Secrets to Having a Successful Ridesharing Side Business

Ridesharing is growing in popularity as a side hustle, and for some people it is a big part of their income. Whether you prefer Uber, Lyft or another company, this type of on-demand transportation helps connect eager drivers with people who need a lift. Although the ability to make money from driving your car and having a flexible schedule is appealing, there are several things you need to have a successful ridesharing side business.

Get the Right Insurance

If you are driving strangers to different destinations every day and getting paid, having regular car insurance is not enough. Keep in mind that even if you sign up with Uber or Lyft, you are still considered an independent contractor and responsible for paying your own insurance. You will need rideshare insurance that extends your coverage.

If you do not get rideshare coverage, you run the risk of the insurance company canceling your personal policy or denying any claims you make because you are using the vehicle for commercial purposes. Uber and Lyft also offer additional liability insurance, but you still need rideshare coverage for your car.

Pay Attention to Timing

Understanding the busiest times for rideshares is crucial. If you can predict when and where people will need a lift, you will make more money. In general, weekends and holidays tend to be the busiest for drivers, and airport runs can be very profitable. But you do not have to guess the schedule or live at the airport. Consider using a free app like FlightStats to see when flights are arriving or departing, so you can plan.

Many drivers share that they make most of their money during evening or weekend hours. Depending on your location, you may have long periods without any ride requests during the day. Make sure you think ahead and consider how much you can realistically make from ridesharing. Consider doing it part-time at first to evaluate the local market.

Understand Tax Obligations

When you drive for Uber, Lyft or another company, you are self-employed and must pay taxes. Since you do not get taxes taken out of your payments as an independent contractor, it is your responsibility to track the income and pay them. You may owe both federal and state income taxes, depending on your location. Some rideshare drivers have to make estimated tax payments every quarter, so make sure you talk to an accountant.

Fortunately, the hours you spend driving for your side hustle may count as a deductible expense. However, you need to keep careful records of your mileage. The SherpaShare app works for Uber or Lyft to track your miles and expenses, so you can export the data. In addition, you need to pay attention to fuel costs, insurance and other payments associated with your rideshare business. All of these items may need to be tracked for your expenses.

Consider Signing Up With Multiple Companies

Many drivers increase their rideshare earnings by signing up with multiple companies. In addition to Uber and Lyft, you may be able to sign up for Sidecar, Fasten, Gett, Juno and others. However, juggling multiple companies can be a challenge, so consider using an app like Mystro to switch between driving platforms. It lets you filter fares, auto-accept trips and switch apps.

Another option is to sign up to deliver things with your car. Many rideshare drivers fill in their work schedules by delivering items for companies such as Instacart, DoorDash or Postmates. For example, Caviar lets you bring food from local restaurants to customers.

Focus on Customer Experience

Your passengers are customers and providing them with the right experience is important. This means going beyond being on time, friendly and polite. Consider letting the passenger choose the music and giving them multiple options. In addition, make sure you have bottled water for each passenger. Some drivers make small snacks, gum and other refreshments available. Others like to provide multiple charging cables and stations for customers. If you do this, make sure you have ones compatible for iPhones and Androids.

You can have a successful ridesharing side business. For many people, it is an important source of supplemental income. Follow these tips to make this side hustle profitable and fun.