If you own a car and like to drive, ride sharing services like Uber or Black City Cars can provide a win-win setup. Whether you plan to drive across Switzerland or simply have a Saturday evening to kill, you can earn extra money or cut the cost of your trip by letting strangers ride with you.
But it isn’t as simple as the apps would lead you to believe, and before you launch your parallel career as an Uber driver, you will want to make sure you consider these factors:
1. Swiss law
Uber may operate across borders, but if you operate in Switzerland, you have to stick to Swiss laws. The exact laws and regulations governing ride sharing vary between cantons and municipalities. Many cantons require you to hold a 121 (passenger service) driver’s license or a taxi license if you chauffeur passengers for a profit (as an Uber Pop driver, for example) more than once every 15 days. UberX and Uberblack chauffeurs are required to have a taxi license in any case.
Some municipalities have banned driving for Uber Pop altogether. It is crucial that you look into local regulations in the locations which you expect to drive in because you will be the one to pay the fines. It is also worth noting that laws regulating ride sharing are currently being upgraded, so keeping tabs on the latest developments can help you steer clear of the wrong side of the law.
2. Social security
Unlike conventional taxi operatives, ride sharing services do not take you on as an employee. That means it is up to you to make sure that your social security status and contributions are up to scratch. Uber Pop drivers cannot (as yet) claim employer-sponsored social security. If you plan to make ride sharing a career, you will have to register yourself as self-employed at your cantonal social security office and pay the full compulsory social security contributions on the money you earn.
Even if you hold a day job and freelance for a ride sharing portal on the side, you will have to register your part-time self-employment if the income it generates surpasses 2300 Swiss francs per year. If you do not register for social security, you may be liable to pay penalties.
If you get jobs through ride sharing portals, there is a good chance that you will at some point chauffeur foreigners in your car. People residing in Switzerland will normally be covered by compulsory Swiss accident insurance, but if you expect to drive tourists or other non-residents, then getting passenger insurance can help fill the insurance gap.
Both personal legal expenses insurance and car legal insurance are recommended because by taking strangers into your car, you make yourself vulnerable to all kinds of law suits. But these insurances cost you money.
Money which you earn through ride sharing must be declared in your taxable income. But in addition to income taxes, it is in your best interest to find out whether the ride sharing service you work with levies value added tax (VAT) or whether you need to pay this yourself. Uber, for example, currently leaves responsibility for VAT on the shoulders of drivers. If your ride sharing business generates 100,000 Swiss francs or more per year, you have to register for VAT and pay this tax from your Uber income.
If you drive your car commercially (as an Uber driver, for example), your car radio or internet-capable devices may fall under the commercial radio category. In this case the Serafe payments which you pay for your household will no longer cover your car radio, and you will be liable to pay for a commercial radio license.
6. Work hours
Swiss law limits the amount of work hours for commercial drivers to 53 hours per week, and no more than 13 hours in a 24-hour day. Additionally, you are legally required to take a break after driving for a maximum of 4½ hours. These breaks can range from 20 to 60 minutes per work day, and you will not be allowed to drive during that time. Unless you already hold a day-job as a driver, make long drives, or operate as ride sharing taxi full time, you shouldn’t have too much difficulty here.
Ride sharing apps provide a service not unlike those previously provided by phone books or concierge services, in that they connect passengers with drivers. The main difference lies in the commissions they charge. For example, Uber takes a cut of 25% on all your earnings and Black City Cars takes a cut of between 10% and 20% depending on the ratings you receive from passengers. Other ride sharing portals charge similar commissions.
Ride sharing provides an avenue by which you can cover the costs of trips or even earn extra income. However, it is up to you to decide whether the profit you earn is still attractive after deducting commissions, fuel and maintenance costs, taxes, social security contributions, insurance premiums and other ride sharing expenses.
If your primary interest in ride sharing is to save part of the cost of intercity drives which you already make or to pool rides for the benefit of the environment, then car pooling provides a much more flexible way for you to do that. The Internet and mobile devices have made car pooling easier than ever, and car pooling services do not charge any commission for connecting you with passengers who are willing to pay part of the cost of a trip in exchange for a ride.
If you want to earn extra income towards covering the cost of owning or leasing a car, then car sharing – or renting out your car to other drivers when you are not using it – offers a much more passive way to accomplish that. You can learn more about ride sharing, car pooling and car sharing in the moneyland.ch guide to transportation in Switzerland.
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