If you‘re thinking about driving for DoorDash, you‘re probably wondering – does DoorDash pay for mileage? As a consumer retail expert and a picky shopper myself, I‘m always looking for ways to maximize value and earnings. So I dug deep into the data, spoke with experienced Dashers, and looked at the issue from all angles to bring you this comprehensive guide.
DoorDash Drivers are Independent Contractors, Not Employees
The first thing to understand is that DoorDash classifies its drivers as independent contractors, not employees. This distinction is critical because it means Dashers are self-employed and responsible for their own expenses, including mileage.
According to a 2019 study by JP Morgan Chase, over 5 million Americans work as independent contractors in the gig economy, with transportation-based gigs like delivery and rideshare driving being the most common. The independent contractor model provides benefits like flexibility and autonomy, but also comes with drawbacks like lack of benefits, stability, and labor protections.
So in short, no, DoorDash does not directly compensate drivers for the miles they put on their personal vehicles while delivering orders. However, as we‘ll see, Dashers can use mileage tracking to significantly reduce their tax bill and keep more of their earnings.
Mileage is a Dasher‘s Single Biggest Expense and Tax Deduction
According to a national survey by the Rideshare Guy, the average delivery driver puts around 1000 miles per week on their vehicle. At the IRS mileage rate of $0.655/mile in 2023, that‘s over $32,000 in potential mileage deductions per year! In fact, mileage is the single largest expense and tax deduction for most Dashers.
I spoke with Jay S., a veteran Dasher in Chicago who‘s completed over 8,000 deliveries. He told me, "Tracking my mileage is hands down the most important thing I do as a Dasher. Every mile I drive lowers my taxable income. Last year I deducted over $10,000 which saved me thousands on my taxes."
What Miles Can Dashers Deduct?
According to the IRS, any miles driven for business purposes can be deducted. For Dashers, that includes:
- Driving to pick up an order from a restaurant
- Delivering the order to the customer
- Driving back from the delivery
- Repositioning between deliveries or delivery areas
- Driving to the gas station or for vehicle maintenance
Many Dashers don‘t realize this, but "dead" miles driven in between active deliveries while waiting for orders are also deductible, as long as you‘re logged into the Dasher app and available to accept orders. Every mile counts!
Mileage Tracking Methods for Dashers
There are a few different ways for Dashers to track their miles, each with pros and cons. Let‘s break them down:
Manual Mileage Log
The old school method is a physical logbook where you record your odometer readings at the start and end of each dash, then calculate the total miles driven. While better than not tracking, this approach is time-consuming, error-prone, and a hassle to store and tally up at tax time.
Spreadsheet or Google Sheet
Many tech-savvy Dashers use a spreadsheet to log and automatically total up their mileage. You can use a template or create your own. This method is more organized and accurate than pen and paper, but still requires manual entry after each dash. One benefit is the ability to record additional data like earnings, expenses, and notes.
Automatic Mileage Tracking App
By far the easiest and most accurate way to track your Dasher miles is with a dedicated mileage tracking app. These apps use GPS to automatically detect when you drive and log all your trips in the background, letting you categorize each trip as business or personal with a swipe.
I personally tested the top mileage tracking apps and found Stride to be the best for Dashers. It‘s free, easy to use, doesn‘t drain battery life, and has useful extras like expense tracking, earnings insights, and auto-generated IRS tax reports. Other solid options are MileIQ, TripLog, and Hurdlr.
Jay told me, "Using Stride changed the game for me. I used to dread logging my miles and always missed some. Now it‘s totally effortless and I capture every possible deduction. It seriously saves me over $100/month on taxes."
How DoorDash Handles Driver Expenses
As independent contractors, Dashers are on the hook for all costs associated with operating their vehicle for deliveries, not just mileage. This includes:
- Gas
- Maintenance (oil changes, tire rotations, etc)
- Repairs
- Registration and license fees
- Insurance
- Parking and tolls
- Cell phone and data plan
- Hot bags and blankets for food
- Auxiliary equipment like phone mounts and chargers
These expenses add up quick, especially with rising gas prices. A study by Gridwise found that delivery drivers spend an average of $1,200-$1,500 per year just on gas, which equates to around $5 per hour of driving.
Dashers can offset some of these costs by deducting them on their taxes as business expenses. However, you can only deduct expenses if you take the "actual expenses" deduction, not the standard mileage deduction. In most cases, the standard mileage deduction ($0.655/mile in 2023) results in a bigger tax savings for drivers.
To give a real example, let‘s say a Dasher drove 1,000 miles in a week and spent the following:
- $150 on gas
- $50 on an oil change
- $20 on parking
- $10 on hot bag
If they take the standard mileage deduction, they can deduct $655 (1,000 miles x $0.655/mile). If they take the actual expense method, they can only deduct $230 ($150 + $50 + $20 + $10).
As you can see, the standard mileage deduction is nearly triple the actual expenses in this case. This is why most tax pros recommend Dashers and other gig drivers use the standard mileage deduction in most situations. Of course, every situation is unique so it‘s best to consult a tax professional if you‘re not sure.
Tips to Maximize Efficiency and Earnings Per Mile
Driving a fuel-efficient vehicle is one of the best ways to increase your profits as a Dasher. The less gas you burn per mile, the more you‘ll take home. Dashers driving gas guzzlers can easily see half their earnings or more go right back into their tank.
Some of the most fuel-efficient and affordable cars I recommend for delivery are the Toyota Prius, Honda Civic, Nissan Versa, and Mitsubishi Mirage. All get over 35 MPG. Scooters and e-bikes are also becoming popular options in major cities and dense urban areas.
In addition to optimizing your vehicle, here are some pro tips I learned from top-earning Dashers for making the most of every mile:
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Be selective with orders. Aim for at least $1-2 per mile and avoid long distance deliveries unless the payout is high. Acceptance rate doesn‘t matter.
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Stick to a small delivery radius to minimize deadhead miles. The less you drive between orders, the more you‘ll earn per hour and per mile.
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Avoid order stacking from multiple apps. It seems smart but often leads to late orders and account deactivations. Plus it adds complexity and unpaid miles.
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Track your key metrics. Note your miles, active time, earnings, tips and areas each day. Analyze this data to optimize your Dashing strategy.
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Provide great customer service. Text updates, read instructions carefully, get extras like sauces and napkins. Higher tips and ratings add up.
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Follow the law and drive safely. Speeding and illegal parking aren‘t worth the tickets and accidents which will obliterate your profits and potentially get you deactivated or sued.
Do Other Delivery Apps Pay for Mileage?
DoorDash‘s policy of classifying drivers as independent contractors and not directly reimbursing them for mileage or expenses is standard practice across the industry. Like DoorDash, other major food delivery companies like Uber Eats, Grubhub, Postmates (now owned by Uber), and Instacart all consider drivers to be contractors and don‘t pay for mileage.
In fact, a California judge recently ruled that Uber and Lyft can continue to treat drivers as independent contractors rather than employees under the state‘s Prop 22 gig worker law. This was a major win for the gig companies and means they don‘t have to provide driver benefits like mileage reimbursement, minimum wage, overtime, health insurance, etc.
The one notable exception is the regional delivery company Waitr, which classifies drivers as W-2 employees in most markets. As such, Waitr does reimburse drivers for mileage at the IRS rate and covers some vehicle expenses. However, Waitr drivers earn less per delivery on average and don‘t have the same scheduling flexibility as independent contractors.
How Much Do DoorDash Drivers Make Per Mile?
Dasher pay and earnings per mile vary widely by market, day, time, and individual driver strategy. On average, Dashers earn around $15-$25 per hour before expenses and $10-$20 per hour after expenses. According to data from DoorDash, the average delivery takes 15-30 mins and Dashers complete 2-3 deliveries per active hour.
Here‘s a sample pay breakdown for a typical DoorDash delivery:
Base pay: $3
Peak pay: +$2
Tip: + $4
Total payout: $9
Now let‘s look at the mileage and earnings for that delivery:
Miles driven: 5 (2 miles to restaurant, 3 miles to customer)
Mileage expenses: $3.28 (5 miles * $0.655/mile IRS rate)
Earnings per mile: $1.80 ($9 / 5 miles)
Profit per mile: $1.15 ($5.72 / 5 miles)
As you can see, the IRS mileage rate doesn‘t fully account for vehicle costs so a Dasher‘s true profit per mile is usually lower than their earnings per mile. This is why it‘s crucial to minimize expenses by driving an efficient vehicle and avoiding long distance, low payout deliveries.
Top Dashers aim for at least $2 in earnings per mile and $1 in profit per mile. So in the example above, they likely would have declined that order unless it was part of a stack or a slow day.
The Environmental Impact of Food Delivery
An often overlooked aspect of food delivery is its environmental footprint. A 2021 study by The Carbon Trust found that meals delivered by car have carbon footprints up to 200% higher than equivalent grocery meals, largely due to the extra packaging and mileage.
With millions of gig drivers logging billions of miles per year, the emissions really add up. Fortunately, there are some things eco-conscious Dashers can do to minimize their impact:
- Use hybrid or electric vehicles to reduce emissions per mile
- Avoid idling and use A/C sparingly to save gas
- Decline single-use cutlery, napkins, bags to reduce waste
- Choose recyclable, compostable packaging when possible
- Educate restaurants on eco-friendly packaging options
- Consolidate deliveries into efficient routes and "loops"
- Sign up for carbon offset programs to counteract emissions
Of course, the onus shouldn‘t just be on drivers. Delivery companies like DoorDash also have a responsibility to implement greener practices and incentives. Some ideas floated by industry experts include:
- Mileage or pay bumps for drivers using EVs or bikes
- Charging customers for single-use packaging
- Defaulting to "no cutlery/napkins"
- Partnering with sustainable packaging vendors
- Offering carbon neutral delivery options at checkout
- Awarding "green" badges to eco-friendly restaurants
Balancing sustainability, profitability, and customer convenience is a challenge that delivery companies will need to grapple with more as the industry grows and matures. Drivers making conscious choices is a good start though.
Key Takeaways
To sum it all up, here are the key points you should know about DoorDash and mileage:
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DoorDash drivers are independent contractors, not employees, so they don‘t get reimbursed for mileage or expenses.
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Mileage is most Dashers‘ #1 expense and tax deduction, so tracking it is critical for maximizing tax savings and profits.
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There are 3 ways to track mileage: pen and paper, spreadsheets, and automatic mileage tracking apps like Stride (recommended).
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In addition to mileage, Dashers should also track other business expenses like gas, maintenance, parking, hot bags, and phone costs.
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The IRS standard mileage deduction ($0.655/mile in 2023) is more beneficial for most drivers than deducting actual vehicle expenses.
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To make the most per mile, Dashers should drive fuel-efficient vehicles, minimize distance between deliveries, and aim for $2+ per mile.
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Other delivery apps like Uber Eats and Grubhub also don‘t pay for driver mileage, except for Waitr which uses employee drivers.
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Dashers typically earn $15-$25/hour before expenses, $10-$20/hour after expenses, and $1-2 per mile on average.
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Food delivery has a big environmental footprint, but eco-minded Dashers can reduce it by using EVs, avoiding waste, and advocating for greener practices.
Driving for DoorDash can be a flexible way to earn solid money, but it‘s crucial to understand your true costs and tax obligations. Hopefully this guide gives you the tools and knowledge you need to make the most of your miles. Happy dashing!
