I know there are a lot of new drivers out there, just getting started with Instacart, Uber Eats, Doordash, Postmates, Grubhub – all wondering if there are tips for getting started.
If that's you, welcome aboard. If you've been around a bit, welcome aboard, welcome back. Welcome, welcome, welcome.
I've been doing this delivery gig with Grubhub, Doordash, Postmates, and Uber Eats for more than two years now.
It is one of the favorite ways I've ever had of making a living. I hope it is for you.
I'd love to hear what got you started. Tell me about your situation in the comments, and what do you like and dislike so far?
This whole pandemic has upended everyone's life lately.
- Maybe you were laid off or lost your job.
- You might be working from home and a little stir crazy and maybe this is one way you can still get out there legally.
- Maybe you started doing this because you needed a way to get food on the table or keep those bills paid, and you just couldn't keep waiting for the government to keep figuring out how to put the aid together.
- Or maybe you just saw that this might be interesting to try.
Whatever it is, welcome.
A lot of people are saying “hey, I just got started, or today's going to be my first day. Any tips and tricks?” And I'm thinking, how much time do you have?
Folks, I have a whole website for you!
Seriously, EntreCourier is all about the business of your delivery work. If you have some time, want to listen to some information while doing deliveries, check out the Courier MBA Series. It's episode 1 – 31 on the Deliver on Your Business Podcast. You can get a list of episodes at EntreCourier.com/MBA.
Dig around on the blog. At the bottom of the page is a whole list of categories. You can pull up articles on Doordash, Uber Eats, or on business topics.
But, if I tried to give all that advice in one fell swoop, your eyes are going to glaze over, big time. Maybe they arleady are. You and I both know you're not sticking around that long.
So I thought about this and thought of my seven best bits of advice. I'll narrow it down to seven things that I think are critically important. These are all things I can really get on a soapbox about, so I'll be careful here.
And here's where I want to enlist the help of my existing audience. Some of you, you've heard all this from me before. But I want your help – go through this and let us know if I've missed anything. What advice would YOU give to someone new that maybe I missed? Let us know in the comments.
1. Embrace the fact you are not an employee.
You are aware that you are not an employee of any of these companies, aren't you? I really hope you paid attention when you signed up.
Because here's the deal when you go through the signup process. They make a big deal of pointing out in the agreement that you're an independent contractor. A lot of people seem to miss that. But then these companies still want you to think like employees.
You ‘re not. Understand that. Embrace it.
The bad news is these platforms do not have your back like they would of an employee.
You have to make sure you understand all of this. Know it now, and you won't be disappointed later.
- You don't have any employee protections.
- You have no guarantees.
- There is no minimum wage or overtime.
- If you go out for ten hours and make ten bucks, they're not bucking up the difference.
- You have no insurance.
- There's no worker's comp – if you get hurt or in an accident, they're not pitching in. A couple of them say they have accident policies but be prepared to jump through some major hoops and likely get turned down.
You are on your own.
The reality is, you don't matter to these companies. They don't WANT you to be an employee.
The good news is, that means they're not your boss.
See, when you signed on, being an independent contractor means you're operating technically and legally as a business. NOT an employee.
That means Grubhub, Postmates, Uber Eats, InstaCart, Shipt, any of these other contractor delivery companies? They're not your boss. They cannot control your work.
YOU are your own boss here. In my book, that's a benefit that far outweighs the bad news.
Think about it this way: They aren't your employers. They are your customers.
That puts you a lot more in control of the relationship than you realize, if you grasp that control. That changes the dynamic a lot, doesn't it?
Be the boss.
2. Think in terms of profit, not paychecks
You may be kinda blown away by how much money you are getting.
But you aren't making as much as it looks.
Your earnings aren't what Grubhub, Doordash, Uber Eats, or Instacart are sending you. That's your business's revenue, not your pay.
Your pay is your PROFIT: What's left over after your costs.
It starts with understanding that your car costs you a lot more than just the gas. That thing is a credit card on wheels and every mile is pouring debt into that card. You pay that debt when you have to do maintenance and repairs. You pay it when you sell or trade it and get a lot less money because of those miles.
It's critically important that you get a good grasp of what it really costs to operate your car. Check out Episode 18 of our podcast about what your car really costs you.
There's other stuff that a normal job covers. If you get holiday pay, sick pay, vacation pay. You don't get any of that – unless you actually give it to yourself.
You should give it to yourself – I was able to take time off during this pandemic because I did that.
The bottom line is that by the time you're taking expenses, extra taxes, and other benefits, your earning power is really 1/2 or 2/3 of what the same rate of pay would be on a W2 job.
Understand all this, treat it like a business, keep your costs down.
3. Pay attention to taxes.
If you haven't been paying attention, understand this: No one is taking taxes out for you. You are on your own.
This kind of piggy backs on number 2. The reality is you have taxes whether you're an employee or a contractor.
I may dwell on this one a little longer, it's that important.
Here's why we get in trouble: We're used to income tax. We're used to deductions and not paying taxes til we've earned a certain amount. But since we don't file our social security or medicare taxes as employees, we don't pay attention to the fact those are charged on the first dollar you earn.
As contractors, those are called Self Employment Tax: 15.3% of EVERY. DOLLAR. No standard deduction or exemptions or any of that. Be ready for that.
There's a whole series of articles on taxes for when you need to get more in depth. The more you do delivery, the more you want to understand taxes.
For now you can maybe start with this article on how much to save. In the mean time, here's some important things to remember about taxes. You can also watch this video that gives a high level overview of how taxes work:
a. Your taxes are based on profit, not earnings.
This is good news. You pay based on what's left over after expenses, not on every dollar you get. The higher your expenses, the lower your profit, the lower your taxes.
b. You don't have to itemize to claim expenses.
This is a common misconception: “I can't claim expenses, I don't make enough to itemize.” You report your expenses in a different place and you can claim them even if you take the standard deduction.
c. That means you MUST track your expenses.
Unless you like paying extra taxes. You have to have a record of your expenses to claim them. You're running a business, and that means keeping records.
d. Your biggest expense is your miles.
The IRS makes it easy – instead of tracking every little cost, they let you claim a flat rate – in 2020 it's 57.5¢ per mile.
Now you can't claim gas, maintenance, registration and insurance along with those miles. It's either actual expense OR mileage.
For most drivers, claiming those miles will cut taxable income substantially.
If you bring in a thousand dollars and drive a thousand miles, you only pay tax on $425 IF you track your miles. You're literally getting paid to track your miles. You can learn more about how to track them here.
e. You HAVE to save money for taxes.
I mentioned this earlier, but go to the article in the tax guide about how much to save. You have to save that money, otherwise tax day next year is gonna hurt a little.
Track your miles, save for taxes. You absolutely have to do this.
4. Accept and reject orders as if YOU were the boss
Because you are.
Don't get into the employee of the year mindset here, don't worry about their metrics. You're not an employee.
Doordash, InstaCart, Uber Eats, Grubhub – they don't reward you for thinking like one. It's all take take where they are concerned.
People will tell you that we can't set our price with these companies. THIS is how we set our price – on what offers we take.
Think about it this way: Say you own a candy store. The candy costs you 25 cents apiece. You need to sell it for at least 50 cents to cover all your costs of running the store. A customer offers you 10 cents.
That's kind of what these low paying deliveries, especially the long distance ones, are like. When Doordash asks you to drive 7 miles for $3, that's kind of like offering 10 cents for 50 cent candy.
When you are a contractor, they cannot legally require you to accept orders. They gave up that right when they chose to use contractors. They've been sued and lost big money in the past. Don't be pressured into taking deliveries that don't make sense.
Pay attention to how far an offer is asking you to drive and where you're picking up.
Here's my best piece of advice, if you want to make it really simple:
The shorter the better.
If you can get it done really quick – I mean like 10-15 minutes, that's usually a good deal. If it's going to take a lot longer – 45 minutes to an hour, it's usually not a good deal.
I've measured. And tested. And measured and tested some more. I'm finding that the estimated time is often a better indicator of how well you'll do on a delivery than the dollar amount they offer.
You can clean up on a lot of short fast deliveries and you can get sucked in on a $15 delivery that takes forever and pulls you out of your best delivery area. Go for short and fast.
If you want more than that, I recommend these episodes:
First, episode 8 sets the stage – that your most important measurement of how you are doing is your profit per hour.
In episode 12, I talk about using the 40 cent rule to evaluate deliveries. You estimate how long a delivery will take and what it will pay. If it pays 40 cents a minute, it's a good delivery. If not, it's not worth taking EVEN if it's a $20 plus order. Profit per hour!
The bottom line is you want to get good at figuring out how long it's going to take and what it will pay. Once you get a feel for that, it's going to be a lot easier to make decisions. But the thing is, YOU get to make the decisions here. Be the boss. Set your price.
5. Check out your insurance.
Did you know you probably aren't insured while delivering?
Most personal insurance policies have language that says that if you're in an accident while delivering, they will not pay out.
Can you afford to pay for someone else's car? Can you afford to pay off the balance on your loan if your car gets totaled.
Don't take another delivery until you find out for sure that you are insured. It's too risky.
I go into more detail here about three steps you can take to make sure you are insured, but here they are in a nutshell.
- Check your policy, call your agent. Are you excluded if delivering or using your car for commercial purposes? Most likely you are but there are exceptions. Find out!
- If you are excluded, can you add a rider or endorsement? Find out – if so it's usually not much extra.
- If there is no coverage and no option to add it, you have to either change insurance or quit delivering. Do NOT deliver while uninsured.
- You can get quotes for commercial insurance here (affiliate link)
- Find an independent agent and let them help you find a policy that fits.
- I'd say try both, it's always good to have a lot of options.
I just went through this process recently. When Geico Commercial jacked up my premium, I decided to follow my own advice. You can read what I did here.
6. Don't rely on just one customer.
Remember, Grubhub isn't your boss. Doordash isn't your employer. They're your customers.
It's almost always bad business to rely on just one customer.
Have you been through an app crash on Doordash? If you've delivered much, you probably have. Have you been out there when these apps had too many couriers for how many orders there were? It's happening a lot lately.
If you have alternatives, you can keep earning money when your go-to is slow or dead in the water. I've actually found that my average earning for all the platforms is nearly the same – but I'm highly selective on what I take.
Get signed up on other platforms.
Uber Eats is a great platform for a secondary source because you can easily log in and out at will. You can sign up with them here.
Doordash can be a steady source of income with some great bonuses during busy times. You can sign up with them here.
These are referral links – sometimes the links will have bonuses for you when you sign up, sometimes I'll get a referral fee. As I write this, neither company is paying out anything but that can change.
Get to know how the different platforms work. As you get more comfortable, you may incorporate multi-apping – working more than one platform at the same time (Episode 14). You have to be careful with it, but when done right it can increase your earnings without slowing down your deliveries.
7. Think like a business owner.
I know this seems to circle back to number 1. Number one is to understand you're a business owner, now you want to think like one.
Don't think like an employee.
When you become a business owner, you take control. You become accountable. None of these platforms owe you anything. You have no guarantee. If you fail, you can only blame y ourself.
That doesn't sound so great. But you know? It's amazing how freeing it is.
Because you're not at anyone's mercy. You can't be the victim. It's impossible to be exploited when you're taking control.
You see the good and bad these companies do, and YOU make your choices. You are the ones making YOUR business decisions, not them. And you treat these companies like your customers, not your bosses.
There are responsibilities when you have customers. You can't just do whatever you want. Some people don't get that.
But you can be proactive. I wear a uniform, I approach this as a professional. I think it makes a huge difference with restaurants AND the people I deliver to. There's tremendous power in taking control for yourself.
I mentioned the MBA series before – if you have the time, go back to episode 1 and listen to the first 31 episodes or read the posts that are associated. Master your Business Attitude.
Rolling these seven tips into one:
Be the boss.
Part of taking control is being responsible. You're setting money aside for your car. You're keeping track of expenses and miles and setting aside your tax money.
And you are making business decisions. You are running this as a business.
If you take that attitude, if you take control, I think you'll find yourself doing far better and feeling far better than if you take an employee mindset into this thing.
These companies will do things like cut delivery fees. You know what? They cut my fees, I made more money. Uber Eats did that recently and now I'm making more with them than ever.
It's because I took control rather than playing the victim.
Adapt, adjust. Take your business into your own hands.
Maybe you're only planning to do this a few weeks. Maybe this has been a pleasant surprise, and you might keep up the delivery gig for awhile. I know there are always people starting to think, maybe this could work full time.
But if you want to really make this work, the key to your success is take control. That's what the EntreCourier is about, to provide information and encouragement to help you think like a business owner. But it's up to you.
Be the boss.
- Embrace being an independent contractor. That means you're not an employee.
- Think profits, not paychecks. You will have expenses. Understand that what you REALLY earn is what's left over after those expenses.
- Pay attention to taxes. They won't go away if you ignore them. As an independent contractor no one holds your tax money out. It's up to you.
- Accept and reject delivery as if YOU were the boss. Because you are. Delivery companies cannot force you to accept offers that are not profitable.
- Make sure your insurance will cover you on delivery. Chances are they won't. If they don't, get someone who will. Or stop delivering.
- Have multiple customers. Grubhub, Doordash, Instacart - THOSE are your customers. Don't rely on just one source of income.
- Think like a business owner. You are one. Embrace it. Think like it. Act like it.
You can check out the first 31 episodes in the Deliver on Your Business podcast to get a better feel for what you're getting yourself into. Those episodes make up a series called the Courier MBA.
MBA stands for Master your Business Attitude.
Independent contractor means you're technically running a business. The best way to avoid being taken advantage of is to embrace that role, think and act like a business owner.