# How do you set up your LLC in uber, lyft?



## ldWesty (Dec 21, 2015)

I created a new LLC, bank account and have pointed rideshares to the bank account.
I want to change over the driver contracts to use the LLC.
Has anyone done this?
Thanks, LarryDesaules, LLC.


----------



## 5 Star Guy (Nov 7, 2015)

First I'm thinking its best to cancel your account and open a new llc account but then I'm thinking you're driving your personal car with personal insurance. Not sure what the point is for the LLC, maybe for taxes since its not for insurance or the car you own. They might have an issue with the LLC since your paperwork for the insurance and registration won't match the llc. For taxes it might be good, you have to register your llc each year and pay the state a fee and the accounting costs more so I'm thinking its a good idea and not worth it.


----------



## Hunt to Eat (Nov 19, 2015)

ldWesty said:


> I created a new LLC, bank account and have pointed rideshares to the bank account.
> I want to change over the driver contracts to use the LLC.
> Has anyone done this?
> Thanks, LarryDesaules, LLC.


Just use the LLC to collect your weekly wages. That's all you need the LLC for. I have a couple LLCs for my other businesses, so I just have U/L make deposits into one of those existing LLCs.


----------



## 5 Star Guy (Nov 7, 2015)

You're better off as a D/B/A aka sole proprietor than LLC. Less paperwork and fees. I'm surprised the bank opened an LLC account just like that.


----------



## Hunt to Eat (Nov 19, 2015)

5 Star Guy said:


> You're better off as a D/B/A aka sole proprietor than LLC. Less paperwork and fees. I'm surprised the bank opened an LLC account just like that.


DBA doesn't afford any corporate protections at all. LLC provides a little bit of protection.


----------



## ldWesty (Dec 21, 2015)

5 Star Guy said:


> First I'm thinking its best to cancel your account and open a new llc account but then I'm thinking you're driving your personal car with personal insurance. Not sure what the point is for the LLC, maybe for taxes since its not for insurance or the car you own. They might have an issue with the LLC since your paperwork for the insurance and registration won't match the llc. For taxes it might be good, you have to register your llc each year and pay the state a fee and the accounting costs more so I'm thinking its a good idea and not worth it.


I did the LLC to protect my IRA, house, etc assets from possible lawsuit. I realize we're insured by rideshare but for the price of a $50 setup fee, wanted more peace of mind. I can use it for my private - non rideshare- rides as well.
Larry


----------



## Oscar Levant (Aug 15, 2014)

ldWesty said:


> I created a new LLC, bank account and have pointed rideshares to the bank account.
> I want to change over the driver contracts to use the LLC.
> Has anyone done this?
> Thanks, LarryDesaules, LLC.


if you set up an LLC you can't be named in a class action lawsuit so whatever benefits the lawsuit gives , , you will be excluded, just keep that in mind


----------



## 5 Star Guy (Nov 7, 2015)

Hunt to Eat said:


> DBA doesn't afford any corporate protections at all. LLC provides a little bit of protection.


I would normally agree, not in this case. There is no company. He is an independent contractor. If he doesn't work, drive in this case there is no business. That's the difference. There is no LLC insurance, registration, nothing but an account. Check your state, an LLC registration is $500 a year and your accounting for taxes cost more. Not sure what you are protecting or what value it brings. People doing network marketing have an LLC so it can be inherited. This all stops as soon as he stops driving. I don't see any advantage to an LLC, DBA might be a better bet where you don't need the insurance and registration to match your business name.


----------



## 5 Star Guy (Nov 7, 2015)

ldWesty said:


> I did the LLC to protect my IRA, house, etc assets from possible lawsuit. I realize we're insured by rideshare but for the price of a $50 setup fee, wanted more peace of mind. I can use it for my private - non rideshare- rides as well.
> Larry


Non rideshare rides, then you need new insurance, registration and must file with the state. Without the state filing you are a DBA.


----------



## ldWesty (Dec 21, 2015)

Oscar Levant said:


> if you set up an LLC you can't be named in a class action lawsuit so whatever benefits the lawsuit gives , , you will be excluded, just keep that in mind


Understood, Thankya.


----------



## Hunt to Eat (Nov 19, 2015)

ldWesty said:


> I did the LLC to protect my IRA, house, etc assets from possible lawsuit. I realize we're insured by rideshare but for the price of a $50 setup fee, wanted more peace of mind. I can use it for my private - non rideshare- rides as well.
> Larry


Wait, you're insured by rideshare? How does that work?


----------



## Hunt to Eat (Nov 19, 2015)

5 Star Guy said:


> I would normally agree, not in this case. There is no company. He is an independent contractor. If he doesn't work, drive in this case there is no business. That's the difference. There is no LLC insurance, registration, nothing but an account. Check your state, an LLC registration is $500 a year and your accounting for taxes cost more. Not sure what you are protecting or what value it brings. People doing network marketing have an LLC so it can be inherited. This all stops as soon as he stops driving. I don't see any advantage to an LLC, DBA might be a better bet where you don't need the insurance and registration to match your business name.


OK, you don't understand how an LLC works. DBA is probably best for you.


----------



## 450DA (Nov 12, 2015)

I am in the process of working on this in ohio now, to be afforded the protections of the LLC i believe they have to be on the title and insure the car you are using. I will get back to you once I have a clear answer on this.


----------



## 5 Star Guy (Nov 7, 2015)

450DA said:


> I am in the process of working on this in ohio now, to be afforded the protections of the LLC i believe they have to be on the title and insure the car you are using. I will get back to you once I have a clear answer on this.


An LLC is not for running a mom and pop business. We are only talking about driving for them, its not your own business. You would need the car registration, car insurance and business insurance to be fully covered and pay the yearly LLC fee to the state to have a legit LLC. I don't see any benefit, LLC taxes work the same as DBA. The only protection you really have is insurance, which is ironic since you are not fully covered unless you have a new TNC policy or live in a state with brand new regulations, I think OH and NC but I haven't had time to look that over thoroughly.


----------



## Hunt to Eat (Nov 19, 2015)

450DA said:


> I am in the process of working on this in ohio now, to be afforded the protections of the LLC i believe they have to be on the title and insure the car you are using. I will get back to you once I have a clear answer on this.


If you have a living trust, your car should be registered to the trust. That's what I did with all my cars.


----------



## ldWesty (Dec 21, 2015)

Hunt to Eat said:


> Wait, you're insured by rideshare? How does that work?


Lyft and uber provide primary liability and collision insurance for drivers on their way to a fare and during a fare.
So I read on TheRideshareGuy website.


----------



## grams777 (Jun 13, 2014)

I'd be careful spending extra money on an LLC. I was a C-Corp once with bank account, office, payroll and everything. I was sued both personally and corporately. They name you both on the lawsuit. It will cost you a small fortune to proceed with the lawsuit to the point where you can get removed from the lawsuit. There is nothing that prevents them from filing against you. You will have to file various motions etc. to try to get yourself off the lawsuit, if at all. The legal fees alone can bankrupt you in no time.


----------



## observer (Dec 11, 2014)

LLC will only protect you if you have employees driving for you. 

If YOU are driving and have an accident, YOU will be sued in addition to your LLC.


----------



## 5 Star Guy (Nov 7, 2015)

grams777 said:


> I'd be careful spending extra money on an LLC. I was a C-Corp once with bank account, office, payroll and everything. I was sued both personally and corporately. They name you both on the lawsuit. It will cost you a small fortune to proceed with the lawsuit to the point where you can get removed from the lawsuit. There is nothing that prevents them from filing against you. You will have to file various motions etc. to try to get yourself off the lawsuit, if at all. The legal fees alone can bankrupt you in no time.


There is no protection when its just you. I'm the first to say you can be sued for anything, it doesn't mean they will win though.


----------



## 5 Star Guy (Nov 7, 2015)

ldWesty said:


> Lyft and uber provide primary liability and collision insurance for drivers on their way to a fare and during a fare.
> So I read on TheRideshareGuy website.


That's not true, that's what they want you to think. Better read it from them directly. Some will say this is changing, sure maybe 2 states recently is not most.


----------



## Hunt to Eat (Nov 19, 2015)

ldWesty said:


> Lyft and uber provide primary liability and collision insurance for drivers on their way to a fare and during a fare.
> So I read on TheRideshareGuy website.


Uh...OK. Don't put too much faith in that insurance. If you don't carry a livery insurance policy, you're essentially driving around uninsured when you're driving Uber and Lyft. Let me explain how that insurance works...

Before you can drive for Uber, you have to prove that you have personal automobile insurance on you vehicle. That's one of the pieces of documentation you have to provide before you're allowed to start driving. However, here is how the claim-rejection sequence typically plays out.

1) Uber driver is involved in an at-fault accident.
2) Uber driver notifies Uber and speaks to a James River claims specialist.
3) James River tells driver to first file the claim with his personal insurance company.
4) Uber driver follows the above instructions. He is then dropped by his insurance company for violation of the livery exclusion. Not only is the claim denied, but because the Uber driver was in gross violation of the livery exclusion, the driver's personal insurance company takes the position that the driver was never insured at the time of the accident.
5) Uber driver contacts James River again as the secondary insurer expecting to be covered.
6) James River claims specialist learns that driver was operating in gross violation of the livery exclusion of his personal policy and the the driver's (former) personal insurer has taken the position that the driver was uninsured at the time of the accident.
7) James River denies the claim on the basis that the driver was not truthful about having insurance since the driver's personal carrier says he was not insured at the time of the accident.
8) Driver is left out to dry by both insurance companies. The driver now must come out of pocket for his medical and property damage. Finally, the driver will likely pay extremely high insurance rates for the next three years now that he has been dropped by a carrier for violation of policy terms.
9) The James River policy will cover the medical claim(s) of passengers. However, passenger(s) can still sue the Uber driver in civil court for negligence and damages.

The bottom line here is that Uber (and James River) have built part of the Uber business model on the fact that the vast majority of drivers will be in violation of their personal insurance policies the minute they carry a rider and receive compensation for it.​


----------



## 5 Star Guy (Nov 7, 2015)

Not to scare anyone but there was just a head on collision in the US, a car hit them and the pax died. Definite wake up call if this is for you. Some insurance companies are now rolling out a TNC policy to cover this issue. Its not available in most states, definitely get it when it is in your market. Its not just your bills, you have to pay for lost wages, every expense that wasn't an issue before the accident.


----------



## ldWesty (Dec 21, 2015)

5 Star Guy said:


> I would normally agree, not in this case. There is no company. He is an independent contractor. If he doesn't work, drive in this case there is no business. That's the difference. There is no LLC insurance, registration, nothing but an account. Check your state, an LLC registration is $500 a year and your accounting for taxes cost more. Not sure what you are protecting or what value it brings. People doing network marketing have an LLC so it can be inherited. This all stops as soon as he stops driving. I don't see any advantage to an LLC, DBA might be a better bet where you don't need the insurance and registration to match your business name.


LLC is $50 to set up in Colo, took 15 mins online. IRS took another 15.
I chatted with a lawyer today, he said if I can get rideshares to name the LLC in the contractor doc, that would be the way to go. We'll see, this is a learning experience.


----------



## ldWesty (Dec 21, 2015)

Hunt to Eat said:


> Uh...OK. Don't put too much faith in that insurance. If you don't carry a livery insurance policy, you're essentially driving around uninsured when you're driving Uber and Lyft. Let me explain how that insurance works...
> 
> Before you can drive for Uber, you have to prove that you have personal automobile insurance on you vehicle. That's one of the pieces of documentation you have to provide before you're allowed to start driving. However, here is how the claim-rejection sequence typically plays out.
> 
> ...


Good information, thanks. I don't trust the insurance companies and want to protect against liability.
I really like driving though...
I guess we're all hanging it out there.


----------



## 5 Star Guy (Nov 7, 2015)

Good luck but I think you just tossed everything out the window. Now you will need llc auto insurance, llc business insurance and I would not put your name in the llc as you did in the original post. Its ironic but the more I think about it the more liability you are incurring setting up an LLC and you're screwed if you don't have that insurance coverage, quarterly income filings and annual llc renewal fee.


----------

