For an unemployed person having no deposit and back ground checks makes it easy with the only downside this type of financing is very expensive. For UBER and the other ride apps this is a perfect offering knowing most people seeking self employment have no funds.
Last week I booked an Uber for the very first time and the service was decent which is what you would expect. For the return trip we used another taxi and not sure who they are affiliated with as they were at hand and convenient when we were looking for transport.
There was a big difference between the services as the latter transport got us home but the driving ability was questionable and would never use him again. There was two sketchy moments on the short 15 minute trip and tried not to talk with the driver so he paid more attention to the road.
What both drivers had in common was that they were renting their vehicles and did not own them as yet. From what I gathered from the brief discussion was they were both renting to buy their vehicles. I do think it is interesting to see how people make a living and what areas they are being screwed over by whoever is running them.
The UBER driver mentioned that there was a new app available or coming out that offered the drivers a larger slice of the pie and believes UBER will struggle in the years ahead. I have no idea what percentage UBER takes from the drivers fare but he mentioned he is taking home around R2000 per week after expenses. This is not much and is around $120 as his take home salary but this could be much more if he owned his own car.
Both the drivers mentioned a rental fee of R2500 per week which is around $150 which includes the car and the insurance. I am not sure if that includes servicing and would presume this does. Whilst being driven to our destination I asked why he went down such a route because normal vehicle finance and insurance would cost less than 40% of what he was paying monthly.
These driving apps like UBER obviously are businesses that are designed to make money and that includes making it from their drivers. The second driver mentioned he is renting 2 vehicles and is paying R20K monthly for them which is big profit for whoever is financing these vehicles.
Google tells us there are around 40 000 UBER or self contracted drivers in SA and knowing that most who turn to this self employment will not have the finance to own a vehicle it would be correct to presume most are rental vehicles. Just on those types of figures that is a R400 million business each month and is probably more valuable and profitable than the turn over generated from the taxi rides.
This as a business model is great and I am sure evolved after the app was developed and deployed. Spin off businesses that were never expected are probably the most lucrative as you only find out afterwards mainly down to the demand. Self employing people and tying them in through a rental contract guarantees you have the drivers ,vehicles ,insurance and road worthiness through servicing all in one deal.