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Although it is not possible to sign up as an Uber driver unless you have your own vehicle, there is a more practical way to minimise the initial cost to start your rideshare business.
Since you are considering your journey as a sole trader, it is important to map the financial liabilities to set up your own business. For starters, it is important to understand whether Uber covers your business expenses:
- Does Uber pay for the fuel?
No, you have to cover the charge of running your rideshare vehicle by yourself.
- Will Uber cover my commercial vehicle insurance?
Every time you accept a pick up on the Uber Drivers app, Uber maintains a commercial automobile insurance on behalf of you for that particular ride. Similar for each time you accept a ride on their app.
- Does Uber pay for my accident insurance?
Uber does have a ‘support insurance’ policy in case any unsafe incidents occur. This is investigated and the driver has to be eligible for insurance coverage.
- Will Uber pay for regular vehicle maintenance expenses?
No, Uber is not responsible for any extra maintenance costs like washing, customisations or sanitation for your vehicle. In fact, maintaining your commercial vehicle logbook is your own responsibility.
Now that we have cleared up the four main business expenses that you have to pay for, it is easier to start thinking about managing the costs of your sole trade.
Here are the three easiest ways to cut down the cost of owning your vehicle:
Upgrading your old car
If you have access to an old car that can be tip-topped with some remodelling then don’t shy away from doing so. It will save you tons of money and can be tagged as an immediate business expense that you will lodge for tax savings at the end of the year.
Instead of waiting around for a full year to lodge your vehicle purchase for tax returns, you can easily lodge for returns on upgrade costs once you have acquired your own ABN.
Purchasing a second-hand vehicle
Second-hand vehicles are available at huge discounts because of minor out-dated features or mendable damages. Some of them are even brand new but available on online auction sites because of several reasons like the previous owner being unable to pay off its debt.
You can browse such deals on many certified websites like www.auto-auctions.com.au and www.pickles.com.au .
Purchase with a loan
Almost like a ‘pay as you go’ plan, you can choose the debt repayment timeline and purchase a car at a low interest rate. This way you can start driving with Uber at an initially low cost of acquiring your vehicle and as your earnings grow, pay off the debt gradually.
There are several car loan plans available with banks across the country and our tax gurus can help you find the best suitable options for you!
Always remember
Uber will accept any car as a passenger vehicle as long as its manufacturing year is no earlier than 2001. However these rules depend on key factors stated by Uber Australia such as the state your vehicle is registered in, the area you will drive in and the Uber Car model you are applying for.
More importantly all applicants must be legally 20 years or older to drive for Uber, have a valid licence and have your vehicle already CTP insured.
Starting out as a sole trader can be intimidating but you will always find us there to support you! From tracking your business expenses and tax lodging to creating self-employed income benefits for yourself, MyGigsters has your back. We are one download away.
