Ridesharing companies, such as Uber and Lyft, have grown exponentially in the past few years. According to these corporations, their drivers can make a lot of money quickly. However, what they don’t mention are the hidden costs that pile up when you drive for these services.
Most people end up becoming a rideshare driver because they think it is an easy way to make money and have the power of being their own boss. The monotony of the 9-to-5 office grind disappears behind the luxury of being in charge of yourself and your own hours. However, you should be aware of some hidden costs of the job if you’re considering becoming a rideshare driver:
Paying for a New Vehicle
When you become a rideshare driver, you may need to buy a new vehicle depending on how your car meets the requirements set by the ridesharing company.
These requirements can vary depending on the type of vehicle you drive, the condition of your car, the number of passengers it can carry, and the age of your vehicle. Without meeting these requirements, you may not be able to become a driver without purchasing a new car.
The Cost of Gas
You’ll need to think about the cost of gas when you’re driving for a rideshare service. Paying for gas can take a considerable chunk out of your driver salary. Although most of the time you’ll be paying for gas out of pocket some rideshare companies may offer a debit card for fuel or a fuel rewards program to help bring down gas costs for their drivers.
Your taxes are going to get complicated if you become a rideshare driver because you will be treated as an independent contractor by the rideshare companies. This means you’ll need to file taxes as your own boss and deal with any local and federal taxes that are applied to you. As a rideshare driver, you’ll also need to report self-employment income if the company doesn’t recognize you as an employee.
Car Repairs and Maintenance
Finally, you can’t forget about the cost of car maintenance and repair that will increase as you continue to put more miles on your car. Rideshare companies typically require drivers to get regular vehicle inspections. The fees of those inspections are typically not covered by the company, making it another fee that is coming out of your paycheck.