As an entrepreneur and small business owner myself, I understand the appeal of rideshare driving as a flexible way to earn extra income. Who wouldn‘t want easy cash using a car you already own, with no boss to report to? However, there are downsides that any aspiring driver should consider from a business perspective before jumping in.
Why So Many Drivers Are Hitting the Road
First, let‘s talk about why rideshare driving is exploding in popularity as a side hustle. Surveys indicate over 50% of gig platform workers start driving to pay household expenses. With inflation exceeding 8% this past year, record gas prices, housing costs skyrocketing, and families already working full-time jobs struggling to stay afloat, many are turning to companies like Uber and Lyft.
Approximately 90% of drivers work less than 40 hours per week on these apps, using them as a supplemental income source versus full-time work. But unpredictable pay and lack of basic worker protections still leave many in a precarious situation.
The Good: Enjoy Some Entrepreneurial Freedom
Operating essentially as freelancers, rideshare drivers benefit from the same perks of running any small business:
You set your own schedule – Log in to drive whenever fits your needs and family time. Late nights and weekends often see peak demand from recreational travelers.
Pick your locations – Some regions and events produce higher fares. Learn which hotspots work best for profitability.
Tax advantages – Claim valid rideshare-related expenses to lower tax obligations. Track gas, maintenance, tolls, etc.
Meet interesting people – Having random conversations and forging connections really appeals to some drivers.
Be your own boss – No managers or office politics to deal with (though poor ratings do matter in this industry!).
Pro Tip: Coordinating with 1-2 other self-employed drivers can allow you to operate an independent local car service without the big tech middleman taking 25% commission per ride.
The Bad: Don‘t Overlook Serious Downsides
However, there are also frustrating challenges that come with rideshare driving from an entrepreneur‘s perspective:
Expenses eat away at profits – After gas, taxes, rideshare insurance, maintenance, cleaning supplies, etc., pay isn‘t always great.
No benefits/support – As solo contractors, no health insurance, retirement plans, or paid leave. You‘re on your own.
Ratings make or break you – Unfair or retaliatory ratings can get you deactivated from driving with little recourse to appeal.
Increased accident risk – Additional time on the road ups odds of wrecks and claims. Rideshare insurance doesn‘t fully protect against coverage gaps.
If rideshare driving still appeals as a flexible income stream, going in informed is crucial. Limit risks by tracking all business expenditures, maintaining safety protocols, and proactively addressing any passenger concerns. Consider it one option in your entrepreneur toolkit to reach your financial goals month-to-month, not a guaranteed road to riches with no responsibilities attached.
Let‘s connect if you want to chat 1-on-1 about maximizing profit as an independent rideshare business owner operating without the big branding commissions!