Taxi app Uber has won a huge following thanks to its very simple concept of allowing people to turn their cars into taxis and compete for fares. But if you fancy joining the ranks of Uber drivers, there are a few important things you need to know.

How Uber works

Uber is a mobile phone app which allows you to book a driver to take you somewhere. For example, you might choose to use Uber if you need a lift across town to a meeting or to get home after a night at the pub, but you don't want to use a traditional taxi.

Part of the reason it has become so popular is that it generally works out much cheaper than going with a black cab or private car firm. It's also incredibly convenient.

It's now available in a host of cities in the UK, including London, Leeds, Leicester, Portsmouth, Nottingham, Sheffield and Newcastle.

Becoming a driver

If you want to become an Uber driver a set of wheels is essential obviously, but if you’ve got an old banger, forget it.

Cars must be under five years old. Details of suitable models can be found on Uber’s website, but you’re usually looking at a saloon or MPV vehicle to comfortably seat between four and eight people or a Mercedes ‘E-class’ or equivalent for four passengers.

What licence do I need to be an Uber driver?

You’ll also need a Private Hire Vehicle licence (PHV). You can apply for this through your local council.

Costs may vary according to where you live.

Stephen Rowland from Newcastle joined Uber in November. He was looking for work with flexible working hours after leaving his job as a college lecturer when his mother become ill.

He had to shell out for his private hire licence, which included a Disclosure and Barring Service check (previously a Criminal Records Bureau check), and interview, and had to pay £95 for a medical. He said the whole process took six weeks.

When you apply for your licence, your council needs to be convinced that your car is roadworthy. He explained: “The initial test cost £240 with repeat ‘MOT’-style tests every six months which cost £80 a time.” 

Deborah Tucker from London paid a one-off fee of £450 for her private hire licence after going through a company that promised to ‘fast track’ her application, but the process ended up taking months. She says now that it’s a job she could have done herself, and for less money.

Insurance costs

Cover for ‘business use’ can be costly compared with your typical ‘social, domestic and commuting’ insurance cover.

Stephen was paying £180 a year for car insurance for his Mercedes ‘E class’ but even after shopping around it jumped to a whopping £2,700 a year. However this does include public liability, which is essential if you’re carrying fare paying passengers.

And even if you’ve got years of driving experience this won’t necessarily bring the price down. “You can’t transfer your ‘no claims’ bonus across for business use, so it was a case of starting again”, Stephen Rowland says.

Deborah was quoted £5,000 to cover her BMW Series 3, but eventually found cover for £1,800. Nonetheless this was a steep price hike compared with her usual £180 yearly car insurance costs.

Uber training

Applying to drive for Uber is as simple as filling in a form on the website or via Facebook. Both Stephen and Deborah were quickly given a two hour training course before being let out on the roads.

“It was more about practical things like if someone’s fallen asleep, or you’ve got to move a passenger”, explained Deborah Tucker. Within minutes of finishing the course, both claim to have had customers waiting.

How much can you make?

Uber claims that on average drivers make around £15 an hour, and that’s after it takes its 20% ‘service fee’ (though new drivers have to pay 25%).

For Stephen, driving for Uber provides him with a full time wage. He said: “I take home around £700 for a 35 hour working week; sometimes I’ll do more but I never go over 45 hours and I don’t always work weekends”.

While there have been complaints from drivers on chat forums about the time spent waiting for fares, Stephen claims he’s never waited more than ten minutes. 

Deborah Tucker joined Uber as she wanted flexible work after leaving the fire service.

She said: “I like the fact there’s no minimum hours; you only have to make one trip a month to keep on the books and I do anything from an hour a week up to 60 hours, which brought in £1,100 after Uber’s cut”.

Petrol costs also need to be factored in; Tucker says she spends around 20% of her earnings on petrol.

[Related story: Insurers reveal the UK's worst drivers]

Uber charges   

Uber dishes out wages, minus its cut, on a weekly basis. The money goes directly into your bank account along with an invoice detailing all the trips.

You can also opt to pay a £5 weekly charge for a company phone with built in sat nav. There's nothing to stop you using your own phone and downloading the GPS app, but this isn’t always straightforward.

“I did this initially, but found the app kept dropping out, and I was liable for data charges so I switched to the £5 deal”, says Stephen. This includes the phone, data costs and any repairs. 

Going self employed

All Uber’s ‘partners’ (as it prefers to call them, rather than drivers) are self-employed, so it’s down to you to set aside money for your annual tax bill, pay it on time and fill in the relevant paperwork.

If you’ve never worked for yourself before, this can cause a financial headache.

“It did seem daunting at first and I considered using an accountant, but that would have cost money so I eventually managed to do it myself”, says Stephen, who recommends keeping a separate bank account for Uber earnings.

“I do this and then pay myself a weekly 'wage’ so I’ve always got some left for my tax bill.”

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