed that “Earn $5,000/month” , yes one can earn that amount of fare, but at what cost? How many hours you need to drive everyday, how much you need to pay for that rental car, how much is the petrol cost and Uber fee of 20%. Your actual nett earning is just a fraction of what they claimed, it is thus definitely NOT WORTH THE EFFORT AND TIME for such “partnership”.

    Even if you use your own car, your operating cost per km is just too high, about $0.32 per km as shown, this figures is very conservative and considered on the low side. If you were to work out based on what Uber charge riders and than nett to drivers, you would not want to drive at all. WASTE TIME AND EFFORT

  • An

    I join uber 3 months ago. And after 2 weeks I join. They lower down the fare. I feel so unfair. I feel like a cheap low level labour. Singaporean just like to take advantage of this kind of low fare. And now the uber pool is another way of showing that Singaporean and uber are taking advantage of the rider. Do you really see a need to drive for uber. The answer is NO. For uberx the commission for uber is 20 percent. Now for uberpool. The commission is 30 percent if you are pooling. I have already calculate if 1 person order uberpool n not able to pool for customers the total lost is 45%. If able to pool for more customer. The total lost is 65%. Why be an idiot n drive for uber. Tell them to get the fuck out. They are not being kind to the driver. They treat driver like shit. Trying to bullshit drivers. Think before you do the rental from lcr. They r also not worth trusting. I have been through it. I hope to share to those uber driver and also those who want to join uber. The referral and signing up incentives will end up back to them. Hope uber singapore driver will wake up from this dream.