Renting a car has been a popular choice for a few drivers looking to get started, and for those wanting to check whether it’s the right fit for them. It removes the initial investment and lets the practitioner take a more casual approach to their driving schedule.
There is, however, a few things that you should be conscious of before entering into a rental agreement. The weekly rental charge is a predictable cost, which is one reason the option is appealing, but it is not the only cost you should be considering.
- What other operating costs are involved?
- Can the rental car be used on each passenger-driving service you are after using?
- Are the terms of the contract suitable for the nature of your work?
- How does this option fit into your larger financial goals?
Full Cost Picture
The weekly rental payment is a fixed, predictable expense, but it is far from being the only cost associated with this kind of arrangement. You may also face other expenses, such as:
- Fuel or charging
- Booking fee, depending on platform
- Insurance excess/damage charges
- Cleaning materials
- Mobile data
- Parking charges
- Toll charges
- Airport charges
- Budget for tax
Depending on the provider, some of these costs, such as insurance, roadside assistance or servicing may be covered by the weekly rental. Other costs such as damage to tyres or the windscreen may be the responsibility of the renter.
You should also take account of any downtime if the vehicle requires repairs during the rental period. In that situation, you will not be generating any earnings, but you may still incur rental payments.
Measuring Hourly Earnings
Gross fares are not profit. When trying to judge your real earnings from passenger driving, it’s critical to keep an eye on the other expenses mentioned above. It is also important to take into account time spent on the road that does not generate income, from home to your work location, driving between drop off and pick up location, time spent waiting and any time spent on vehicle clean or other maintenance.
Over a couple of weeks, you need to keep a record of:
- total working hours (from leaving home to returning to it)
- total kilometers driven
- fuel use
- rental costs
- other associated costs
- gross income from trips
- service fees charged by the platform
You can calculate net income per working hour after you have this information. A comparison with your hourly earnings in other work or the minimum wage could be insightful.
Peak-Time Patterns
There may be more demand for drivers in certain areas or at peak times, such as Friday and Saturday nights. You could also separate these trips from your weekday, off-peak trips to get a sense of what kind of income they generate per hour. This can help you to plan your driving schedule in line with your other commitments.
Contract Checks
You should carefully review the rental car contract and check the requirements for working with each passenger-driving platform. If you’re considering this option, the MCSyo team can provide more information about rideshare car rental in Piara Waters. There are also several red flags to watch out for:
- Some contracts can have a maximum kilometer limit or charges for excess kilometers. Excessive kilometers are an intrinsic part of passenger driving, and you will want to look for a more flexible option.
- Vehicle age, condition and inspection requirements, as well as insurance and document standards may vary between platforms. You can ask the rental car provider about these requirements, but you should do your research so that you know the criteria for each of the apps you want to work with.
- You should also make sure that you understand what charges or deductions will occur when you return the car. Depending on the contract, you should be aware of how far in advance you need to give notice to return the car or end a contract, how the provider will assess if you are liable for any damage, and if you will receive back any deposits, as well as whether there are additional charges for excess use or an unclean vehicle.
Weekly Reality Check
A rental car could be a good option to test out if app-based passenger driving is the right work fit for you, and if there is a viable market where you live. There is an energy drain and a time investment that comes with this work, as with any kind of work.
Weekly reviews can give you an overall sense of your gross and net earnings – Investopedia explains the why of it at investopedia.com/ask, how you are allocating your time and how this option can fit into your larger financial picture. It’s important to be honest with yourself about whether you are making an adequate income per hour, taking account of all your working hours and expenses, and setting aside money for tax. You could find that working a rental car has given you some insight into whether you will like financing a car purchase down the track, to have more flexible control over the vehicle you are driving.
