# What New Drivers Need To Know About Insurance And Paychecks



## UberNorthStar (Jul 7, 2015)

My comments are going to rain on the new driver's parades. I have not started driving because I wanted to see what Uber is all about. Here is what I have learned. I wrote this to inform. Be aware of your obligations.

1) If I am in an accident that is my fault while I am driving with the app on, I am responsible for the damage to my car and my medical bills. In Texas most personal auto policies have a phrase "Exclusion: Vehicles for hire." (This exclusion applies to pizza drivers, too.) You risk losing your personal policy should you submit a claim. Check your insurance contact.

Uber insurance currently. is for your liability _after_ you accept a ping until you drop your passenger off. You are in an area where there is a gap in insurance while the app is on & you are waiting for a ping. Personal insurance may (will) deny the claim, then Uber insurance will kick in w/$1,000 deductible.
_*
Unfortunately,*_ your personal insurance company has cancelled your policy. One commits insurance fraud when he files an accident claim on personal insurance and the he is actively using his vehicle to make money.

Solution? Check with GEICO or USAA to see about "rideshare" insurance. Those two companies offer this type of insurance.

2) Uber classifies you as an independent contractor (self-employed).
A. Uber does not pay your FICA (Social Security and Medicare) and federal withholding taxes. You as the proprietor of a business do. Taxes are supposed to be done every 4 months. You pay double the FICA tax as you are the employer/employee. Self-employment tax is currently 15.3%.

B) Have you figured out the cost to operate your car? Aside from gas one needs to include oil changes, maintenance costs, tires, and more. Use the blog below to help you figure you true costs, or just use the IRS standard deduction of 57¢/mile.

https://uberpeople.net/xfa-blog-entry/how-to-calculate-costs-as-an-uber-driver.23/#comment-499

C. Record the miles you drive while on the app.. Start when you turn the app on to actively find a rider, and make your end odometer mileage when you turn the app off each day. There will be deadhead miles when you are not carrying pax. Those are still miles to count for IRS purposes. Try to stay in one place while waiting for the next ping to avoid the deadhead miles. I plan to use a Starbucks located near where I want to accept riders or where I just dropped off a rider.

3) Your paycheck arrived in the mail and you are excited about the money you earned!! You rip into the envelope from Uber only to find out the check is not as much as expected. What happened?
A. Uber took out $1 for each fare you drove that pay period. Although it is called a Safe Ride Fee, consider it your payment to Uber for the James River commercial liability insurance provided to you.

B. Out of the amount left after the 3A deduction* Uber a took 20% cut* per the Partner Agreement that you may not have read, although you did agree to the terms and conditions sometime during the driver application process. It went into effect the first time you accessed the Uber platform for drivers.

Twenty percent is your payment to Uber for using their driver app technology that payperiod. As an entrepreneur Uber is _your client. _

4) Your personal deduction.
A. Suggestion: Multiply the #miles you drove by either the final figure from 2B, or just use the standard IRS deduction of 57¢/mile. Take that amount out of your paycheck & use it for gas the next week. What is left at the end of next week put in an account for future car expenses.

B. For shit and giggles multiply the remaining money in the paycheck by 84.7%.
[(Remainder - 15.3% self-employment tax = profit) (15.3% + 84.7% = 100%)] You are now looking at your true profit from the fares Uber collected on your behalf that pay period.

Side note . . . Should you be tipped, add that week's total amount of tips to the amount of your paycheck for a better chance of showing a profit to yourself. It is your choice to voluntarily report them to the IRS.

_*Remember the Partnership Agreement?*_ Print it out to see what you agreed to when you first used the driver's app. The current one was updated April 8, 2015. Although I was activated on 07/02/2015, the partners agreement I agreed to was dated Nov 14, 2015.

https://www.uber.com/legal/usa/terms



Trebor said: said:


> . . . they are secretly Taxi drivers.


I am not a taxi driver. I am a person who has fallen for "Flexible hours. Earn all you want" schemes like Amway, Avon, and Tupperware.

In this case by remembering my past experiences I took the time to research this endeavor for which I am committing my time. I drive around the Houston area. If I share the ride, all the better.

About the car inspection for your permit . . . Part of the inspection is checking the car (front seat and back seats) to be sure it is free of clutter. Be sure you clean your car out before going to the permit office.

JM2¢W+


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