“Should I Deliver Full-time?” Maybe you have done some deliveries as a side hustle and you’re starting to think, “hey, this is paying better than my full time gig.” Or perhaps you have seen some of the ads out there suggesting you can make as much as $25 per hour, and you think that’s not a bad living. Maybe you’ve already taken the plunge and are wondering if it was a good decision.
I see that question all the time on forums: “I’m wondering if I should deliver full time.”
From my personal experience, I can tell you that yes, it is sustainable, depending on a lot of things. I can also say that no, it’s not a good idea, depending on a lot of things.
Translation: It depends!
Two years ago I made the decision to leave my position as a business manager for a nonprofit organization. It was a great place but there are things I want to do that a regular 9 to 5 wasn’t going to allow. At the time, we talked about me doing a few things for them part time. I thought about doing some deliveries for a pizza place part time to take up the slack when I decided to give Uber Eats a shot.
Things didn’t start out great there at first. Pay was terrible, until I kind of put the brakes on, I had this aha moment where I realized I’m an independent contractor thinking like an employee. Everything changed when I decided to start taking control, making my own decisions about delivering, evaluating each offer as a business decision. Around that time some budget things were changing with the nonprofit, and I was at a point where I realized I might be able to make a go of it doing deliveries as my main source of income. That’s about when I branched out, started picking up other delivery options, with Grubhub, Doordash and Postmates.
I had been putting my resume out for some things but the biggest thing I was running into was flexibility would be limited by too many of these opportunities. That’s when I decided to go all in on this, structuring my driving around the things I was wanting to do otherwise. For me, it’s been almost two years now and in my situation, the earnings have been amazingly steady. But the thing is that I was able to dip my toe into things, and then test some of the non-rush times, and after expenses and taxes have found this to be very much a sustainable way to make a living.
Six Reasons Why Full-Time Delivery May NOT Be a Great Option
It’s real easy to see things through my own eyes only, you know? It’s real easy for me to say hey, it works great for me, so it can work great for everyone. I have to say, as I look at a lot of people attempting to do this, this is NOT a good way to make a living for many people. There are a lot of things that someone has to really consider.
I love it, I love doing this but that doesn’t mean it’s the best thing for you. In fact, it could be the very worst thing you could do, depending on you and your situation. So I’m going to try to talk you out of it before I go further. There are some serious downsides to doing full-time delivery, and you have to determine if these are enough of a deterrent to you doing the same.
1. This is NOT a job.
You have to understand very clearly that there’s a huge difference between a full time job and running a business. As an independent contractor, you are running a business. That means that you don’t have the protections that go with a job. There is no minimum wage. There is no overtime. You have no workers compensation insurance. There is no unemployment if you get deactivated or if your market closes down. You have none of the protections that the law requires of an employee. No one is withholding taxes for you and no one is paying insurance for you. You are completely on your own.
It is NECESSARY that you understand this before you go all in. You are essentially deciding that I’m willing to take that risk, I’m willing to pass on all these protections. This can leave you extremely vulnerable, so you have to really search your soul, really be self aware and know if this is something you can live with.
2. Pay Can Be Inconsistent
If you have been doing this as a side hustle and are thinking of going full time with this, you have to realize that there’s a good chance that the pay won’t be the same over 40 or 50 hours as it was when you were doing this part time. Here’s the deal on side hustle work: most people doing this as a side hustle are working nights and weekends, which happen to be the busiest times. $25 per hour during the dinner rush does not mean you can make that mid day. It’s easier to pick and choose the most profitable times when you are doing this part time, but when you go to full time you may need to work times that aren’t as busy.
You also have to realize that there are peak times of year, and that can vary by market. In a lot of markets, winter may be much more profitable but summer may completely dry up. If you have many colleges in town you may have a real drop off when school is out because students like to order in a lot. At the same time, this can be a great summer job for students, which means your market could be more saturated with drivers during slow times. Be aware of the fluctuations and know if that is something you can work with.
3. Your Market May Not Be Busy Enough
Here’s something I have to be aware of a lot when talking about how to do this. For whatever reason, Denver is an extremely busy market for a lot of these companies. If I turn down an order I can be pretty sure another one is coming within minutes, usually faster. I’m not sure how much the liberal pot laws play into this, you know? So it’s easy for me to say yeah, it works.
But if you’re in a market where you can frequently sit for ten to fifteen minutes at a time between orders, and you feel forced to take everything that is offered to you, this may not be a good place to be doing delivery. Your market really has to be pretty busy with enough delivery offers worth taking to make this a viable full time option.
Those ads that say make up to $25 per hour are pretty attractive. A lot of people are skeptical, but I can tell you that I earn that or more pretty consistently. But that doesn’t mean I’m earning $25 per hour.
You have to understand that $25 per hour in delivery fees is not the same thing as $25 per hour in profit or actual earnings. This is a business you are running, and you are paying a lot of things you wouldn’t have to as an employee. You are not getting a lot of things that an employee would get. Your tax rate is higher than it is as an employee, and you are responsible for withholding your own taxes. Your car costs more than just gas, most of you when you take into account EVERYTHING invovled with your car it is going to come out 30 cents or more per mile in actual cost.
The thing is, you don’t know that because the only money coming out of your pocket is gas and the occaisional oil change. But you’re wearing your car out. Brakes, tires, all that will need to be done more often. Big ticket items will hit much sooner. And the value of your car is taking a hit. I call it a credit card on wheels – you ARE Running up costs but those costs will hit much later.
And then you’re not getting any paid time off. You’re not getting any insurance or protection. That is all up to you. A good rule of thumb when everything is taken into account is that your actual money left over after all this is half to two thirds of what you’re bringing in. Sometimes more, sometimes less……
5. YOU May Not Be a Good Fit.
Here’s the thing. You’ve got to have the right temperament and approach to make this work. This requires a certain approach and mentality to really be successful and to avoid some of the traps listed above.
If you are not good with money, especially setting money aside for expenses and taxes, I would say this isn’t a good fit. You HAVE to be good at this or it will bite you in the butt in a big way. You either are hit with a huge tax bill you have no way to pay, OR your car has worn down and you don’t have the resources to get it working, and your means of earning has ground to a halt.
If you are the type who values being a ‘good employee’ and you approach this like an employee job, I would say this isn’t a good fit for you. You can’t rely on the companies taking care of you, they won’t. You can’t rely on them rewarding you for being ‘good’ and taking all their offers, they won’t. They just won’t. If you think your loyalty to one company means they’ll be loyal to you, they won’t. You have to be willing to treat this like a business and think like a business owner. You have to be willing to take control.
6. This Could Be a Limited Time Opportunity.
I’m not sure that the independent contractor model of delivery will be around forever. It may not be around for very long at all.
California recently passed AB5, legislation that restricts the ability of companies to designate workers as independent contractors. Other states may follow suit. If companies cannot afford to utilize employees in those states and that happens in enough states, they may just close up shop. I believe it’s very possible that an employee model could actually work better for companies because of the quality control issues related to using contractors.
There’s also the question of if this is sustainable for the delivery companies. This past Tuesday, Grubhub stock dropped 40 percent. FORTY PERCENT. In less than a year they’ve gone from the dominant leader in market share to trailing Doordash and Uber Eats. Uber as a company is struggling with astronomical losses. Gary Veynerchuk and Tilman Fertitta (owner of Waitr) talked recently about how all of the delivery platforms are under water.
If these companies close up shop, leave your market, or go the employee route, you have the chance of being left high and dry. If you think of career as a long term thing, you may not want to call delivery a career for that very reason.
Still thinking “I should deliver full time?” Five Tips on Going Forward
After looking at those issues, are you still thinking about it? Each one of those things listed can be a serious deal breaker. None of them HAVE to be a deal breaker, depending on you and your market. Except maybe that last one. There are a lot of people who are making it, and actually doing quite well, doing this as the only source of income. I am one of them. Here are some tips that I would offer if you are still thinking about it.
Get your toe in the water.
Start to get a feel for how it works. Understand that it may start slow, it might not look good, but give yourself an opportunity for a little while to see how it works. If you’re already doing this as a side hustle, try to get some time free, even for a day or two, to see how the market is at other times. Talk to other drivers, see how it’s working for them. Get to know how busy your market really is and if it can sustain you.
I would really recommend, start off part time for a month or two. Don’t make any decisions right away good or bad. Get a feel for where you can improve, If it’s slow, get a feel for if there are other options that can supplement the slow periods. Once you feel good with that, try to find a way to do a trial run. If you’re working full time somewhere, can you get a few days off so you can test the waters for a full day?
Develop a Business Mindset
You HAVE to think like a business owner. Take control. Understand that when you are doing this, these companies are your customers, NOT your employers. You have to make the choices, to understand that bad things can happen, there are no guarantees, but YOU can decide what to do about them. You get to decide how to avoid those potholes.
The first 31 episodes of this podcast are entitled the 31 Day Courier MBA – and MBA stands for Mastering Business Attitude. Click on the MBA link at the website or go to those episodes – those go into a lot more depth about all sorts of aspects of running this as a business. But the main thing is, you have to be the boss. You have to take control. And you have to think in terms of business decisions.
Diversify Your Customer Base
If you are doing this full time, you cannot afford the kind of swings that can happen with one delivery company. They can change their pay terms – all of them do it on a regular basis and it’s rarely for the better. I mentioned Grubhub dropping as badly as they have been. One company can get some real bad PR. A company can over hire and saturate the market. The app can crash – if you deliver for Doordash, that’s a regular occurrence.
You cannot rely on only one company to deliver for. You need to have a backup. It’s really better to have several backups. Keep your options open. I highly recommend you get on with several companies. Deliver with them just enough to keep the account open, get to know their strengths and where you can mix them in.
Set Money Aside for Taxes, Expenses and Time Off
You HAVE to do the first two and I really recommend the third. If you are doing this full time, you really have to know your tax situation. Understand what your taxes are as an independent contractor and set money aside every week for that. You are doing your own withholding. You HAVE to do that or you’re going to be really hurting in April.
As I mentioned, your car is a credit card on wheels. You have to set money aside to pay that debt. That debt will come due when you have to do major repairs or maintenance, or when you don’t get as much for trade or resale due to all the miles. Know what your car costs per mile and set money aside for it. Say it costs you 30 cents a mile when you figure it all out, every week take 30 cents per mile you’ve driven and put that into an operations fund. Pay all your car costs out of that.
Finally, if you’re living week to week, you’re going to really be hurting if and when you have to take time off. There is no holiday pay. There is no sick pay, there is no vacation pay. If you get hurt, if you get sick and you can’t drive, you aren’t making money. I plan on about 3 weeks of paid time off, divide that up between all the other weeks I do work, and set that amount aside each week to a paid time off fund. Then when Murphy of Murphy’s Law comes to visit, you are ready, OR when you want to take some time off, you don’t have to scramble the week before and after to make up for it.
As I mentioned, the first 5 reasons above can be overcome by doing the things above. The one thing you cannot control is if the industry changes. You need to be ready to pivot when it happens.
The other thing is, you may decide that this isn’t what you want to do for the rest of your life. It can be awesome for now, but where do you want to go from here?
Use your time when driving to learn, listen to podcasts, listen to audio books. Start thinking through where you’d want to go. Do you enjoy the independence? Maybe this is a gateway drug to starting a business somewhere else. Start thinking about that kind of thing, start getting to know opportunities that fit who you are and your passions. Plan for things to change, because they will.
Should I Deliver Full Time? That’s Completely Up To You
I love doing this. I love it enough that I’m doing this goofy website and podcast, right? But there’s so much that is so much better than jobs I’ve had before – the freedom, flexibility… to me it’s much lower stress. AND I’m earning more than I’ve made in other jobs with as much or less time invested. For me it’s an awesome fit. For now. And here’s the other thing I love is that it can be a great transition into being able to do more. My time in the car has helped me learn things like how to put together a podcast, it has helped me learn other things that relate to other work I’m doing. So I love what it does for me now, but I love even more how it feels like a launching pad into other great things.
But that doesn’t mean it is for you. Only you can determine that. But be honest with yourself, be very real about your outlook. Understand, and understand fully and completely, what you are getting yoruself into. And be honest and self aware about if this is a good fit for you.