10 Things Every Rideshare Driver Should Know in 2019
Last month, we sat down with rideshare expert Harry Campbell of The Rideshare Guy Blog and Podcast. He shared the most important things drivers should know to earn more money this year. Watch the full chat here, or keep reading for a summary.
#1: Some passenger goodies are a better investment than others.
While some resources may suggest offering water bottles, snacks, and mints for your passengers, Harry advises that these goodies don’t provide the best return on investment. While he always keeps a few water bottles hidden away in case a passenger asks for one, he suggests investing in items like charging cords and aux cables. These are perks that passengers request and that can be used for multiple trips, so they provide ongoing value.
#2: You should know these common rideshare deductions (and be tracking them).
A deduction (or a “write-off”) is an expense that gives you a tax break. This means that you can deduct the expense of the item from your taxable income, which reduces the amount you owe the IRS at tax time. To qualify as a deduction, the expense needs to be:
Ordinary, meaning it’s common for your industry, AND
Necessary to do your job well
This applies to almost anything you purchase for your rideshare business. Not sure where to get started? Here are some common rideshare deductions:
Mileage: This is the number one expense you should be tracking as a driver. Any mileage you drive for work is deductible, so make sure you have a tracking app like Stride Tax. You can opt for the standard mileage deduction, which is a fixed rate ($0.58/mile in 2019), or the actual expense method.
Inside tip → If your car is less-expensive to maintain than the average vehicle, the standard mileage deduction is going to be the best bang for your buck!
A full-time driver can easily put 1,000 miles per week on their car; when you diligently track this mileage, you can potentially offset all your rideshare income and not owe any taxes.
Cell phone: You can deduct both your cell phone purchase and your monthly usage bills if you use your phone to drive. Just be sure to estimate what percentage of the phone (including calls, text, and data) you use for business.
Inside tip → The Uber app shows you your “online hours.” You can get a good estimate by comparing these online hours to your total phone usage (both iPhones and Androids show you this).
Passenger goodies, like the water bottles and charging cords we mentioned earlier.
Parking fees / Tolls: You can deduct parking fees and tolls if you are not reimbursed (e.g. by Uber) for them. You cannot deduct parking or driving tickets.
Spotify or other music apps you subscribe to for your passengers.
Software that you use for taxes. To be deductible, the software must cost more than if it were not used for business income.
Other investments that support your business, like training (e.g. The Rideshare Guy’s educational resources). Harry even deducted a percentage of his GoPro; though he occasionally uses it on vacation, it functions mostly as a dashcam during the year.
#3: You need a system for tracking expenses.
If you are consistent about tracking your expenses, you can save hundreds (or even thousands!) of dollars at tax time. That’s why it’s so important to track expenses, even if it’s just using an Excel spreadsheet or saving receipts on your phone.
Apps are typically your easiest, best method of expense tracking, and they keep your information secure in case you ever lose your phone. Our free app, Stride Tax, even recommends deductible expenses based on your job type. Get Harry’s guide to the best tracking apps for rideshare drivers here.
#4: Hit the road during commuting and party hours.
If you’re new to driving, Harry recommends that you test the waters during Friday and Saturday nights (“the party hours”). You’ll also be more likely to get trips during commuting hours when people are headed to work. As you get to know your city and local demand for trips, you can refine your strategy.
#5: Airports aren’t necessarily the best place to get passengers.
Rides to and from airports require a bit more strategy, as they’re not always the most profitable trips. If you want to work the airport scene, try capitalizing on the early morning crowd – from around 3 to 6 AM – when people need to catch early flights and there aren’t many other drivers on the road.
As for location, one of the best strategies you can employ as a driver is to be aware of big events in your area, like holidays, sports games, and conferences, and be first on the scene to pick up passengers.
#6: It’s to your advantage to be on multiple rideshare platforms.
If you’re new to rideshare driving, pick one platform (e.g. Uber or Lyft) and get the hang of it before adding another. Eventually, you’ll want to make sure you’re approved to work with both Uber and Lyft. You may, for example, have a document expire on one account, or an app may temporarily go out of service; if something goes wrong, you’ll have a backup!
#7: You should get a quote for rideshare insurance.
Even if you are only driving to make a few hundred dollars a week, you are operating a business – and that means increased responsibility and liability. Harry recommends getting at least a quote for rideshare insurance. You may find that it costs very little.
Inside tip → Rideshare insurance is deductible!
#8: GPS should be a tool, not a crutch.
When it comes to getting good reviews, safe driving and smart navigation go a long way. Get to know your city and understand general directions to key landmarks, like the beach or the airport. That way, you can start a trip safely headed the right way, even if you’re still waiting for your directions to load. You should not be 100 percent reliant on GPS.
#9: You don’t have to accept every request.
During high-demand hours, you should only accept requests for trips that are three to four minutes away. Just because it’s busy does not mean you will only get requests nearby; you don’t get paid to drive to your passengers, so minimize that time by waiting for a closer request.
On the other hand, if demand is slow, you should take whatever trips come your way. This is a great time to use an app like Mystro, which helps you drive for both Uber and Lyft at the same time.
#10: Rideshare driving is a business.
At the end of the day, no one is going to care about your income, expenses, and vehicle as much as you do. Rideshare driving has great perks, but it is still a business, and that means it demands extra work and responsibility.
Drivers are often focused on making as much money as possible, but they forget about the expenses they may owe in the future. For example, you need to be conscious of potential maintenance costs as you put considerable mileage on your vehicle, especially if you don’t have a fuel-efficient car.
Operate like a business. Take care of the small things – like tracking your expenses and getting to know your city better – and you’ll be a smarter, more effective rideshare driver.