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What should I know about working for a rideshare service?
If you own a vehicle, working for a rideshare service, like Uber or Lyft, can be an easy way to earn an income with flexible hours.
Make sure to carefully evaluate the costs and work conditions to see if it is a good option for you.
Rideshare services are a popular form of self-employment. Requirements include an Ontario driver’s license, an eligible vehicle, vehicle insurance and a background check. Other than good driving skills, a specific professional background isn’t required.
Benefits of Being a Driver
Rideshare services generally allow you to choose the hours you work. This can be useful if you are also working another job, have family commitments or need to earn some extra money. If you want, you can choose to only drive on the weekends or late at night for a few hours.
Costs of Being a Driver
Driving for a rideshare service means that you are responsible for the costs of buying a vehicle and paying for insurance, maintenance, repairs and gas. Make sure to calculate these costs against the income you would make to get a clear picture of your earnings.
You will also need to pay income tax on your earnings when you file your taxes each year. However, you can deduct some business expenses, such as the costs of vehicle maintenance.
Generally, rideshare drivers are considered to be contractors, not employees. This means that you are considered to be self-employed and are not covered by the Employment Standards Act (ESA).
As someone who is self-employed, you will not pay for Employment Insurance (EI) and the hours that you work will not count towards your EI eligibility requirements.
It is also important to keep in mind that rules about this industry often change. For example, some cities have decided to prohibit rideshare services. Because of these frequent changes, rideshare driving provides less financial security than some other jobs. You may want to consider balancing this work with another source of income.
Driving strangers in your vehicle is a safety risk and as a contractor you may not be covered by Ontario’s health and safety laws. If you don’t feel safe driving at night, only do so during the day and don’t accept rides from people who make you uncomfortable.
- Evaluate whether self-employment is best for you and your family. You may want to balance rideshare driving with a part-time or full-time job.
- Don’t make a big investment, such as buying a car, until you are sure that this type of employment is right for you and you are comfortable with the risks.
- Make sure to calculate your earnings carefully, keeping in mind expenses such as vehicle maintenance, income tax and the loss of possible EI income.
- If you do become a driver, document your hours, trips and expenses carefully. Keep all receipts and driving logs. This will make it easier for you to file your taxes.
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May 19, 2017