“I signed up to be a Lyft driver in 2018,” said one driver who soon found himself driving full time. “It was all online. There was no orientation video. I didn’t even know about the existence of driver hubs. My first time out, I got a shared drive. I had no idea what was happening. I knew my passenger’s destination, but the app directed me elsewhere. Noticing my confusion, the passenger looked at my app and told me what was going on.”
Rideshare and delivery companies have gotten better at driver orientation, but you have to learn how to run your own business, because that’s what you are doing; you are a self-employed contract worker.
Fortunately, the Gridwise blog fills some of those gaps. Whether you’re a beginner just starting to drive for Uber or DoorDash, or whether you’re a pro Spark driver, we’ve got you. We’ll provide a selection of some of the best foundational advice for gig drivers. We’ll cover
- understanding the business side of gig driving
- protecting yourself legally
- taking care of yourself while you’re gig driving
- tracking rideshare and delivery mileage and earnings
Understanding the business side of gig driving
You are running your own business. Whether you drive for Lyft or Uber, or one of the other services, or if food delivery is your hustle, run it like a business.
Pay the taxman
Companies that use gig drivers generally do not withhold payroll taxes. Standard payroll deductions, federal income tax, state income tax, unemployment insurance, Medicare, and social security are now your responsibility. When you file your taxes at the end of the year, chances are you will owe. The way you avoid this is to calculate your taxes (how much you will approximately owe) and make quarterly estimated self-employment payments. Yes, this is difficult, but you need to discipline yourself. Quarterly payments are much easier than having a bill for back taxes hanging over your head with the potential of a penalty.
Talk to a bookkeeper
A bookkeeper can help you determine those quarterly payments and, at the end of the year, figure out how much you owe on taxes. With the rapid increase of gig workers in the US economy, the IRS is scrambling to figure out the details. Keeping up with the tax rules and regulations is a chore. A good bookkeeper knows all the minutiae. Look for reliable sources online (double-check information. Aside from Gridwise, the internet is not always the source of all truth 😉). Gridwise Tax Help, powered by Keeper Tax, has tons of tax resources to assist gig drivers with their bookkeeping, and can connect drivers to tax professionals for help.
Keep receipts
As a rideshare or food delivery driver, you can count on early morning or late night pickups or drop-offs in communities with no streetlights. A high-powered flashlight or spotlight can help you find addresses. That purchase is tax-deductible. Do you keep an emergency box in your trunk with a first aid kit, flares or reflectors, extra emesis bags (we’ll discuss those later), and other items? Those are all deductible. Also, learn how to track mileage as a gig driver. That’s tax deductible, too.
You never know when you will need a receipt. Several years ago, a malfunctioning gate in a private community broke a driver’s windshield. The community paid for a replacement, but when the driver logged onto the rideshare app the next night, a passenger had reported it, resulting in the driver’s temporary suspension until he fixed his car. Fortunately, he had photos of the installation and the receipt. He was reinstated a few hours later.
Keep your paperwork current
As a gig driver, important pieces of paperwork include your driver’s license, insurance information, and car registration. As a security check, you may have to provide a copy of your license in the middle of a shift. Alway have it on you, and keep a photo of it on your phone just in case. Make sure payments on car insurance are made on time, and renew your car registration as soon as it comes in the mail.
Save for retirement
You are self-employed. Retirement is on you. Despite the naysayers, social security will probably be there but will likely not cover all your expenses, even as a senior citizen. Ask a financial planner for investment advice for retirement.
Protecting yourself legally
Because you are self-employed, you can be legally liable if something happens and you’re found at fault. Right or wrong, there is an entire cottage industry of attorneys geared to assisting someone in an accident with a gig driver who was on the job. There are things you can do to protect yourself.
Make sure you have the proper auto insurance for rideshare and food delivery drivers
Lyft and Uber both carry insurance policies, but these policies do not cover you during every instance. Make sure you know what your rideshare company’s insurance policy does cover (or the food delivery company, if that’s the case), and then verify what your auto insurance covers.
Many insurance companies cover rideshare, but only with a special rider on your policy. It pays to shop around and maybe change insurance companies to find affordable coverage. For more information on car insurance as a rideshare driver, check out Insurance for Independent Contractors: What to Look for and How to Get It.
Get a dash cam
Many people believe you can make a lot of money by engineering an accident with a rideshare or food delivery driver and cashing in on the lucrative insurance policies. Not true, but possibly expensive for you.
Installing a forward-facing dash cam acts as your witness in case of an accident. Consider a two-way dash cam, or a 360-degree view that also catches what’s happening inside your car. This protects you from false allegations. Be careful, though. Rideshare companies have policies about where you can and cannot post these videos.
Taking care of yourself while you are gig driving
Gig driving is stressful. You may not think so, but the stress you don’t feel is often the most damaging to your body. Consider these words from a rideshare driver on a Quora thread:
“On days with light traffic and good passengers, it’s easy. Bad traffic, belligerent drunks, and unruly passengers, it’s a nightmare.”
Here are some things you can do to relieve that stress.
Set up a schedule and take regular time off
Self-employed people are critically aware that if they don’t work, they don’t make money. It’s easy to work, work, work, and work some more. Schedule days off and stick to them. Enjoy life.
“Driving in downtown Los Angeles, I know where all the best taco trucks are,” said one rideshare driver. “I had a good week this past spring and took that Saturday night off. My wife and I cruised all those taco trucks. We had a great time!”
Don’t work yourself into the ground.
Get quality sleep
Working as a rideshare or food delivery driver keeps you on the street much longer than the average driver. Especially if you drive weekend nights, there are lots of drunk drivers and road rage incidents.
Getting enough sleep leaves you alert and ready to take evasive action if needed. Take advantage of the downtimes. Even in larger cities, weekday afternoons can be slow for an hour or two. Find shade in a nearby park and take a nap. You’ll be bright-eyed and ready for rush hour.
Don’t skip meals
Gig driving doesn’t always lend itself to pulling into a drive-through to grab a quick burger. Carry a sack lunch and eat it before taking that afternoon nap or in the time you have between rides. Going for extended periods without eating leaves you vulnerable to binging on foods that are bad for you. Low blood sugar, another hazard, can lead to mood swings or worse. Think in terms of snacks. Research some good protein bars. Veggies and fruit are good, too, and drink lots of water.
Listen to podcasts or learn a language
Some drivers listen to music when they drive. Others enjoy podcasts. If you’re a history buff or have some other interest, there is a podcast for you.
You might consider a new language. The popular phone apps, such as Babbel and Duolingo, come in 10-minute lessons. You can breeze through two or three a day during down periods. There are also numerous YouTube videos and mobile-enabled websites. The Spanish Dude is a good one, and he’s still running his coronavirus special where you can name your price for a lifetime membership. Of course, watch these only when you are parked. Choose a language common to the region you drive in and practice with your passengers. They’ll get a kick out of it.
Learn where the restrooms are
If you are doing food delivery, you can use a restaurant bathroom, but having to go to the bathroom while driving rideshare is miserable. Learn where you can rely on an available bathroom.
Fast food restaurants are always good for restrooms. If you drop off a passenger at a nice hotel, there is typically a restroom in the lobby. Park your car out of the way, leave the flashers on, and let the valet know you will be back in a few minutes. You can also check the app store on your phone for bathroom finder apps; there are several of them.
Take care of your mental health
Gig drivers taking care of their mental health? Really?
Yes, really. This is especially true when you consider that rideshare drivers are dodging other drivers, fighting traffic, dealing with dozens of riders on a shift (some of whom might not be sober), working all sorts of hours, driving in all conditions, and all the time wondering if they will make enough money to cover the rent.
If you are a food delivery driver, there is the angst of hoping that the restaurant got the delivery right and that the food was warm enough or cold enough when you delivered it, not to mention a plethora of other things that can go wrong.
And of course, grocery and package delivery drivers have to worry about speedily picking up and delivering bags and packages without crushing the items. Finding grocery substitutes on the fly is enough to raise your blood pressure when shopping for yourself, let alone dozens of customers!
Last month, there was a post on the Gridwise blog, How to Maintain Mental Health as a Rideshare or Delivery Driver. Check it out to make sure you are taking proper care of yourself.
Another thing you can do is to mix it up a little. Drive rideshare for a few nights, then switch over to food delivery. You might even want to inquire about something different, such as applying for temporary FedEx and UPS delivery driver jobs or other package delivery driver gigs in advance of the holidays.
Carry emesis (throw up) bags
Every rideshare driver’s nightmare is a drunken passenger getting sick in the back of their car. There may still be a handful of good rideshare hours left, but your night is over if your car reeks of vomit. The rideshare companies will pay you to clean the car and then charge the customer for it, but that doesn’t make up for the lost business.
One way to make this a less frequent occurrence is to carry emesis bags. These are, to put it bluntly, heavy-duty, large-capacity barf bags. Place a few in the side pockets in the back seat of your car. If you suspect a passenger might get sick, make sure they know where the emesis bags are located. You can buy them on Amazon.
Have business cards
These are not very expensive, and two reasons immediately come to mind for having them. If someone does want to tip you off the app and they don’t have cash, you can give them your card, which should include the codes for leaving money on your various cash apps. Secondly, Uber and Lyft and many food delivery apps offer bonuses if you refer someone to drive for them. When that person signs up, they need to use your incentive code, which you retrieve from the app and include on the business card. Most of the gig companies provide artwork for the cards from their website.
Tracking rideshare and delivery miles and earnings
Tracking everything with Gridwise is one of the smartest things you can do as a rideshare or delivery driver. Gridwise’s free mileage and earning tracking will keep you organized for tax season and help you maximize your tax deduction. And that’s not even mentioning Gridwise’s gas discount which gets you up to $50/month off at the pump.
With features like When to Drive, Where to Drive, Airports, and Events, gig drivers can find the best places and times to drive, and know exactly when to head to the airport or pick up passengers from events.
