How much Uber drivers pay when renting cars in South Africa

Many South African Uber drivers cannot afford to buy their own vehicles, so Uber offers them the option of renting service cars from R2,300 per week.

Alternatively, Uber offers the option to rent the vehicle for “free” with a fixed salary or proportional earnings.

Conventional rental services are too expensive for Uber’s business model, due to its daily fixed charges and the extra costs charged per kilometre over the daily allowance.

Consequently, Uber has built its own marketplace where it lists cars that can be rented, both directly and through third-party individuals or businesses.

Uber drivers can choose from three categories of cars: rental, fixed earnings, and earnings share.

These rentals allow drivers to pay a fixed weekly or monthly fee for a car and keep the full share of their Uber earnings, minus Uber’s commissions.

For the fixed earnings model, drivers receive a set salary per hour, week, or month, with certain prescribed targets.

The earnings share option only requires a refundable deposit, with drivers paying a certain percentage of their earnings to the vehicle provider.

The renters may also offer benefits with these cars, such as covering maintenance, fuel, or insurance.

After analysis of the marketplace, the most affordable vehicles were found to be the Hyundai Grand i10, Nissan Almera, Renault Kwid, Renault Sandero, and Suzuki S-Presso.

These options were all available from R2,000 per week from third parties, while Uber’s cheapest option, the Toyota Agya, was R2,300 per week.

The other two models it offers are the Kia Picanto and Volkswagen Polo, for R2,500 and R3,000 per week, respectively.

Breaking even

Estimating the exact number of rides an Uber driver has to complete to cover the cost of their rental is difficult.

This is because Uber fares can vary significantly depending on the area, demand, and ride type, as well as the additional costs of paying Uber a commission and covering fuel expenses.

Uber recently informed MyBroadband that it takes a 25% cut of all driver earnings.

As an example of this, a 5km trip on UberX during the middle of the day in Pretoria cost R75 on Uber Go and R89 on UberX, working out to an effective cost-per-km of R15 and R17.80, respectively.

However, after the commission, this is reduced to R11.25 and R13.35 per kilometre on Uber Go and UberX.

Adding the fuel cost, using the current inland price of unleaded 93 petrol, would cover one kilometre in the S-Presso at approximately R1.02, reducing the Uber Go earnings to R10.23 and the UberX earnings to R12.33.

Once fuel costs are deducted from their earnings, an S-Presso would make R51.15 on a 5km Uber Go trip or R61.65 on UberX.

Based on this data, covering the R2,000 minimum cost of the weekly rental fee, they’d need to cover 196km on Uber Go or at the rate for our trip.

Using Uber, they make only 5km trips; they would need around 39 Uber Go trips to cover the rental cost.