Who needed to save gas delivering for Grubhub, Doordash, Uber Eats, Postmates and others when it was so cheap??? If there was anything wonderful about the whole stay at home ordeal, it was that gas prices bottomed out to next to nothing for awhile.
I heard some say that it was kind of like a hair brush for a bald man though. If you're staying home and not going anywhere, what good is cheap gas??? But for those who continued to do delivery, there was an added bonus
Sadly, those days are over. Gas prices have been climbing back up. In my market they're pretty close to where they were before everything went crazy. The good news is it's still pretty low for summer months, but I expect it may be catching up soon.
As couriers, gas is the one expense that we notice the most. That's money coming out of our pocket every time we fill up, and every delivery brings us closer to having to fill up again (unless you deliver by bicycle or on foot).
How do you keep that fuel cost down? How can we save on gas and keep more of our earnings from Grubhb, Doordash, Postmates, Uber Eats for ourselves? Here are a few tips.
Tip Number 1: Don't Drive So Much
This one is a bit obvious, isn't it? Less driving equals less gas.
You would think so, but you'd be amazed at how many people think it's a great idea to drive as many miles as possible. Some think that because you can deduct 57.5 cents per mile (2020) on your taxes, the more you drive the less you pay in taxes.
Don't be that idiot.
Do the math here: Does it really make that much sense to spend between 25 and 50 cents so you can pay 9 cents less on your taxes? The bottom line is, your car costs between 25 and 50 cents (depending on its age and value and to a lesser degree, gas mileage). And if you're already driving a lot of miles chances are you're not paying income tax, so the only savings are on self employment tax. And that savings is 9 cents a mile.
The SINGLE greatest thing you can do as a delivery driver to increase your profits is to drive less.
Here's the deal: the SINGLE greatest thing you can do as a delivery driver to increase your profits is to drive less. That has more impact than anything else. That really came home to me when I started noticing with Uber Eats that I made more money when I decided to accept or reject offers based on the distance instead of the offer amount.
- Fewer miles = less gas
- Fewer miles = less wear and tear and less depreciation on your vehicle
- Shorter drives = less time per delivery = more deliveries per hour
- More deliveries per hour = more payouts = more income
That's great, but how do I drive less?
It's real easy to say that, isn't it? Some of these deliveries go a long way. If I don't drive, I can't earn.
That's true, but only to a point. Remember that you're an independent contractor. You can make choices. You can choose where to deliver (and where not to). Most importantly, you can choose which offers to accept.
Take money out of your paycheck each week for each mile you drive.
This is a great way to prepare for all the costs that go with owning a car, especially future car replacement or repair costs. I do 25 cents a mile, and then all my costs like gas, maintenence etc come out of that.
But there's a benefit I hadn't realized.
There's a psychological impact. You get paid by everyone for the week, and then you take that per mile gas out of your check and you're really feeling it on how much less you have. Folks, that 25 to 50 cents a mile thing is real. You'll just pay it later. But this makes it even MORE real. Don't fall into temptation to skip this.
By doing this, it's making the real cost of driving around very very real to you. That's going to provide motivation.
Make distance a major factor in your decisions on which offers to accept or reject
If you want a real simple 1-factor test on deciding which offers are worth taking, here it is: Focus on short deliveries.
In fact, I would say look at the distance before you look at the price. I don't mean dollars per mile – in my opinion that's a nearly useless stat. Distance is usually the best indicator of how long a delivery will take (of course the restaurant is a factor). If I can get three low paying short-distance orders done in the same amount of time as the higher paying order, I'm almost always going to profit much higher for those three.
My best advice for accepting offers is the 40 cent rule: The delivery needs to pay 40 cents per minute. Divide what you expect to get for the delivery by how many minutes you think it will take, and if it pays 40 cents a minute or more, it's a good delivery. I've found that over two years of delivery that short distance deliveries are far more likely to meet that 40 cent rule than longer ones.
Choose delivery areas that have shorter distances
Downtown used to intimidate the crap out of me. I hated it. Parking, traffic, and then the way the streets downtown here in Denver work, it's confusing. But the crazy thing was that when I started tracking where I was earning the most profit per hour, Downtown was far and away the most profitable.
Most of that was because I could get deliveries done downtown. They were much shorter, and even with traffic hassles, they were faster.
I felt like I was making more in the suburbs, payouts were higher and it was easier to get in and out of restaurant. But as I tracked profit per hour by area, I was making the least there. It all had to do with the distance. It cost more and I completed fewer deliveries due to drive times.
Pay attention to how far you're driving in different parts of town and start narrowing your choices to those areas where your average distance is lower.
Wrapping up on driving less
Now this tip #1 is the one I'll have spent the most time on, because I think it really is the most important. I've talked to couriers who were driving a Prius and making about the same amount of money as I am, and it turns out I was spending LESS on my gas guzzling Equinox than they were with their Prius (and my overall costs were MUCH lower than theirs). The reason? They were putting 3 times more miles on their cars than I was for the same amount of money.
Don't do that.
Tip Number 2: Buy Lots of Groceries
Okay, use this in moderation. If you buy too many groceries you run the risk of reducing your fuel economy because your poor car is having to carry more weight.
How do groceries help you save gas as a contractor for Doordash, Uber Eats or Grubhub?
This is one of the biggest fuel cost savings for me. We have three kids still in the house. Or young adults, they're living with us while going to school. It's cheaper to feed them here than it is to pay for a dorm and meal ticket, right? They eat. A lot.
Our grocery store is one of those that has a gas station, and you can earn fuel points. That's huge with our family. I know Krogers, Safeway, HyVee and I'm sure a number of others have a program like that. $500 in groceries means 50 cents a gallon off your gas.
When gas got crazy cheap a couple months ago, I filled up for 19 cents a gallon.
Tip 3. Look at Gas Saving Tools.
There are a few resources that come to mind.
Getupside is a cash back app that will give you cash back for purchases at participating gas stations (and some restaurants, depending on your market). You pull up a map, see the available gas stations and the discounts available, and what the effective price is after purchase. This can be very effective when you are out and around and low on gas.
As I look right now, cash back in my area is between 11 and 21 cents per gallon. Your cash back totals accumulate and then you can cash out through gift cards for restaurants, theatres, big box stores, or you can request a check or paypal transfer.
The Getupside process is pretty easy
You enter partial details of your payment card number into the app. Then you claim a particular offer. At that point, you hit arrived when you are at the gas station, buy your gas, and the app does the rest. It's a fairly simple process.
I bought over 1200 gallons of gas last year. If I averaged 15 cents per gallon cash back, that could add up to $180 in gift cards or cash back for that time. I didn't earn that, because there are enough times that it made more sense to buy my gas at gas stations that weren't on their network. I'll get into more on that in a bit.
Sign up for GetUpside with my affiliate link and use the GetUpside Promo Code AFF20 to receive 20 cents additional cash back on your next fill up.
The whole thing about promo codes brings up a good point about GetUpside. They have a bonus way to get even more cash back. They will give you a referral code. If someone uses your code to sign up, you and your invitee get 15¢ bonus cash back on the next fill up. You'll also receive a 1¢ per mile bonus for each gallon they continue to use.
Update: Getupside recently changed the terms of their referral program. They no longer allow personal referral codes to be published on websites and blogs or any types of mass distribution. Previously I had listed my personal referral code, but since the change in their terms I've switched to an affiliate link. Full disclosure though, I do still receive compensation for people who sign up to the app through my link.
Even with those changes, you can still refer friends and family. You still get the 15 cents cash back on your next fill when someone uses your code and you still get the recurring penny per gallon when your referrals sign up. GetUpside may have additional payment terms for some accounts.
There are a number of things I like about the GasBuddy app. It starts with a much more inclusive map of gas prices that are available, based on reports from other users. For example, I can see gas prices from King Soopers and Costco, which are not on the GetUpside platform. Sometimes you'll find a straight up price somewhere that is lower than the effective discount after cash back from GetUpside. They also have a couple of features that manage your driving, including a fuel log and a program that can analyze how you are driving and can make suggestions for better fuel efficiency.
The cost savings potential with GasBuddy is with their debit card. You can get a debit card that attaches to your bank account. When you buy gas using their card, you can get 5 to 25 cents per gallon savings. For the higher savings, you'll have to pay for the premium subscription which is $9.99 per month. They also have a gas back program where you are rewarded when you use your card for purchases at partner stores.
You can find more by going to their website at Gasbuddy.com or search for them on the Apple or Android app stores. This link is not a referral or affiliate link (though I'll be honest that I wish it was).
Uber Eats GoBank Card
If you deliver for Uber Eats at all, it's a good idea to get the GoBank card from them. It's free. Most people use it for instant cash back (something I don't think is a great idea) but it also has a cash back feature of its own. For any gas at any level, you get 1.5% cash back (and an additional 1.5% for gas bought at Mobile or Exxon stations). If you deliver enough with Uber Eats under their Uber Eats Pro program, you can get up to 6.5% cash back for gas purchases.
The beauty of the Uber Eats card is you can stack it with other savings. This past weekend I spent $50 on a fillup (both my wife's and my car). We got $5 cashback on GetUpside and another $2.50 from Uber Eats. Even when the gas prices are lower (such as with grocery points or at a warehouse club like Costco or Sam's Club) you can still get your cash back using the Uber Card.
Not on Uber Eats yet? You can sign up with my referral code. Depending on where you are and what their need is for new drivers, you may have bonuses for completing so many deliveries and I may receive a referral fee.
If there is a certain brand of gas station that you frequent, look into their fuel rewards programs. Some have a few cents off per gallon, others will have a point system. The grocery store programs mentioned above would technically fit into this category.
The dominant ones here are Costco and Sam's Club. Many times the prices at their gas stations can be lower than you'll find at other places after the effective savings on their rewards programs. Personally, I find that it fluctuates. There are times where the bargain is incredible. Other times, it's right up there with everyone else.
Tip 4. Fuel Efficiency.
I differ from a lot of people in that I don't put as big an emphasis on this as some others do.
You'll find a lot of advice about getting a hybrid, use a smaller car. Good gas mileage is not a bad thing by any means, and obviously if you can use up less gas for the miles you are driving, that can be very good. But if you're taking out a loan on a newer more efficient vehicle, you're losing a lot more money in other things than what you save. For me in particular, even if you GAVE me a Prius, I'd probably lose money because of using it. That's because for me, being a taller guy, getting in and out of those things isn't easy. And if I'm doing that dozens of times a day, I'm just not going to want to keep driving. If I'm not driving, I'm not making money.
The other thing you can do is look at how you're driving. Are you driving around in between deliveries? What about quick starts and hard braking? Are you leaving the car idling when dropping food off? This is where a drive analysis tool like that on GasBuddy can be useful.
Some Final Thoughts on Gas Savings as a driver for Grubhub Doordash Postmates Uber Eats
Here's the most important thing: Always look at the big picture.
Think about what it costs you to get the savings you are pursuing. You'd be surprised how often the cost is greater than the savings.
Here's an example. There's a gas station 6 miles away that is 15 cents a gallon cheaper than anything else. If I can put 15 gallons in my tank, that's going to save me $2.25. That's perfect if I'm already going to be going that way. But if I have to go out of my way to get there, it's not worth it.
Think about it: It's 12 miles out and back. At 25 cents a mile, my TOTAL cost of operating my car, I just spent $3 to get a $2.25 savings. And oh by the way, it's going to take about 20 minutes per round trip. We'll use the 40 cent rule here – if you're making $24 per hour, it's 40 cents a minute. If you're spending 20 minutes driving out of the way to get that gas savings, that's 20 minutes you can't be delivering. That's an opportunity cost of $8.
Now it's costing you $11 to save $2.25. That doesn't make sense.
Evaluate options that cost money to participate
In particular I'm thinking of something like GasBuddy. Saving 20¢ per gallon more because of their premier program looks awesome, right? But look at it this way – say you bought 1200 gallons of gas and it averaged $2.50 per gallon. That's $3,000 in gas for the year.
Now say that premier membership cost saved you 20 cents a gallon. That's awesome – that cuts your price to $2,760. But remember, you paid $120 for that privilege, so now you're back up to $2880. That's still $120 savings, not bad, right? But the 5% cash back if you used another card to pay would have giving you $150 for the year… so you can do just as much with another option without paying a fee. Weigh the costs.
What about a Costco membership? Are you going to save the $60 per month? For me, the Costco gas stations are just out of the way enough that I don't use them much (see the 40 cent rule mention above). We use Costco enough for other things that it makes sense, but the savings often aren't enough to justify getting a membership JUST for the gas savings.
How can you stack savings options?
I mentioned earlier that I used my Uber card (5% off) with the GetUpside bonus (which was a 10% savings on that one). How can you combine two or more tools? Gasbuddy and GetUpside recently partnered on some things. Look for ways to combine ways to save.
Don't get too distracted by trying to save.
Savings are good, don't get me wrong. But the bottom line is that gas costs are a small part of what you earn. In fact, gas is a small part of your vehicle expense overall. The thing is, if you're putting a lot of time and effort into that savings, think about what you could earn if you put that same time and effort into more deliveries.
I recently updated my vehicle. I had an older Buick, and finally settled on an older Chevy Equinox. It would have been possible to pick up a much more economical vehicle. But as much time as I spend in the vehicle, comfort was the most important thing. I'm old and I'm big, and crawling in and out of smaller vehicles is a pain. Having a more comfortable vehicle that's easier to get in and out of, and that's well suited for holding larger orders, just made more sense for me.
And on top of it, I focus on driving less (see Tip #1).
Save money. That's always good. But sometimes it's just as good to make sure you can make more money. If you can do both, that's the ideal.