You decided to give the gig economy a try. Maybe you signed on with Ubereats, or Grubhub, or Doordash, or one of the many other companies that use independent contractors to deliver food or goods for various restaurants and stores.
Gig economy apps offer big promises. But it doesn’t take long to find people on social media who are struggling or plain just couldn’t make it. Is it possible to earn a good living as an independent contractor courier? It it a profitable side hustle for someone trying to pay off debt or earn extra money for a vacation or dream purchase?
Is it guaranteed? Absolutely not.
As in any business opportunity, there are no guarantees. Sometimes the market isn’t right. Sometimes it’s just not a good fit. But I can tell you from experience that yes, you can be profitable delivering for these different companies. This website is dedicated to helping you operate your delivery business in a profitable manner, but I’ll sum it all up in one important strategy:
Be The Boss.
Go back and read that introduction again. Did you notice a recurring theme?
You are running a business. You may not have set out to do so. You probably don’t care about that, you just want to make some money.
But here’s the deal: As an independent contractor, you are legally working for these delivery companies as a business, NOT as an employee.
Too many people either don’t realize that, or don’t take it seriously. They think like employees, and that’s the easiest way to be taken advantage of in this economy.
Companies like Ubereats, Doordash, Grubhub and others bring you on to do deliveries, but they don’t want to commit to you like an employer has to commit to employees. They don’t want to pay the insurance to protect you, they don’t want to pay the taxes, they don’t want to cover your expenses.
They don’t want to pay the obligations of being an employer, so they sign you up as an independent contractor. That means that you are working for them as a business.
But they want you to think like an employee. They want it both ways.
It’s not right. It’s shady as all get out.
But it’s also a fantastic opportunity.
Because here’s the deal: When they bring you on as an independent contractor, they cannot by law treat you as an employee. They are limited by law in the control they can have over how and when you work.
Too many independent contractors fail to take advantage of the fact that they are the boss of their own business. They give the control back to the companies they contract for and lose out on the opportunities that come when you operate as a business.
Your best opportunity at success is to become the boss of your own company, and take the control that is rightfully yours. That means thinking like a business. If you want to succeed, you need to start making business decisions. In a nutshell, here are some key business principles that you need to adopt as the boss of your own business:
Understand the difference between revenue and profit
Revenue is the money that comes into your business. This is not pay – you are not an employee. The delivery fees and tips you receive are revenue, but remember that you are a business. The part that really matters is your profit, which is the amount that’s left over after your expenses.
The key to this is knowing what your expenses really are. For most doing deliveries, that’s in your car. It’s more than just the gas and insurance. It’s the wear on your car, the added maintenance, and the loss of value. Your job is to plan for these expenses so that you aren’t shut down by them.
Set your prices to be profitable
A cafe opened up in my neighborhood, offering great prices and huge portions. I have often thought that I’d rather charge more and stick around than to charge too little and go broke.
Obviously, we can’t set the delivery fees with these companies. Our way of setting our prices is determining what deliveries we accept. If you take a delivery from a slow restaurant a long way away, you will lose money on the deal. You have the right to say no. I would go so far as to say there are times you have a responsibility to say no.
Diversify your revenue streams
Another way to put it is, don’t put all your eggs in one basket. Ever hear of Murphy? He’s that guy from Murphy’s Law (if anything can go wrong, it will). When all of your money comes from one source, there’s too much opportunity for Murphy to pop up and ruin it all.
When the app crashes for Grubhub, do you have alternatives? If Ubereats decides to suspend your account for something that wasn’t your fault, are you screwed? If Doordash brings in more drivers than there are orders and you’re waiting a half hour between deliveries, does that create a crisis for you? It’s okay to have a favored app, but relying strictly on one provider is an invitation for disaster.
Do your market research
Some businesses work better in certain areas than in others. A high end retailer is more likely to be successful in an affluent neighborhood than in a lower income area. Large retailers and restaurants spend tremendous amounts of money and time researching demographics and spending patterns when determining whether to locate in a certain location.
Because someone is successful in Denver or San Francisco does not mean they will be successful in Omaha. You need to pay attention to what your market is like, and which companies are doing well in those markets. You also want to keep track of what times and locations are more profitable. You might have less parking trouble in the suburbs than downtown, but you may be driving significantly further. Your best times to deliver might be between 1 and 4, but if people aren’t ordering food then, that may not be a good choice. You may have only one delivery option and too often it’s slow.
There are times your research and experience may lead you to understand that delivery is not a profitable option in your market. There are times where you might conclude the best times for delivery aren’t the best for your personal lifestyle. And there are places and times where you know there is good money to be made. Understand your market and the trends and react accordingly.
Now: Go Take Control, Like a Boss!
This isn’t an exhaustive list, but these are some key concepts. The main thing here is to understand that your best chance for success is to understand that you are the one that makes the decisions. You do not need to be at the mercy of one company. You do not need to ask “how high?” when they say jump. You have the power to look at what works best in your market and to make your decisions accordingly.
You are the Boss. Not Grubhub. Not Ubereats. Not Doordash or Postmates or Caviar or Bitesquad or Amazon Flex or any of those other.