How Much Can I Make Driving Grab And Uber?


Last edited on 09 Nov 2016





Times are tough and many are looking to earn some extra money.

I was one of them.

What were my options? Relief teaching, working in a café, or thanks to start-up disruption, take part in the sharing economy. When I thought about the sharing economy, the most obvious opportunities like Grab, Uber, Deliveroo, Foodpanda, and Airbnb came to mind. However, given that I didn’t desire to share my room with a total stranger, and did not have the legs to ride around delivering take-out, Uber and Grab seemed the most promising options.

Reading the ads and the testimonials, it sounded like a pretty good deal. You get a sweet ride like a Honda Vezel, the flexibility to make money when you wanted and the convenience of having a car to use.

I decided to apply four years of my BCom to validate this opportunity with my own little market research project.


The Economics

Gathering data from news articles and marketing claims, I found some data on the earnings of private-hire drivers to estimate the actual take-home earnings. It’s important to note that the earnings that are referred to on private-hire car driving ads are gross fares. In other words, it’s before any deductions such as the transaction fee, rental and fuel.

ItemAverage value per hour
Gross fares$20 - $24
Transaction fees from Grab or Uber$4 - $5
Rental (depending on lease duration)$4 - $5
Fuel$3 - $4
Net take home$6 - $8

In general, drivers say if you rent and drive 10-12 hours full-time (8 peak hours) you should be able to make, on average, ~S$250 in gross fares (including peak hour incentives) a day. One private-hire driver mentioned that it takes about 4-5 hours of driving for him to cover his rental and fuel cost, while a part-time driver who drives the peak hours before and after work says he can usually cover running cost and still make some money driving 4 hours. On average, your estimated take-home should be about S$6-10 an hour. Margins improve if you own or have access to a car.


The Experience

Driving a private-hire car can be hard work. Sometimes you drive for 10 hours and barely cover the day’s running cost (rent and fuel). Off-peak hours are tough. Unlike their taxi counterparts, private-hire car drivers cannot get flagged down and have to drive around (burn fuel) to wait for bookings. With high competition and reduced booking activity during these hours, earnings can be significantly lower than peak.

Commercials aside, driving a private-hire is a highly engaging and people-facing job. Even though most riders are pleasant and understanding, drivers do lament that it’s inevitable that they meet the occasional nasty rider who would scold them for taking a longer route or force them to flout traffic rules.

In the words of one driver: don’t get upset or demoralized, just treat it as a means to an end.


Conclusion

Driving a private-hire car full-time isn’t easy, and drivers face their fair share of ups and downs.However, those who persist consider it a decent living that meets their income needs.

On the other hand, driving part-time could be a viable way for a student, retiree or someone between jobs to make some spare cash. Young executives looking to rent a car and drive 4-5 hours a day to defray the cost might also be interested.

Ultimately, the decision to become a private-hire driver is dependent on what you want to get out of it.

Hopefully, understanding the economics and experience will help make that decision easier for you.


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