How to Earn on Rideshare Apps: Requirements, Pay, and More
Rideshare apps have made taxi driving ultra-accessible. However, the requirements to become a taxi Driver and Private Hire Driver are shifting all of the time, with the process differing between councils. This guide looks at what you’ll need to get started as a rideshare Driver, before looking at how to maximise net income.
Essential requirements and platform standards
There are several ways to earn money on rideshare apps: licensing of the Driver, licensing of the vehicle, and the operator’s criteria.
Getting licensed
To become a rideshare Driver in the UK, you must meet some basic regulatory standards, these include
Minimum age requirement: 21 years old
A valid UK driving licence required
EU licence holders must convert to a UK licence before applying
A private hire licence or hackney carriage license is mandatory for all rideshare Drivers. The licensing process involves:
Undertaking an enhanced Disclosure and Barring Service (DBS) background check
Undergoing a medical examination
Proving the right to work in the UK
Licensing requirements do vary between local authorities, and so do the costs. For a clearer breakdown of the costs involved, click here.
Getting the car licensed
Vehicle requirements for rideshare services can be stringent. For example:
Four-door vehicles capable of carrying at least four passengers
Requirement to meet specific condition standards
Council minimum criteria
Documentation requirements are needed when applying to be a taxi or private hire Driver. Proof of address, vehicle registration papers, driving license, and valid private hire or taxi insurance.
Depending on the council, it’s increasingly likely to need to do a knowledge test of the local area, with some councils requiring English language tests, to facilitate better communication between Drivers and their passengers. This ensures better safety overall.
Ridesharing operator requirements
Operators have their own requirements, but below is a general guide to what to expect.
Insurance
Specialised coverage known as private hire insurance or taxi insurance is required.
Platform-specific requirements
Completion of training modules.
Familiarisation with app features and operational procedures.
Some taxi services, particularly those that are more specialised, may require much more advanced in-person training. For example, dealing with the disabled community, VIPs, children, and potentially first-aid training.
Understanding earnings structure
Ridesharing apps are growing their presence in the market, and upwardly trending revenue figures showcase that. The potential earnings for UK rideshare Drivers rely on this popularity.
How much a taxi Driver using a rideshare app earns is down to how many rides they complete, the price of those rides, and the commission the operator takes.
Historically, large providers like Uber have had unprofitably low fares to attract users. This grew the user base and the number of rides Drivers would take, however, earnings per ride were low. This was the industry norm, in part because the market was dominated by Uber.
However, two trends have occurred which are helping ridesharing app earnings for Drivers. Firstly, Uber couldn’t sustain annual losses forever, particularly when interest rates (and therefore debt repayments) rose. After burning through $31.5 billion in losses, Uber has increased per-ride fares, partly to attract more Drivers, but partly to finally become more profitable.
The second trend is the introduction of more rideshare apps. This has given Drivers more opportunities to find alternatives to Uber's high rates. It has also meant that Drivers can work for multiple apps, or perhaps find higher-quality alternatives.
Average Earnings
Ridesharing apps rarely use a meter. This is because some apps use surge pricing, which increases ride costs during busy periods or in rural areas.
Furthermore, not all apps use surge pricing, and most allow part-time work, so it’s very difficult to understand the average earnings of the modern Driver. Some data shows that Uber Drivers earn £16.50 per hour, and some show £18.31 per hour. What is more clear, though, is that a minimum wage guarantee now exists for Uber Drivers.
Bonuses and tips
It’s also important to consider bonuses and tips. Some rideshare apps have platform-specific incentives that encourage loyalty and working more. For example, Bolt Drivers can enter a monthly prize draw on completion of 100 trips and becoming a top 10% Driver. There are also some referral schemes and gamified point systems that can unlock tiers and perks.
Tips are another way that taxi Drivers have historically earned money. Fortunately, most apps allow Drivers to access tips free of commission. Unfortunately, it is less common for passengers to tip on a rideshare app, with only 16% of rides being tipped.
How to maximise earnings
When to work
Surge pricing, also known as dynamic pricing, means that fares adapt to circumstances to keep supply and demand in a delicate balance. This means that when demand is high, such as during rush hour on a weekday, pricing is increased to attract more Drivers.
While not all apps use surge pricing, it’s something to keep an eye on as a Driver as it can boost per-trip earnings. Adverse weather can also trigger higher prices alongside events like New Year’s Eve and local concerts.
Therefore, it’s wise to keep a calendar of local events, as well as being up to date on weather and traffic. Fares are also higher at night, so this is a good time to boost per-trip revenue.
Where to work
Location is also important. Generally, large cities will be busier and with higher demand. However, there may also be more Drivers, and this could lead to more competition over trips (i.e. fewer trips) or lower fares (surge pricing works in the opposite direction, too).
There is no way to predict which town or area will perform the best. Our best recommendation is to be open-minded, experiment with different regions, and focus your time on the area that best fits you, and your working style.
Platforms and contracts
Certain operators have several contracts, under which Drivers can earn. For example, operators may have contracts with a local airport car park, where they take flyers from their parked car (i.e. a cheap rural car park) to the airport, ensuring frequent work.
Likewise, the Free School Transport scheme under local authorities is a way to ensure children can safely get to school. Operators Zippe Transport are approved by local authorities to supply transport under this scheme, providing a reliable flow of fares for Drivers - and safe transport for children in need.
With this in mind, it’s important to pay attention to how well-positioned an operator is within their market.
Commission, fees, and congestion
The operator a Driver works for also determines their commission, which is hugely influential to take-home earnings. These are just hypothetical figures, but it might be that Uber provides 30% more fares, but fare prices are 20% lower and commission is 10% higher. All in all, the Driver may be working harder for less money.
Likewise, some of those fares might be to an airport, which can cost to enter and park. Some apps pass these costs onto the customer, some do not. There is also the congestion charge that needs to be factored in when working in London (black cabs do not, but Uber Drivers do, for example).
Customer Service
Finally, taxi driving is a service, and the better the Driver performs that service, the more likely they are to receive a tip. Increasing tips can be done by driving safely, always taking the optimal route, helping customers with bags and doors, as well as being polite and conversational (when they are receptive to it).
Furthermore, the operator and location the Driver works in also influence tips. As highlighted earlier, Uber Drivers aren’t all that likely to receive a tip. However, a Driver who serves the same customers in a small community may be more likely to receive frequent tips. Research shows familiarity between the customer and workers increases tips.
Keeping costs down
It’s important to not look at being a rideshare Driver as a normal wage worker, but instead as a business. Net profits are what really matters, and revenue is only one-half of that equation. Here are some ways to boost net income by cutting costs.
Cutting fuel costs
Fuel is one of the largest expenses to any Driver, particularly with today’s high prices. There are three ways to cut fuel costs.
Vehicle choice
First and foremost, the fuel efficiency of the car is the most important thing. This is where electric vehicles can pay off, though hybrid cars can offer a nice balance of reliability and efficiency.
A classic black cab LTC TX4 is 30–36 mpg, compared to over 90 mpg of a Toyota Prius. That could be the difference of thousands of pounds per year for a full-time Driver.
Driving technique
The way a car is driven also impacts its fuel efficiency. Fast acceleration and volatile speeds use unnecessary fuel. Some apps can help direct Drivers to be more efficient in the way they drive.
Maintenance
Car valet and cleaning is another big expense for Drivers, but this can be reduced by Drivers keeping their cars clean after every shift. Not only will this improve customer satisfaction and potentially tips, but it can also reduce the likelihood of more serious problems. Regular inspections of the car can identify problems early on, before they become serious.
Accounting
Finally, work-related expenses are typically tax deductible. This means that Drivers should store receipts, track mileage, and keep an accurate record of spending. Then, an accountant can minimise the amount of tax the Driver pays, helping boost their after-tax earnings.
Conclusion
The UK taxi industry continues to swing towards the adoption of rideshare apps. Although many major operators have problems, it is still possible to earn a good, reliable income using modern apps. While the onboarding process may differ between apps, the base requirement remains the same: get the Driver and vehicle licensed with the same local council.
Income considerations are required when choosing a platform, such as reliability of work, fare prices, and commission, though it’s not all down to the operator.
Drivers themselves are responsible for a high quality of service, tips, and route planning.
It’s also important to reduce costs via fuel efficiency, appropriate maintenance, and proactive accounting.
