Is it convenient to work at Uber or Didi? This is the profit balance

The collection of taxes and commissions, plus additional expenses to ensure their safety mean that a driving partner ends up earning an estimated 35 pesos per hour.

On the other hand, the tax reform that, from June 1, 2020, began to apply the digital tax to foreign companies that provide services in Mexico, affected users of applications such as Netflix, Airbnb, Uber and Didi, in which the payment of 16% tax was imposed on them, which has reduced the profits of the driving partners.

In addition to these factors, the context of violence and insecurity that drivers face, which forces them to take extra security measures and even pay additionally to have it, is another expense that is reflected in the total earnings they can have.

Net earnings

According to the official Uber website, drivers can earn up to 6,999 pesos for 50 hours of work per week, about 7 hours a day if they work tirelessly. While Didi promises that if you complete 80 trips in seven days, they guarantee you 6,000 pesos. However, although both mention that the figures may vary and were calculated under certain conditions, the balance is far from the real gain of some drivers.

Sandra is an Uber driver who does not own the vehicle; I rent it. His weekly net profit for working six days, for 12 hours, is 2,500 pesos. That is, he earns approximately 35 pesos an hour. This is because, from your total income, you have to subtract the rent of the vehicle, gasoline, cleaning and car insurance. On the other hand, the earnings of Victor, who does own his vehicle and works for both Uber and Didi, range between 3,500 and 4,000 pesos for the same period of work.

Jose B, UberXL driver, mentions that when he started working for Uber seven years ago he earned up to 5,000 free pesos a week working only four days a week, an average of eight to 10 hours. Now, for the same period of time, he earns between 2,000 and 2,500 pesos a week.

Much of the driver's dissatisfaction is the commissions and taxes that the applications withhold. According to the drivers interviewed, Uber charges a 25% commission for using the app. However, although the platform does not mention the exact amount of the commission, it does apply a charge for the "service fee" that can be variable and can amount to up to 25% of the total. On the other hand, Didi's commissions range between 15% and 30%, depending on the trip, since the greater the distance, the lower the commission.

In Expansion we had access to the breakdown of expenses of Uber and Didi drivers and, in addition to the commission, they added:

1. Service Fee Taxes: According to Uber, the service fee tax is an amount ranging from 0.16% to 6.8% of the total fare for each ride. "The service rate allows Uber to continue innovating the platform and make it an increasingly safe, efficient, accessible, sustainable mobility option and improve the experience of users and driving partners," said Maria Fernanda Resendiz, Uber communication manager. . On the other hand, according to Didi, they also charge this tax for a fixed percentage of 16% that the company receives for allowing the use of its platform, not of the total trip, although it may vary by location.
2. Rate tax: According to the receipt provided, whose amount is 117.91 pesos, this tax corresponds to 1.6% of the rate. When asking Uber about this charge, Resendiz mentioned: “As a consequence of the Tax Reform presented by the Federal Executive, which came into force in June 2020, Uber, in accordance with the law, must charge Value Added Tax (VAT) on the service rate applied to each trip made. This tax is what is known as a “service fee tax”. However, not all receipts have it, so it is not yet clear when this additional tax is charged. On the other hand, Didi does not mention this tax on its platforms and this percentage is not reflected on its receipts either.

3. Value Added Tax (VAT): Corresponds to 8% if the RFC is updated. In case it is not, 16% is withheld.
4. Income tax (ISR): From 2021, it corresponds to 2.1% on both platforms regardless of how much the trip was earned as long as the RFC is updated. Otherwise, it corresponds to 20%.

Security costs

Sandra is a mother of four children, an Uber driver and a block leader in the northern part of the city; that is, it has a group of 10 drivers monitored. She said that, after the crisis of insecurity in the country, Uber drivers, Didi and regular taxi drivers join groups of blocks to monitor and take care of any attack or accident.

According to the National Survey of Victimization and Perception of Public Security 2021 (ENVIPE) of the Inegi, men are more likely than women to be victims of crimes -with the exception of sexual crimes- The fourth with the highest reports corresponds to robbery total or partial vehicle.

Numerous driving partners begin to join driver groups to pay an additional fee, independent of the platforms, and to be monitored during their trips. “The monitoring service is paid per unit, if we are many units the service is cheap. In the case of my group, which is only 10 people, we pay 150 pesos per week”, says Sandra.

This implies that, through the Zello application, which works as a radio, two people are constantly monitoring the driving partners. In the event of any incident, an alarm is issued and it is the same driving partners of the block who assist the driver. Sandra mentions that this can scare users, since they speak in code and constantly mention their location. However, it is a safety protocol for drivers.

For this reason, the Oxfam report mentions that this lack of protection makes it consider unfair that drivers are charged taxes (ISR) without being offered social security benefits in return.