It’s funny how Singapore’s public transport system is touted world-class yet many commuters complain about it like it’s lower class. Not only do they have to gamble on their punctuality for work because the MRT broke down (again), there is also the question of whether they can make it out of the peak hour stampede alive. Twice in a day.
That’s enough to spur some folks to look to alternate modes of transport, like becoming a full time taxi patron. Or, as a recent Straits Times report suggested, investing in a second-hand car to become an Uber driver. To cover more bases for comparison, we are introducing option C to the mix: renting a car from an Uber partner and driving on a part-time basis.
Which is the cheapest option for the average public-transport-hating Singaporean on the street? Are taxis still relevant? Can you really drive for free in Singapore if you Uber hard enough? Let’s get the lowdown over a one-month period and find out.
For the sake of illustration, let’s assume that Mr Bear is one such Singaporean. He holds down a regular 9-to-6 office job at Raffles Place and resides in an HDB flat at Toa Payoh Central. As a somewhat claustrophobic dude, he’s had quite enough of the morning and evening squeeze. He needs his space. So he contemplates ditching his ez-link card in favour of taxi meters.
A fare estimate for one trip from his home to office during peak hour is S$16.20, which means S$32.40 in a day. In a month, total taxi expenditure would total up to S$648. Although he doesn’t have to worry about things like parking, human jams (he’ll have to contend with traffic ones) and texting while driving, he’ll have to sacrifice a six-fold increase in transportation expenses assuming an average monthly ez-link top up of S$100. Is it worth it? Or should he save that money for a rental car and turn it into a money-making machine?
End result: Loss of S$648
Part-time Uber Driver
After one particular cab ride, Mr Bear hears a rumour that it is possible for one to drive for free in Singapore. Therefore, he starts exploring the idea of renting a humble four-seater to ply the roads as an Uber driver. Because he doesn’t have spare time and energy on weekdays, he will have to make do with the weekends to recoup the cost of the rental.
He chooses a Mazda 3, which sets him back about S$52 a day, or about S$1,560 a month. That’s not all; he still has to factor in petrol and parking (both HDB and office) at about S$220 and S$385 respectively. That works out to a total monthly maintenance of S$2165.
On weekends, Mr Bear reasoned that to fully exploit Uber’s incentive system and the flexible hours, he would dedicate all his time and energy between 10am and 6pm in which the hourly guarantee promotion incentive is at its highest. As long as he maintains the requirement of 1.65 trips per hour, he stands to bankroll up to S$30 per hour on top of his fare earnings (20% goes to Uber). After crunching the numbers (1.65 trips per hour for eight hours, average fare S$12), Mr Bear can expect to earn up to S$724 in one fruitful weekend. In a month, he could be about S$S$2898 richer and pocket a profit of S$733 after deducting the operational expenses.
The bottom line? It seems it’s very possible to drive for free even as a part-time Uber driver, albeit at the expense of your social life. That’s not to say you should get your hopes up if you want to earn a quick buck outside of your day job. Note that it’s also likely you won’t be getting any booking within an hour, let alone completing a single trip. Yes, there goes your cash incentive that supplements your fares.
End result: Profits of over S$700, but loss of social life
Second-hand Car Owner
Lured by the appeal of milking money from what’s widely considered a depreciating asset, Mr Bear wants more. He has an epiphany: What if he plonks down a sum of money to purchase a second-hand car and possibly, in the future, make a career switch from a soul-sucking office job to a full-time Uber driver? He can finally be his own boss! Besides, there is so much more wow factor when he tells his lady friends that he drives his own car rather than a rental. If he can already make S$700 just by driving part-time, can his full-time earnings cover the full cost of the car fast enough?
According to a listing on sgCarMart, a used 1.6-litre Mazda 3 registered in 2010 would set Mr Bear back by S$53,800. And according to the revisions to car loan legislations, he can borrow up to 70% of the car’s value, which means he will have to cough up a S$16,140 down payment. With about 48 months left on the car before the scrap, he pays about S$785 per month, 50% cheaper than when he rented it.
But Mr Bear really shouldn’t be celebrating yet, for that is merely the monthly loan repayment. There is the mandatory insurance of S$250/month if he goes for comprehensive coverage. There is the annual road tax of S$742. There are petrol and parking. And let’s not forget the down payment of S$16,140 he has to settle in cash. To break even and recoup his losses within the four-year period, Mr Bear has to work the roads long enough to earn at least S$2,037.25 each month. Given his part-time revenue of S$2898 from earlier, he can enjoy higher profits at up to S$860.75. But why stop there?
As it turns out, Mr Bear relishes the idea of having his social life back. He finally gathers himself and hands in the resignation letter, and heads straight behind the wheel of his Mazda to get cracking as a full-timer. He works really hard on weekdays and rests on weekends; between 7 to 10am and 5 to 8pm from Mondays to Fridays, he goes on a rampage to take advantage of the peak hour incentives. He takes it easy on the off peak and spends the time on power naps and kopi breaks. That puts his daily average income at S$S$281, and his weekly average at S$1405. That’s a whopping monthly take home of S$3583*, enough to pay off the outstanding loan way before the end of the COE tenure. If he wants even more, he can always continue driving over weekends.
Although there are many assumptions put in place to assess the cost and benefits of becoming either a part-time or full-time Uber driver, it’s clear to Mr Bear that he made the right choice: buying a second-hand car to become part of the private car hire trade can be an investment that pays handsomely.