What Does Uber’s Electric Car Announcement Mean for its Drivers?
Following a successful 12-month trial of electric vehicles (EVs), rideshare giant Uber is now offering a 50 per cent reduction in the Uber service fee – from 27.5 per cent to 13.75 per cent – for gig workers driving an electric car. The service fee reduction is capped at $3,500 per year per driver-partner.
Up to 2500 EV drivers will be eligible until mid-2025. It is estimated the program will cost $26 million over three years. Uber estimates that electric cars currently comprise less than 1 per cent of its car network.
Through the fee reduction, the gig economy operator is hoping to help overcome the main barrier identified by drivers regarding EV uptake – the cost.
The incentive program will reduce the running costs and total cost of ownership. The upfront cost of an electric car, however, remains unchanged.
This guide will cover everything Uber driver's need to know about switching to an electric car. Key things we’ll cover include:
💲 The financial case for electric cars and Uber drivers
🔌 How practical electric cars are for Uber drivers
🛒 An Uber driver's take on ‘must haves’ in an electric car
🏆 Our top five electric cars for Uber drivers
🏛 Government EV incentives for Uber drivers
Do Electric Cars Make Financial Sense For Uber Drivers?
Pure-electric cars are likely to make more financial sense than petrol or hybrid cars for a typical Uber driver. Why? Fuel and maintenance savings.
⚡ Electricity is substantially cheaper than petrol. The chart below compares the cost of 'refuelling' a car across different sources.
🔧 Maintenance and servicing are significantly less due to the drivetrain simplicity of electric cars.
Due to the high kilometres travelled by an average Uber driver, the fuel and maintenance savings will quickly offset the higher upfront cost of an electric car.
Cost of ownership compared
We’ve compared the cost of owning and operating an MG ZS EV, one of the best value electric cars in the market, with its petrol equivalent below.
The electric ‘premium’ price tag will be recovered in 1.6 years from the fuel and maintenance savings. After five years, you’ll be up ~$33,000 from the aggregate savings.
Uber driver profit compared
An Uber driver stands to save $13,486 per year from a combination of service fee and running cost savings. Over three years this will amount to $40,458 in savings.
How Practical Are EVs For Uber Drivers?
There is a common misconception that electric cars are not suitable for Uber drivers due to their short range. The reality is modern electric cars have good range, which will more than likely meet the needs of an average Uber driver.
The average electric car range in the zecar database is ~400 km. Electric cars with shorter range can still be practical, so long as they have sufficient access to fast charging points.
Another misconception (which is sometimes true) is that electric cars seldom meet their stated claimed range figure (WLTP is the common measure). But depending on the EV model, there is a good chance that Uber drivers will likely get close to and possibly even exceed the stated range. This is due to the favourable conditions urban driving provides for electric cars: low average speeds in start/stop traffic. This results low wind resistance and more energy recovery from regenerative braking, especially when using one pedal driving mode available in most EV models. Conversely, this type of driving has an adverse impact for petrol cars (except hybrids).
Access to private charging at home will likely mean you’ll get all the benefits of driving an electric car with little downside. With a fast enough home AC charger, you’ll be able to plug your car in at the end of your shift and have it fully charged for the next day.
If you do not have access to private charging, there is a good chance you’ll need to visit the local DC fast charging station in between (i.e. during breaks) or at the end of your shift.
While the charging speeds of modern EVs are reasonably fast, the availability of public charging infrastructure is still limited. At peak times, there is a possibility you’ll be queuing up to charge your car (like waiting 40 minutes for the charger and another 40 minutes to charge).
To help overcome this problem, Uber could take a leading role by providing dedicated charging infrastructure for its network.
Must-have Features in an Uber Electric Car
We recently spoke to Jai, who is an Uber driver servicing Ballarat in his Nissan Leaf e+. Jai’s wish list for an electric Uber vehicle includes:
💰 Inexpensive to own and operate;
📐 Reasonable interior space for passengers;
🎯 At least 200km of range; and
🔌 Reasonable charging speeds (50kW or more).
Jai also shared his thoughts on whether the Tesla Model 3, the most popular electric car on Australian roads, made a good rideshare vehicle.
While he contemplated the Model 3 as an option before purchasing his Nissan Leaf e+, he ultimately wanted to avoid the frustration and confusion of having to explain to passengers how to pop open the Model 3’s flush exterior door handles that don't automatically pop-out unlike upper spec versions of the Kia EV6.
Top five electric cars for Uber drivers
Below we've selected the 5 best EVs for Uber and rideshare drivers. Our criteria for selection included: reasonably priced, good range, acceptable charging speed and sufficient space for passengers and luggage.
Government Incentives For Electric Cars
Depending on the car, Uber drivers should be eligible for the standard state government EV incentives for electric cars. Refer to this guide for more details.
The Labor government has proposed the ‘Electric Car Discount’ which, if approved, will take effect from July 1 2022. You can read more about it here.
Given rideshare vehicles are exempt from FBT, there will be no benefit to Uber drivers.
Due to the nature of the gig economy job, if you own the electric car you can elect to benefit from the instant asset write off which allows you to offset the cost of the vehicle against your income in the year you buy it, reducing your income taxable income tax payable substantially.
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