Blog Post

Need the services of a Tax Advisor:  www.sydneytaxadvisor.com.au

So you are considering becoming an Uber driver in Sydney Australia?




A common question asked, is what are my requirements to be a driver?  I have summarised below a list of requirements that we would recommend before you even turn the ignition key over and begin your Uber business.

I must say I love Uber.  Its a great service and a big congrats to the State Government for giving it the tick of approval.  It is fast gather pace and many are not only considering using the service as a rider, some are now becoming drivers.  So what does it take?

 

Note, this is a general summary and should not be considered taxation, legal or insurance advice.  We recommend you contact Uber, RMS or your insurer if you have queries.

What does it take to be an Uber driver?

This involves getting registered with Uber.  It’s a relatively straight forward process however you will need to visit their office (as detailed below) which I understand is in Concord (closest to Sydney CBD) in NSW if you live in that area.

Prior to visiting Uber you will need the following:

a) RMS History report – Cost $22

You can go online and print this off: Click Here  Note, the cost may be reimbursed by Uber so ask them.




b) Current License

Note this must not be provisional and you must have held this for at least 12 months.  You can upload this on site prior to your meeting with Uber, or simply take it with you when you visit them.

c) Car

The car requirements are listed here:  Click Here  Generally it will need to be no older than 9 years.

d) Registration papers

It doesn’t appear to matter that the car is not owned by you, what is important is that if the car is owned by somebody else that you are nominated on the insurance policy as a driver (note issue below with respect to business registration – private car drive authoirty).

e) Insurance papers

As mentioned above, you will need to be nominated on the insurance papers.  WARNING: not all insurance companies cover ridesharing (Uber).  I understand that NRMA have a specific category “Rideshare” when completing your comprehensive cover.  It appears to only be appropriate where you rideshare on a part time basis.  If you are planning to be a fulltime UBER driver you will likely need specific coverage outside of this category.  NOTE, it is in our experience that most mainstream insurance companies DO NO cover rideshare. So check with your insurance company (including NRMA to ensure you know where you stand).

Uber do have insurance, however, it may not cover for damage to your car.

f) Criminal Record

Uber will conduct this on you at their expense.  However, see below as you will also need to apply separately.

g) Vehicle Check

When you visit Uber with your papers (per above) they will also conduct an inspection of your car, therefore, ensure the car is clean and tidy.  If you have dents in panels, ensure they are fixed as the car will likely be rejected.

WAIT THERE’S MORE…….!




Once Uber tick off all the above, around 5 days later you will be able to access the driver app and begin driving.  There are many great YouTube vids of how the App works.

Before you begin driving, you need to do more in our view to ensure you are compliant with NSW transport rules.  Note, Uber appear to state the authority card is “optional” which is a little confusing.

In December 2015, the NSW State Government brought in new rules with respect to Ride sharing services.  According to their fact sheet (click here) You will need a Private Hire Vehicle Driver Authority.

So what does it take to get one of these and what does it cost?

a) Drivers License – see above, you should already have this

b) Medical Assessment Report – $110 to $165

You need to visit a GP and have a medical assessment report completed (Click Here).  It will cost between $110 and $165 in our experience and not covered by Medicare).

c) Criminal Check – $50

You can go online (many authorised providers) and apply for a report.  You need to submit identity such as license and passport.

d) Two passport type photos – $15 – $20

This is required to submit with the form.

e) Application fee – $45

Once you have all the above, you can send to RMS and wait (usual waiting time is 4 weeks +).

f) Registration – $200 – $450

NOTE: part of driving under this license is agreeing that you will only (and can only) drive cars that are registered as “business”.  Therefore, you will need to change the registration of your car from Private to Business.  So what does this cost?

This could add anywhere from $200 to $450 as the fee is dependent on size of your car.

There is some confusion as to whether this then permits you to tick off on the “Rideshare” policy regarding NRMA insurance, or whether it should be ticked “Business”.  I am not sure if NRMA or the like are fully aware of the nuances with registering therefore best you ring them and check.

So after spending an additional $400 plus you can get your driver authority card that will technically allow you to do ride share in NSW.  There has been minimal policing of the driver authority card but I would expect this to ramp up considerably.  Note, large fines apply if you are driving without this license.  Although there is no requirement to display it on the windscreen like taxi drivers, you should have it with you when driving in case asked by the police or RMS officer.

SO IS THAT IT????

No wait there’s more!

As the ATO classify Uber drivers in the same category as Taxi Drivers (Click here), all Uber drivers have a requirement to register of GST regardless of their level of turnover.   Normally you would only be required to register if you generated more than $75k of annual income,

So why do taxi drivers need to register regardless of turnover?  Probably because there is a lot of ‘cash’ and the ATO know this and rather than fight the movement of cash and determination of exceeding the threshold, they simply require them to be registered from day one.  However, with Uber it is a cashless transaction and every single payment is monitored and recorded.  Therefore the ATO can rest assured that the drivers are reporting correctly.

Uber has taken the ATO (Government) to the Federal Court to appeal its decision, however, currently the law states you MUST be registered for GST.  What does this mean?

a) Submitting a quarterly BAS reporting sales.  Note, 1/11th of your sale will go to the ATO for GST.  So, not only are you paying 20% to Uber, but 1/11th of your gross is going to the taxman.

You are also entitled to get a credit for GST paid on your inputs such as expenses.  Note, there are questions when applying for insurance that request details whether you are claiming GST on the policy.

It is important that you keep a log book for 12 weeks to support your motor vehicle expense claims.

Finally is that it?

No, there is more!  Once you finally get to the end of the tax year you can then tally up all your income and deduct your expenses, whatever else is leftover will be taxed by the Taxman.  This should be disclosed in your personal income tax return.

Note, Uber and rides hare in general is an easy audit area for the ATO as all income is reported electronically. It isn’t too hard for the ATO to  request Uber to send them a file of all Uber drivers.  The ATO can data match this with business activity statements (or non-lodgement of such) and business schedules in the personal tax return.  The ATO would then simply issue a system generated “Please explain letter” and include the income in your return (plus penalties).

How can we help?

If you need assistance with registering for GST, reporting your income and determining your tax deductions, please contact us on 8264-0755.

 

NOTE: the above information is general in nature and should not be considered tax or any other advice.  The law regularly changes therefore the above may be out of date at the time of writing.  If you require advice please contact the writer.  We recommend you contact, UBER, your insurance company or RMS if you have specific questions.