Ride sharing company Uber is only surviving because its drivers are earning well below the minimum wage for transport workers, according to a new report released this week.
The Centre for Future Work at the Australia Institute has calculated that Australians driving for Uber’s most popular low-cost service, UberX, are earning less than $15 an hour, compared with the minimum wage of $18.29 an hour, and way less than the $30.00 an hour for casual taxi work.
This equates to about one third of the takings when all the hidden costs are taken out.
A driver’s earnings depend on location
But exactly how much drivers earn, depends on where they live.
According to the report, drivers earn $14.62 per hour on average,, but that rose to more than $18 for those driving in Sydney and Canberra and dropped to under $11 in Perth.
Speaking to Guardian Australia, the report’s author, economist Jim Stanford, said Uber’s business model would collapse without the poorly paid labour.
“The low incomes of their drivers are essential to the escalation of Uber’s market value that has made some people fabulously rich,” he said.
“The company dresses this up as flexibility but the money is so bad and uncertain that it’s only in an environment that people are desperate that this model can work.”
The cost of regular taxis are on average about 40 percent higher than UberX fares.
Drivers miss out on super and leave entitlements
According to Mr Stanford, in addition to the low hourly pay, drivers miss out on other protections and entitlements such as superannuation, workers’ compensation and leave entitlements.
Around 80,000 Australians are driving for Uber, and are considered contractors by the Fair Work Commission.
Drivers are forced to pay for their own on-road costs, registration, petrol, insurance, tax and GST, and the depreciation on their cars.
Writing on Reddit.com, one driver said:
“I do Uber for a job. Half the problem is the Uber 27.5 percent f**king joke of a cut meaning I do 60 hour weeks to survive. We don’t get pensions and we don’t get annual leave even if you do it full time.
“Every $1 I earn I give 27c to Uber and 40c to the Australian government before deductions. So somehow I’m supposed to survive on 33c to the dollar whilst keeping my vehicle maintained.
“I’m now stuck peddling a f**king wheel just to keep afloat and its f**king killing me.”
Uber business model encourages dangerous driving
The Uber business model encourages drivers to work long hours, just to survive, making driver fatigue an issue.
Last year a man was killed in Sydney’s CBD after being hit by a bus after getting out of an Uber.
Uber now forces drivers to log off its app for six hours after every 12 hours, which means drivers are still able to drive for 18 hours out of every 24.
‘It’s a mug’s game’
Miles Heffernan, Director of Litigation at Industrial Relations Claims, said you’d have to be desperate to drive for Uber.
“It’s a mug’s game. The whole business model makes it right for exploitation of drivers, who have to work long hours as they wait for a job to fall in their lap on their mobile apps,” he said.
“I sympathise for those who put in long hours, and perhaps no other employment options, but the sad reality is, you’re not going to get ahead working for Uber.”
If you have been unfairly dismissed from employment, you may be entitled to compensation or reinstatement.
But you only have 21 days to make a claim, so don’t delay!
Please call our specialist team at Industrial Relations Claims today on
1300 045 466