On 9 July 2026, the Transport Workers’ Union (TWU, Australia) emailed members celebrating what it described as a historic victory for Australia’s delivery drivers.
The union advised that the Fair Work Commission had issued a decision that could establish minimum pay and conditions for tens of thousands of delivery workers as early as 10 August, subject to the finalisation of the proceedings. The email stated that the proposed minimum engaged-time hourly rates were:
- Bicycle, e-bike and e-scooter: $31.30 per hour
- Combustion motorcycle or scooter: $31.50 per hour
- Motor vehicle up to one tonne: $32.00 per hour
The TWU also explained that these are minimum rates. Workers who earn less during their engaged time would receive a top-up from the platform, while those earning more during busy periods could continue to do so.
The union deserves recognition for securing these proposed protections after years of campaigning. Establishing any enforceable minimum standard is an important achievement. The proposed rates are not only inadequate and out of touch with economic reality, they represent a major step backwards for the industry.
However, for rideshare drivers, these proposed figures also demonstrate why the current approach falls short.
Even the highest proposed rate of $32 per hour applies only to engaged time, the period during which a worker is actively completing a trip or delivery. It does not compensate drivers for the substantial time spent logged on waiting for work, repositioning between jobs, travelling to high-demand areas, or covering the many business costs that continue regardless of whether a passenger is in the vehicle.
For rideshare drivers, operating costs such as fuel, depreciation, rideshare insurance, registration, servicing, cleaning, tyres and the risk of unexpected repairs continue throughout the entire working day, not just while transporting a passenger.
Once GST, business expenses and the absence of paid leave, employer superannuation and income protection are taken into account, a minimum of $32 per engaged hour does not provide a sustainable living income for many full-time rideshare drivers.
The TWU has demonstrated that meaningful reform is possible. The next challenge is ensuring that minimum standards reflect the true cost of operating a rideshare business. For that reason, the union should be pursuing a minimum gross earnings standard of at least $40 per hour, or an equivalent formula that fairly compensates drivers for all working time and the genuine costs of providing the service.
Why $40 Per Hour Should Be the Minimum for Every Rideshare Driver
As the Transport Workers’ Union negotiates on behalf of rideshare drivers, one fact must remain front and centre:
Gross earnings are not wages.
Every Uber driver is effectively running a small transport business. Every dollar earned from a fare must first pay for the costs of operating that business before the driver earns a single dollar in wages.
Unfortunately, discussions about driver pay often ignore these costs.
They also ignore the fact that drivers receive no paid sick leave, no annual leave, no employer superannuation, and no compensation when the car is off the road because of an accident, mechanical failure or other unexpected downtime. One crash, one insurance delay or one repair bill can wipe out days or even weeks of income. Add in the odd fine, toll charge or compliance penalty, and the real cost of doing the job becomes even clearer.
The Current Cost of Running an Uber Vehicle
A typical Melbourne rideshare driver works at least 30 hours per week and travels around 800 kilometres.
Driver Using Their Own Five-Year-Old Hybrid Camry
Typical weekly business expenses include:
- Fuel: $60–70
- Insurance: $25–35
- Registration: $15–20
- Servicing and routine maintenance: $20–30
- Tyres: $10–15
- Unexpected repairs and mechanical wear: $20–30
- Vehicle depreciation: $70–90
- Mobile phone and data: $10–15
- Cleaning supplies and car washes: $10–15
- Accounting, banking fees and miscellaneous business expenses: $5–10
- Fines, tolls and other compliance costs: $5–15
- Allowance for unexpected downtime due to an accident or breakdown: $20–40
Total weekly operating costs: approximately $270–385
Driver Renting a Hybrid Vehicle
Typical weekly costs are:
- Vehicle rental: $350
- Fuel: $60–70
- Mobile phone and data: $10–15
- Cleaning supplies: $10–15
- Miscellaneous business expenses: $5–10
- Fines, tolls and other compliance costs: $5–15
- Allowance for unexpected downtime due to an accident or breakdown: $20–40
Total weekly operating costs: approximately $460–510
Many rental agreements include only 1,000 km per week. Additional kilometres are commonly charged at 50 cents per kilometre, meaning high-kilometre drivers can easily spend another $100–200 per week.
There is another important issue that is often overlooked. A driver’s actual working time is not the same as the “engaged time” used by rideshare platforms, the Transport Workers’ Union and, under the Fair Work Commission’s proposed minimum standards framework, the time to which the minimum hourly rate applies. Drivers incur virtually all of their business costs from the moment they log on and make themselves available for work. Fuel is consumed while repositioning or travelling to areas of higher demand, the vehicle continues to depreciate, insurance, registration and finance costs accrue regardless of whether a passenger is in the car, and drivers remain responsible for cleaning, maintenance, compliance and the risk of accidents. Yet periods spent waiting for trip requests or between jobs are generally not counted as engaged time and attract no minimum hourly payment. As a result, a headline minimum rate applied only to engaged time does not represent a driver’s true earnings over the hours they are actually working and incurring the costs of operating their business.
One aspect of the proposed minimum rates is particularly difficult to justify. Under the proposal, a rideshare driver using a motor vehicle weighing up to one tonne would receive a minimum of $32.00 per engaged hour, while a bicycle, e-bike or e-scooter delivery rider would receive $31.30 per engaged hour(?) a difference of just 70 cents per hour.
That small difference bears little resemblance to the vastly different costs and responsibilities associated with operating a rideshare vehicle.
A rideshare driver must purchase or rent a vehicle that meets strict platform requirements, maintain comprehensive insurance, pay registration, servicing, tyres, repairs, cleaning costs, fuel, depreciation, mobile phone expenses, tolls, compliance costs and absorb the financial risk of accidents and mechanical failures. The driver is also responsible for keeping the vehicle in a clean, roadworthy condition suitable for carrying members of the public and complying with ongoing vehicle inspection and regulatory requirements.
By comparison, while bicycle and e-bike delivery riders certainly face their own challenges and deserve fair minimum standards, they generally do not incur the same level of capital investment, operating costs or regulatory obligations associated with providing passenger transport in a motor vehicle.
If the Fair Work Commission considers these vastly different business models to be worth only 70 cents per engaged hour apart, it raises a serious question about whether the proposed minimums genuinely reflect the real cost of providing rideshare services. The difference between the two rates is so small that it effectively places the substantial financial burden of operating a compliant passenger vehicle at almost no additional value.
For many full-time rideshare drivers, that extra 70 cents per hour would not even cover the additional depreciation, servicing or insurance costs incurred by using a compliant vehicle, let alone recognise the significantly greater financial risks of running a passenger transport business.
The $40 Per Hour Reality
Suppose a driver works 30 hours in one week and grosses $40 per hour.
Gross revenue: $1,200
If those fares are GST-inclusive:
- GST component payable to the ATO: approximately $109 (before GST credits on business expenses)
- Vehicle operating costs:
- Own vehicle: $270–385
- Rental vehicle: $460–510
That leaves approximately:
Own vehicle
- Revenue after GST: about $1,091
- Less operating costs: $270–385
- Remaining before income tax: approximately $706–821
Rental vehicle
- Revenue after GST: about $1,091
- Less operating costs: $460–510
- Remaining before income tax: approximately $581–631
These figures are before income tax and do not include unpaid annual leave, sick leave, employer superannuation, or compensation for the financial risks that every independent contractor carries on our roads for extended hours.
If superannuation were paid at the employee rate, that would add another significant cost on top of wages. Drivers do not receive that protection, even though they are expected to absorb the full cost of the vehicle, the fuel, the repairs, the downtime and the fines.
This Is Why Drivers Need a Fair Minimum
When people hear that a rideshare driver earns $40 per hour, many assume that’s the driver’s wage.
It isn’t. It’s the revenue required to operate a transport business.
After paying GST, fuel, insurance, servicing, tyres, repairs, depreciation or rental costs, phone expenses, fines and other operating costs, the driver’s actual income is substantially lower. If the driver is taken off the road by an accident, the loss is even greater because the income stops while the bills keep coming.
A fair minimum standard should recognise this reality.
For drivers working 30 hours or more each week, $40 per hour gross is not an ambitious demand. It is a reasonable minimum that recognises the real costs of providing rideshare services in Melbourne and possibly most other Australian states.
Although the proposed figure is described as a minimum earnings standard, experience in many industries shows that legal minimums often become the market norm rather than simply a safety net. If the minimum is set too low, there may be little commercial incentive for platforms to pay more, particularly where there is an adequate supply of drivers. In practice, a minimum can therefore become the effective rate paid to most drivers, not because the law prevents higher payments, but because businesses have little reason to exceed it. For that reason, any minimum standard must be set at a level that genuinely reflects the full cost of operating a rideshare business and provides drivers with a sustainable living income, rather than assuming the market will routinely deliver higher earnings.
