The past few years have seen rapid growth in what’s known as the “gig economy”, meaning temporary or freelance work as opposed to traditional employer-employee relationships.
According to Gallup, over one-third of U.S. workers now participate in the gig economy in some capacity.
It’s no coincidence that the past few years have also seen the rise of food delivery apps such as Uber Eats, Seamless, Grubhub, DoorDash, Postmates, etc. All of these services rely on independent contractors.
You may be interested in working for one of these services yourself, as these jobs are flexible and easy to obtain. This is a great opportunity for anyone who’s looking to turn some of their free time into extra cash.
If you do decide to become a driver for a food delivery app, the following tips will help you succeed:
Save for Your Taxes
There have been some efforts, such as the recently passed Assembly Bill 5 in California, to make it more difficult for companies to classify workers as contractors instead of employees. But at this time, if you’re hired as a driver for a food delivery app you’re likely working as a freelancer.
This has a huge impact on your tax situation. You won’t have your taxes withheld from your paycheck like an employee would, so instead of getting a refund there’s a good chance that you’ll owe money to the IRS at the end of the year.
Also, in a traditional employer-employee relationship, the employer is responsible for half of the federal income taxes for social security and Medicare. The employer and employee each pay 6.2% for social security and 1.45% for Medicare. As a freelancer, the money you make is technically “business income”, which means you’ll need to pay the full 12.4% for social security and 2.9% for Medicare yourself.
You should save up so that you can pay what you owe when it’s time to file. Otherwise, you’ll be charged interest and late fees for your outstanding debt to the IRS.
Prioritize the Busiest Times of the Day
Take advantage of the fact that you can choose when you’re active on food delivery apps. The busiest times are the best times: remember, you’re getting paid per order, not by the hour. Whenever you’re waiting around for an order, you’re not making any money.
If it works for your schedule, you should prioritize all hours on the weekend (Friday – Saturday) as well as lunch hours (11am – 2pm) and dinner hours (5pm – 9pm) on weekdays.
Invest in a Food Delivery Bag
If the food delivery app you’re working for doesn’t provide you with a high-quality delivery bag, you would be wise to buy one yourself.
Like most service jobs, in food delivery you can make a lot of money through tips. And satisfied customers, of course, leave bigger tips than customers who weren’t satisfied (such customers often don’t tip at all).
Temperature is an important factor here. When someone orders a hot meal like a burger and fries, they’re not going to be happy if the food is cold when you arrive. A restaurant delivery bag ensures that you can keep food at the optimal temperature and keep the customer happy.
Whatever you pay for the bag upfront, you’ll quickly make up for in extra tips. It’s an excellent investment.