Chances are that you have used Uber or another similar company in your life. You might even have thought about using your vehicle to drive for a ride-sharing company. Whatever the case, ride-sharing is not new to you.
Different companies are offering ride-sharing services. They provide car owners with a way for them to earn extra income using their cars. Customers can also order rides, no matter where they are, and get a driver close to them.
However, if you want to use your vehicle to drive for a ride-sharing service such as Uber, you need to understand what you are getting into. Here are the pros and cons you need to know before getting started. They apply to all ride-sharing companies.
Pros
Taxes
Ride-sharing service providers such as Uber classify drivers as independent contractors. They are not employees. This means that as a driver, you will not be eligible for any benefits or overtime pay. You will be responsible for planning your taxes.
That notwithstanding, you are allowed to deduct any expenses that you incur when running your business as a ride-sharing company driver. This might include deducting your standard mileage for every mile you cover when working.
However, you will still need to pay taxes. It is always good to ensure that you have saved a quarter of your income. This is money that you can use to pay taxes. The good news is that you will find yourself paying less than this, especially after deductions.
Flexibility
One of the biggest advantages of using your vehicle to drive for a ride-sharing service is the flexibility you get when working. This is because you can work any time that you want and for as long or as short as you want.
You do not have to schedule yourself to work at certain times or follow any strict deadlines. You get to work whenever you want. You can also work as a part-time driver, even though this might leave you with limited income.
However, once you learn the platform you are using, you can find new ways of improving your profile rating and maximizing your income potential. You can earn better than a person working in an office or at a full-time job.
Cons
Wear and Tear
Cars, just like any other machine, can depreciate very fast. One of the main reasons for this is daily usage. The more miles you cover with your car, the higher the chances of it depreciating fast in value.
As you continue using your vehicle to drive for ride-sharing service providers, your vehicle’s value depreciates, and the number of repairs you have to do increases. You will also have to deal with wear and tear coming from more people getting into your vehicle.
Things like accidental damage, spills, and stains, among others, are common with vehicles used by many people. Even though some ride-sharing companies might help you with some of these issues, most of the expenses are yours.
You’ll Almost Certainly Need to Pay More for Specialist Car Insurance
When using your vehicle to drive for a ride-sharing service provider, it is important to note that your personal vehicle insurance coverage will not work. In addition, you will almost certainly need to pay more for specialist car insurance.
This might be different depending on the state you are operating from. For instance, if you are working in the state of New Jersey, ensure that you have looked at deals on car insurance in the state of New Jersey.
This is because different insurance companies have different deals to cover ride-sharing service provider drivers. However, some companies such as Uber provide insurance coverage for vehicles. However, this covers a vehicle only during a trip.
Your Personal Safety
Most people do not entertain the idea of giving rides to strangers in their cars. However, as a ride-sharing service provider driver, you do not have any option but to drive customers you do not know.
Some companies allow both drivers and riders to leave feedback after the completion of a trip. However, this is not enough to ensure that you are safe from malicious people. There have been reports in the past of people attacking drivers or making advances on them.
This means that your personal safety will be compromised when working as a driver for these companies. However, cases of attacks are not very many.
Using your vehicle to drive for a ride-sharing service like Uber is one of the best ways for those who want extra income. However, understanding the pros and cons is important before you get started.
