If you’re immersed in the tech world, odds are good that you’ve heard of the “gig economy”–a new world of business where independent contractors choose their own hours and the gigs they want through marketplaces like Uber, Lyft, and TaskRabbit.
But there’s a problem: Most rideshare drivers have never heard of the gig economy.
Stride Drive, a new app designed to increase take-home pay for Uber drivers, recently released a new survey of over 1000 drivers. The company found that 72% of rideshare drivers they spoke to never heard of the “gig economy.” However, 56% of drivers identified as “gig workers.”
Stride found something interesting: 66% of the drivers they spoke to only work as a rideshare driver part-time, and most did not plan to work as drivers for more than a year.
This leads to a challenge–despite the fact that these drivers are depending on Uber for their income, they don’t necessarily understand the financial differences in the “gig economy” of 1099 forms instead of annual W-2s.
Rideshare Drivers And The Gig Economy
Writing on LinkedIn, Stride CEO Noah Lang notes that “As the ridesharing industry matures, drivers are approaching their work with a part-time mindframe, yet a desire for longer term job engagement. Most drivers use their rideshare earnings to supplement existing income sources or as a carry-over between jobs.”
But even if you’re just driving for Uber or Lyft temporarily, you’re still part of the gig economy whether you like it or not.
This matters when it comes to filing taxes because drivers are able to take certain deductions (for instance, mileage and auto maintenance costs) since they’re using their automobiles for work purposes. And when you get a big fat tax refund check, that works.
The Gig Economy And Taxes
Because the pay from “gig economy” companies like Taskrabbit, Lyft, and Uber can vary week from week, finances can be hard. That’s why it’s so important to recognize ways to save money on taxes–a little bit of paperwork now can give you a lot of extra money come tax time.