(Some of the figures below have been updated here : • How much did I earn as... )
I made $3,360 a month
15 hours a day
7 days a week
Well this is the net profit, which is to say, I have deducted the variable cost and fixed cost
Hey, wait! What if I don't work that long hours? How much would I earn?
Let me show you how I worked out my averages with this simple rule of thumb:
In normal days (I mean, before the Covid 19), I can apply the following rules :
on the earning side :
I get 2 trips per hour
I get $12 fare per trip
which is to say, that I get $24 fare per hour
on the cost side :
on top of what you get, there is 20% commission fee
20% petrol or electric charging cost + maintenance cost
10% medisave
so the total variable cost = 20% + 20% + 10% = 50%
I'm not gonna talk about parking fee which is roughly about 200-300 per month which would easily be covered with perks and incentive if there are any. So I am not going to talk about the incentive system either.
in another word, I made $12 contribution margin every hour
this is of course before my fixed cost (for instance, car rental)
for example, if my car rental is $60 per day, I would have to work 5 hours a day or 35 hours a week in order to break even (0 profit).
Well, you might have a slightly different statistics, but this is mine before the Covid period and I believe it applies well in the long run for most drivers
with these, let's see what profit I could earn with different work schedules :
Schedule I (if I work 7 days a week)
and if I choose to work 12 hours a day, the first 5 hours would be to break even, so I am only left with 7 hours to earn my contribution margin, which would be 7 hr x $12 = $84 everyday, and $84 x 7 days x 4 weeks = $2,352 / month
now if I choose to work 15 hours a day, then I am left with 10 hours to earn my contribution margin, which would be 10 hr x $12 = $120 everyday, and $120 x 7 days x 4 weeks = $3,360 / month
Schedule II (if I plan for 1 rest day a week)
The 35 hours benchmark per week to reach the break-even point will now have to be completed in 6 days. and if I choose to work 12 hours per day, the first 6 hours of the day would be to break even, and I am only left with 6 hours to earn my contribution margin, which would be 6 hr x $12 = $72 everyday, and $72 x 6 days x 4 weeks = $1,728 / month
now if I choose to work 15 hours per day, then I am left with 9 hours to earn my contribution margin, which would be 9 hr x $12 = $108 everyday, and $108 x 6 days x 4 weeks = $2,592 / month
Schedule III (if I plan for 2 rest days a week)
Now the 35 hours benchmark per week to reach the break-even point will have to be completed in 5 days. So the first 7 hours of a day would be to break even, and if I choose to work 12 hours per day, I am only left with 5 hours to earn my contribution margin, which would be 5 hr x $12 = $60 everyday, and $60 x 5 days x 4 weeks = $1,200 / month
now if I choose to work 15 hours per day, then I am left with 8 hours to earn my contribution margin, which would be 8 hr x $12 = $96 everyday, and $96 x 5 days x 4 weeks = $1,920 / month
Now that you have learnt how much profit one can make, let's see what other important highlights you should also consider before even thinking about becoming a private hire driver :
1. unlike a 'normal' job, there is no "employer CPF contribution" (for details, please read the description below)
So a driver has to set aside 20% of the earnings n lose 20% from the employer's contributions. That is no small figure. The temptation not to put money into your cpf is difficult to resist for many drivers bcoz they dont want to 'lose' their hard-earned money to the government and this will be a problem for drivers (esp young ones) in future.
2. Being a driver immediately means losing the 13th month bonus and in fact many companies pay more than just 13th months.
3. A driver immediately loses his/her annual/medical leaves...
i.e 14+30days.
4. A driver also gives up all existing PHs (11days) in Singapore.
5. A drivers job is very risky. People always forget about this cost. Any accidents or even a small scratch will cost at least several hundreds to thousands of dollars.
6. Also, it is very common to be summoned for traffic offences including speeding/parking/illegal stopping...
That's all I have to share today.
If you like my channel, click the "SUBSCRIBE" button below and open up the "little bell" icon beside it.
Thank you for watching!
#goodmanstudio