The Upfront Cost of Uber

Uber Upfront Costs

The Costs of Becoming an Uber Driver – By City

It is estimated that over one million people drive for Uber across the globe.

Some of Uber’s drivers work full-time, and others are simply looking to earn extra money while they work other jobs.

A huge factor in determining the overall number of full-time (or part-time) Uber drivers in a specific region is the local cost of becoming a driver

This measure of difficulty is also know as ‘fixed costs’ (or upfront costs).

Rideshare Startup Costs Differ Greatly Across Regions

Rideshare regulatory laws are different all across the globe.

Local regulation often play a huge role in determining whether it’s expensive (and time-consuming) to become an Uber driver, or conversely, whether it’s cheap, fast and convenient.

Certain cities make experimentation with rideshare jobs expensive or highly impractical. This makes rideshare a less effective (and flexible) secondary job in certain areas around the world.

Uber recently commissioned an independent study and tallied a Total Cost (i.e. ‘Fixed Cost or Upfront Cost Index Score’) for a variety of cities, in order to determine which cities were the most expensive (and regulation-bound) locations for prospective Uber drivers.

Below are the Top 10 most expensive & difficult cities to become an Uber driver-partner:

City                                    Country                              Score

10. Las Vegas                   United States                    2.39

9.  Houston                      United States                    2.43

8.  Mexico City                Mexico                               8.55

7.  London                        United Kingdom              11.1

6. Manila                          Philippines                        13.42

5. Rio de Janeiro            Brazil                                  19.34

4. Sao Paulo                   Brazil                                  19.34

3. Singapore                   Singapore                           24.3

2. Paris                            France                                 35.08

1. New York City           United States                      36.2

Differences Between New York and California:

NYC:

In New York City, individuals who wish to work as Uber drivers face incredibly large ‘upfront costs’.

Prospective drivers must pay up to $3,000 in advance of becoming a driver — as well as investing over sixty hours of in-person application and training time (not to mention waiting 2-3 months before accepting their first passenger request).

Orange County:

Existing rideshare regulations in Orange County, California paint a starkly different picture of ‘upfront costs’, when compared to New York City.

By way of comparison, Orange County is incredibly easy to get started as a rideshare independent contractor. While New York scores an extremely high 36.2 on Uber’s scale of difficulty, Orange County registers a low 0.18.

Drivers simply require a background check and brief vehicle inspection — that’s it.

The application process for an Uber Driver in Orange County costs an estimated $15 (or less) and takes a total of two hours of in-person time.

With limited regulations and fast processing times, Orange County qualifies as a flexible and convenient place to start working as a rideshare driver.

Uber recently examined over forty cities across the globe, to better understand how much in-person time (and financial investment) it took to begin working as an Uber Driver-Partner.

Check out the graphic below for a sense of the time & monetary costs:

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What does the data mean for drivers?

After officially becoming partners, Uber drivers reportedly worked 18 hours per week (on average) across 42 cities.

However, for drivers who lived in the most regulation-bound and expensive cities (i.e., the cities with the highest ‘fixed’ or highest ‘upfront costs’), drivers were forced to work longer hours.

According to Uber, drivers in cities like New York had to work ‘’an average of 26 hours per week — 44 percent more than the average across all cities surveyed.’’

Thus, in a location with high upfront costs (such as NYC), only ’’36 percent of drivers work[ed] an average of less than 15 hours per week’’. By comparison, drivers in Orange County — a region with extremely low upfront costs — saw that over 90 percent of drivers were able to work less than 15 hours per week.

The Takeaway

If you live in a region with high ‘fixed’ or ‘upfront’ costs, you’ll likely find yourself following the pattern outlined in Uber’s study above.

That is, expect to find yourself feeling inclined to work longer hours in a city like New York (in order to recoup your costs), but feeling less pressure — and experiencing greater flexibility — in a location like Orange County or Seattle.

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