I love the freedom of being an independent contractor. I love being able to pick and choose the times I deliver for Ubereats, Grubhub, Doordash Instacart or whoever I want to deliver for.
Read enough of this site it becomes clear: I love being my own boss.
One thing however has become a problem for drivers. That problem was magnified by the pandemic:
There's no paid time off.
Or is there?
That's what people will tell you.
You don't get vacation time. There's no holiday pay. And we all know that if COVID hits you, there's no sick leave.
Doordash doesn't give you any PTO. Uber Eats isn't going to pay for your vacation time. Neither is Instacart or Postmates or Grubhub.
Know something? It's not their job.
Providing Paid Time Off or PTO is the job of the owner of your business. Neither Doordash, Uber Eats, Instacart, Grubhub fit that description.
You do.
Who's the Boss, Anyway?
That's the tag line of this site: You're the boss.
YOU ARE THE BOSS!!!
If you're not getting paid time off, whose fault is that? The Boss!
I published a post a few days ago about how important it is to understand your why in doing delivery work, and how that sense of purpose can keep us going.
Another key to longevity, especially as a full time driver, is to make it so it's not a grind. In any profession, a key to avoiding burnout is taking time away.
That's why it's your boss's job to make sure you're taken care of.
That means it's YOUR job.
Remember that you are running a business here
Why is it so important to remember you're running a business? Because the money that is coming in isn't your pay. It's your revenue.
I worked for years in a family telecom business. We would sell telephone systems for tens of thousands of dollars.
But we weren't taking home tens of thousands of dollars. We had to pay for the equipment. We had to pay for the rent for our office, for utilities, for sales taxes, all of that. If we took all that money home before taking care of all those things, we'd be in trouble.
And so even though it was a family business, we gave ourselves paychecks as employees of the business rather than just taking the money home.
Treating this like a business means treating the money that comes in like you would with a business. Those deposits from Doordash, Uber Eats, Grubhub, Instacart and others are not your pay.
It's your business's revenue. Your pay is what's left over after the important stuff that's part of your business is taken out.
Part of operating a successful and sustainable business is taking care of the employee of your business. (In other words, taking care of yourself).
Being a good boss to your employee
If you want to keep your employee around for awhile, as the boss you have to take good care of that employee. One thing about that is making sure you are giving them a break when they need it, and making sure they can afford to take that time off.
That means giving them paid time off.
I'm pretty sure you are following, but just to make sure: That means making sure you are giving YOURSELF paid time off.
How do you do that?
You give your employee paid time off.
In other words, before you pay your employee (yourself), set aside money for vacation time or sick days.
How to give yourself paid time off.
One of the best ways of taking care of your employee is to give him or her a paycheck. Here's how you do it:
1. Get a bank account for your business.
It doesn't have to be a business bank account. But get an account that's separate from your personal checking.
I recommend you find an account that will let you have multiple savings accounts. Some will use creative names like buckets. This allows you to put money aside for different things that are important.
2. Have all your pay direct deposited to that account.
If possible, deposit it in a savings account, something that doesn't have any checks or debit cards attached.
This is a good practice anyway. You're being taxed like a business. When all is said and done it's best to keep your business and personal finances separate.
I'll throw this out there: If possible, have the money deposited to a savings account. If you don't have checks or a debit card attached to the account, you cannot touch that money until you're ready for it.
Notice the “All your pay” part.
Don't do fast pay. Don't do the instant cash programs offered by these companies. The idea is to treat your money like a business. Those instant cashouts treat the money as pay.
If you want to control your money and take care of your employee, let yourself wait for the money.
3. Take care of taxes and expenses first.
Figure out how much money you need to put aside for taxes.
This is why I say get an account with multiple sub-accounts or savings buckets. Move your tax money to an account just for taxes.
Then don't touch it.
Do the same thing with money you'll need for expenses. This is what I do: I figure out how much my car actually costs to operate. Then I look at how many miles I drove the past week. I multiply the miles by that per mile cost and move that total to the checking portion of my business account.
If my car's actual cost is 30 cents a mile and I drove 800 miles, that means I'm moving $240 over to checking. The ONLY thing I use that checking account is car expenses: Gas, maintenance, insurance, etc.
4. Determine how much paid time off to give yourself.
How much do you need? How much do you want to give yourself?
This is going to vary of course based on if you're full time or if this is a side hustle. How much do you rely on the money coming in?
If this is a side gig where you're strictly setting money aside, this may not be as big a deal. But if you're relying on that income for some of your day to day living expenses, how much free time do you want to give yourself?
Are you thinking two weeks? Three weeks? Personally I've done it based on three weeks. Two for some personal time off and one for unexpected time off.
5. Calculate your Paid Time Off to set aside.
First, ask yourself how much you need to have if you took a week off of delivery. Set a dollar amount.
Multiply that times the number of weeks you'll be giving yourself time off for. That's your total PTO time off fund.
Divide the PTO time off fund by the number of weeks you'll be working. (There's 52 weeks in a year. If you take 3 weeks off, that's 49 working weeks).
Put that money in a PTO fund. Then when you give yourself time off, move that amount over to your personal checking.
Here's a calculator to help you figure out a PTO amount.
6. Now give yourself a paycheck.
Once you've set your money aside for taxes, expenses and paid time off, you can send the rest over to your personal checking account.
Is it enough? This is a great way to actually compare what you're making to take home pay from a job. It can be a great wakeup call to say wait a minute, I'm not making as much as I thought.
If it's not enough, you have some decisions to make. You could raid the money you set aside, but now you've decided not to have the money you need when you need it for your car, your taxes or your paid time off.
What kind of boss would do that to their employee?
The other alternatives are, determine if it's possible to increase revenue for your business. Or figure out that this isn't the best business model for you.
Giving yourself paid time off as a delivery contractor takes the pressure off.
Not long after I started doing full time deliveries, my wife and I took a three day weekend out of town.
I wasn't able to enjoy that time away. That's because I was stressing about the money I wasn't making. When we got home, I put in so many extra hours to make up for the lost time that I nearly burnt myself out.
That's when I started saving up for paid time off. It was amazing the difference when we took time off later, because I didn't have to worry about the fact I wasn't making money.
When you are taking time off, you simply move money from your PTO account to checking.
And then comes the ‘Rona.
This past year showed the importance of giving yourself some financial latitude like never before.
I made the decision to sit things out for a little while for safety reasons. Because of my paid time off, I could do that without worrying. It was a lifesaver.
Some of the delivery apps are offering pay if you catch the virus. But then they deactivate your account. Too many drivers have had a difficult (if not impossible) time getting reactivated.
Giving yourself paid time off lets you take control of your situation.
It helps you realize, you don't have to rely on any one of these companies. You aren't at the mercy of Doordash, Uber Eats, Postmates, Grubhub, Instacart or anyone else.
You are taking control of your finances and your situation. There's incredible freedom in that.
You can subscribe to Kover, a company that provides what they call an Income Shield. They'll pay you 80% of your lost earnings if you have an accident or are hospitalized. But, it costs money.
Or you can pay the money to yourself.
Be a good boss. Give yourself the paid time off you need.
