I'm just perplexed when they say they're losing money (or making so much less than minimum wage that they may as well be) but they keep on doing it instead of stopping. If they're not just blowing off some steam with hyperbole, they would literally be better off staying home on the couch.
Most people don't drive Uber as a job. It's a second or third job. Make-you-own-hours is what makes that possible.
> If they're not just blowing off some steam with hyperbole, they would literally be better off staying home on the couch.
I mean, ditto for payday loans -- you're better off not having the money. Unless you actually need the money to make rent. Then you're screwed.
Uber is better than payday loans, but if you're depreciating your car at a faster rate than you're making money, you're still up against a negative expected value.
Landlords use depreciation to have low taxable income despite being cashflow positive. I don't see why Uber drivers shouldn't be able to. They're making business use of a physical asset (their car).
Example 10-mile trip: 1.25 base fare + (10 miles * 1.15 per mile) = 12.75 * 80% (driver's share) = $10.20 revenue - 5.40 deduction for mileage = $4.80 revenue reported. For somebody in 20% tax bracket, this could yield $1.08 in savings.
Although using the per-mile deduction negates the ability to deduct line item expenses, such as gas, car washes, etc.
Something like - your car cost $30,000 and depreciates over 10 years, so $3,000 per year (just making up numbers, no idea if/how the IRS depreciates a car). So you'd have a $3,000 loss in the value of the car per year until it drops to 0. If the car was used 40% of the time for business (driving for Uber) you could claim 40% of the depreciation - $1200. I guess then you'd have to separately itemize all the gas, maintenance, etc.
But if you're actually losing money on the Uber-driving endeavor when that is factored in, whatever revenue you get should be tax-free. Of course, I suppose that only works if you're an independent contractor / business, and Uber drivers fought so hard to get treated as employees instead. Oh well. Employees get screwed when it comes to taxes.