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Misleading information for driver earnings on Uber website and in other media.

I wrote to the ACCC and consumer affairs raising concern about an advertisement Uber has regarding driver earnings. See what I wrote below.

 

RE – Misleading information for driver earnings on Uber website and in other media.

I write to draw your attention to information being advertised on the Uber website for estimates of driver earnings which I have also heard reiterated on radio and TV advertisements. This can be found here –

https://www.uber.com/au/en/drive/how-much-drivers-make/

The calculator estimates earnings from gross trip fares and suggests an average of $1,335 per week for 40 hours of work being the number of hours when driver-partners were online in the app. While there might be some legitimacy to the figure itself, it is categorically misleading in the way it is represented.

Although it is disputable, there may be potential to turnover $1,335 in fares for a 40-hour week ($33.38 p/h) however this is a far cry from what a driver might earn as informed by the ‘earnings calculator’. In the first instance, the gross fare includes Uber’s commission of 27.5% as well as GST payable by the driver who is required to remit GST on every dollar earned. These factors combined, immediately reduces the estimate by close to 40%.

Further to this, it is known that Uber remove their commission from the gross fare and drivers are left to remit 10% GST on what remains after the commission is paid. As an example, a $90 fare would incur 10% GST to a total of $99, however Uber removes 27.5% in commission from the total ($27.23) leaving the driver to remit to the ATO $9 in GST from the $71.78 that remains. This is an outrage.

There is a disclaimer on the website which states – ‘The estimate provided does not include costs for which you will be responsible, like fuel, maintenance, and others.’

This is an understatement. If we remove 40% for commissions and GST from the $1,335 weekly earnings estimator, we are left with a mere $800 (or ~$20 p/h) from which fuel, tolls, insurance, maintenance, vehicle leasing, income tax, BAS preparation/accounting, mobile phone, superannuation and leave provisions all need to be paid.

Fuel alone in today’s environment, would be at least $200 per week after 40 hours of driving. This leaves only $600 in earnings (or $15 p/h) not inclusive of the multitude of other costs I have listed above. Perish the thought if the driver happens to lease a vehicle as well through one of Uber’s partners which currently costs between $350-$400 per week.

I put to you that the ‘earnings estimator’ is a deliberate misnomer designed to dupe people onto the hamster wheel that is Uber and their burn and churn gig economy model. This requires an immediate investigation.

It is no secret that rideshare drivers are some of the lowest paid workers often with a limited understanding of the industry into which they have entered and who are naïve to the costs associated with the business. This sort of false and misleading advertising by Uber does nothing to improve this for anyone, promising the world but in fact setting drivers up to chase their tails as the next working poor. It is irresponsible and deceptive and must be stopped.

The Uber website provides all sorts of information in the FAQ section yet fails to list what the other costs are which drivers might be responsible for. Not least of which is their commission. It is impossible to find any information on the Uber website for the exact commission they charge. It should be mandatory for them to at least disclose their fees and charges openly and honestly.

I would like to draw your attention to two separate items in support of this issue demonstrating just how far from the truth the Uber earnings calculator sits.

One is a website from an accounting firm, DriveTax who market themselves as Uber Tax Accountants – Teaching rideshare and food delivery drivers how to manage their taxes.

https://www.drivetax.com.au/how-much-will-i-actually-make-from-uber-driving/

The other is the result of a recent survey conducted by the Transport Workers Union TWU from 1,100 rideshare drivers about their experience.

https://www.twu.com.au/wp-content/uploads/2019/05/Rideshare-Survey-Infographic-FINAL.pdf

The accounting firm has produced the above resource entitled – ‘How Much Will I ACTUALLY Make From Uber Driving?’ based on their knowledge of the industry submitting returns on behalf of many rideshare drivers. Ultimately, their informed and comprehensive calculations based on real data and industry costs, estimate earnings for an Uber driver of $26 before income tax for every $100 of gross fare turnover. Put simply the real earnings of a driver who may or may not turnover $1,335 gross per 40 hour week as estimated by the Uber calculator would be closer to $347 per week before tax or $8.60 per hour.

Similarly, the survey conducted by the TWU suggests that driver earnings are closer to $16 p/h after company fees and taxes (GST) but before any other costs such as fuel and insurance etc. Further, it was recorded that 85% of survey respondents are unsatisfied with their earnings, 48% say there is a lack of transparency on payments, 74% feel that the company commissions are excessive and 62% consider payments are insufficient to save for superannuation or leave.

I would suggest that the disappointment of drivers to learn what their true earnings are is directly linked to the expectation created by Uber themselves in the inflated earnings estimates they provide on their website. They should be held to account and forced to disclosure fully and comprehensively all expenses a driver may be responsible for and provide a realistic estimate of earnings.

I trust you will find this information concerning and I seek your assistance to investigate the misleading conduct of Uber on these grounds. I look forward to your considered response.

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  • Emma Louise Gardner
    published this page in Latest News 2022-08-14 16:07:17 +1000