If you often chat to Uber drivers around Johannesburg and Cape Town, you may have learnt that many of these drivers do not own the vehicle they are using. It is becoming increasingly common for Uber drivers to rent vehicles to use on the platform.
These drivers pay a fee to the car owner and keep the remainder of the profits they make.
This can be beneficial for drivers who do not own a car that qualifies as an Uber vehicle, but it is also a great way for vehicle owners to make money. MyBroadband spoke to ABT Logistics Operations Manager Michelle Bell about the company’s offering for Uber car owners.
ABT Logistics is a fleet management platform based in Cape Town which offers a variety of management services for Uber-entrepreneurs.
How it works
ABT Logistics offers a bespoke, holistic platform for vehicle owners whose cars qualify for use on the Uber platform.
Owners pay a weekly fee of R499 including VAT per vehicle, and in return, ABT Logistics manages their drivers, vehicles, traffic infringements, maintenance, recruitment, and earnings.
There is little work required by the vehicle owner, leaving them free to earn a passive income as they continue with their full-time job.
This business model has become so widely-adopted that Bell estimates that approximately 70% of Uber drivers on Cape Town’s roads are driving cars which they are renting from vehicle owners.
Johannesburg is a similar environment for Uber drivers, meaning it could have a similar ratio.
Bell also noted that some of ABT’s clients live in Johannesburg but send their vehicles down to Cape Town to earn income from drivers on the coast.
“Most of our clients have three or more vehicles registered on the Uber platform and earning income,” Bell said.
This helps to mitigate risk and protect against things like shortfalls in driver payments or traffic violations.
“This business is high-risk, but potentially very lucrative,” Bell said.
When it comes to earnings for vehicle owners, she said that drivers are required to pay a target earnings amount to car owners.
“These days it works as a target,” Bell said. “Owner income averages at around R2,500 per week for an UberX, and around R2,700 per week for an UberXL.”
“This business model is becoming a major trend in Cape Town as a way to augment your salary with additional passive income.”
These earnings sum up to around R10,000 per month for every UberX owned and operated by a driver, although owners would still need to pay the monthly fee of R2,000 for the management of this vehicle to ABT Logistics.
As most of ABT Logistics’ customers have at least three Uber vehicles being managed on the platform, it is safe to assume these clients are earning around R24,000 per month from renting their vehicle out to Uber drivers.
This business model is still risky, as drivers may be prone to non-payment and the risk of a vehicle accident is relatively high, but paying a monthly fee for a fleet management service dramatically reduces risk, Bell said.
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