So this whole sharing economy/personal case study has been definitely interesting and eye opening. Much of it has been a struggle personally to earn even a minimum wage living. I’ve gone so lean some months as to struggled to make my car payments, and negatively effect my credit by about 100 points!
The mission of this blog has changed over time. As it stands, I am creating a resource site for new drivers. I offer my personal story as a cautionary tale as it is definitely tough to earn a sustainable full time living with these type of side hustle gigs without a lot of hours of dedication. Bear on mind my story may only apply to those working and living in bigger metros where a higher cost of living is the reality. In California, it gets hard for even in demand programmers to stretch their dollars!
As time goes on, I’ll be developing and promoting existing tools and looking to help drivers see what they’re truly earning and where they might be losing money.
In the end these kind of side hustle gigs in the sharing economy are great part time gigs for high school and college students, housewives, and anyone looking to make a little extra money over primary income sources. Those looking to these gigs as a full time opportunity, I’d have to caution that they aren’t the type of jobs that you should approach unless you have no other options. Many times you earn much less than minimum wage whether we’re talking about food delivery, ride sharing, and similar sharing/1099 economy businesses. In the end there are only a few days a week where you truly earn what the trouble it causes is worth. You have to put in 55+ hours weekly to earn a decent Bay Area living. And the sharing portion of the economy should refer to your sharing the expense of operating a vehicle.
All in all, I am still happy that I left my office job to pursue this. It is given me great perspective on my career and on the sharing/1099 economy. The independence has been empowering along with the opportunity to earn while looking for the right next job. It’s allowed me ample time to focus my energy on the fields I do enjoy working in.
One major complaint I have that is not being addressed by the press is the fact that the sharing economy is changing the view of service workers in the minds of consumers in a very damaging way. Often times apps downplay the practice of tipping for good service. Services like Postmates will promote during special promos that customers should tip less. Uber states that surge pricing IS tipping. This is not only detrimental for sharing economy contractors, but also those working in restaurants or other traditional service jobs. The more consumers move towards lowering and eventually eliminating tips, the less earnings for everyone in service imdustries. The job is still demanding enough to require tips and those services pay a miserly amount to its drivers. Decades ago, I earned decent tips bussing and waiting tables. With most sharing/1099 economy jobs, I’m lucky to walk with $5 in tips after 10 hours! And I know I offer excellent customer service as my 5 star ratings confirm.
On top of that, independent contractors don’t have the rights that regular W-4 employees would. If drivers don’t like the job or how they are paid or treated, the best they can do is quit. With traditional service jobs, at least restaurant workers they can strike all at once and hopefully impact their workplace. They still have the same risks of losing their job but at least their impact is felt by management immediately.
With all that said, I would offer up some major suggestions for becoming a driving for these type of gigs:
– Keep your expenses down! I can’t state how important this is. With a car payment being your most significant expense, you are always better off owning your car(provided ot is fairly new). If you are able to find a fuel efficient car that you can buy outright, do it! That or consider leasing. I’m committed to a loan and the earnings really never catch up enough without giving up a significant out of quality of life.
– Hire a knowledgeable tax professional: I use Tax Ninja in San Francisco and they really opened my eyes to more than just important deductions to take. They’ve also helped me crunch the numbers and show what I was truely making per hour. It was a gigantic surprise how much my earnings were truely and influenced my earnings strategy.
– Consider all financial and physical liabilities: If you don’t plan properly, your financial health can take a serious hit. Beyond this, consider how much toll your body physically takes driving 40 hours plus per week. it doesn’t make any sense to literally kill yourself making “lots of money” just to completely wreck your body.
– Follow your instinct, not the company or what other drivers tell you online or in person: I say this for a few reasons. If you have watched the news over the last few years you have seen how fiercely Uber has been defending that they do not employ any drivers and they should all be classified as independent contractors. Most of these businesses do not want the expense of hiring employees and it also speaks to the model.
They care about their bottom line and much less else. Because of the nature of independent contractors they can’t direct you, therefore do not show you how to maximize earnings. To make it all work you have to do your own research, track your expenses, pay quarterly taxes, and decide which gigs are worth the wear & tear & headache.
– Know what is happening in your target cities: It’s important to be able to forecast possible busy times. If you are more likely to make
Ultimately these gigs are a tough grind. Summers and winters can be a tough on ridesharing particularly in the bay area. Locals travel away during summer and in winter spend most of their money on gifts and travel to relatives. Tourist do need rides at these times but foot traffic is very light in winter.
Bottom line, these are great mlside hustles for part timers. But ridesharing is changing rapidly with new insurance requirements that lower your earning potential. I settled on a full time delivery job until I can find the right traditional job.
Like the old adage goes, don’t quit your day job. At the very least run all the numbers before you commit so you can make any informed decision.