Uber: Should You Get Behind the Wheel?

By Chris Morey

It seems Uber, in making its move into Australia, has managed to upset a lot of people, from the ATO, through to taxi-drivers and hire-car companies already occupying the market, through to those concerned about the safety of practically unregulated drivers driving around complete strangers.

The one group that is not upset are the customers. Uber customers are finding a cheaper, easier, and often more reliable service. Customer complaints, although not unknown, seem to be few, and certainly no more than the level of complaints about taxis and other related services.

If you are considering becoming an Uber driver, Uber have a basic list of requirements you must meet.

According to Uber, you must be over 21 (having held your licence for at least 3 years), have a suitable vehicle (there is a list of requirements and accepted vehicles) which is in good condition and less than 10 years old, and the vehicle must be registered and insured. On application, a background check is done (criminal and driving history), an induction completed, and then you download the App and off you go.

Part of the current controversy is whether drivers will need to hold any authorisations or licences from state authorities. The current trend is that drivers will need to hold a Driver Authorisation or similar (similar to those offering a chauffeured hire-car service), but not a taxi licence.

Sounds like a simple way to make good money, particularly given you can do it in your spare time, and set your own hours.

Running a business, even as an Uber driver however; is not that simple. There are expenses often unaccounted for including the cost of fuel, vehicle maintenance costs, vehicle insurance, vehicle depreciation, and of course royalties to Uber.

And then there is tax. It is an income stream, and no tax is being withheld by an employer, so you will need to pay tax on this income, at the appropriate rate. The ATO will be watching registered Uber drivers carefully, because this is definitely an industry where cash in hand payments can simply “disappear” and not be reported.

Finally, there is the question of what exactly your legal position is. You are not an employee of Uber. Rather, you are running your own business, as a sub-contractor to Uber. Therefore, all the usual considerations of a business-owner, especially one doing sub-contracting work, apply. Not only the paperwork, but also considerations of Workplace Health & Safety (your vehicle, when being used for Uber, will become a workplace and be subject to regulation), a need for appropriate insurance not just for your vehicle, but also for personal injury, and possibly public liability.

And what about yourself? What if you can’t work because your vehicle is damaged? Standard vehicle insurance will not cover your lost income. What if you are injured? As a sub-contractor, you are not covered by worker’s compensation insurance. Do you need extra insurance (e.g. income protection insurance)?

Ultimately, the Uber question comes down to the same questions and issues facing any potential small business-owner or sub-contractor.

If you need assistance with any business set-ups or concerns, please contact Peter North (Senior Associate, Corporate and Business Law Practice Group) or Chris Morey (Director, Business Law Practice Group) on 03 9629 9629.