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Side car: Can a driving gig augment your core business?

CNET@Work: More and more small business owners are finding the for-hire driver economy is a convenient way to supplement their incomes. Is this the right route for you?

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With technology increasingly intertwined with all aspects of business, CNET@Work can help you -- from prosumers to small businesses with fewer than five employees -- get started.


"I've met all kinds of people, and I've driven at virtually every time of day," said Dori MGuire, a Seattle-based Uber driver who also drives and delivers orders for a local Seattle pizzeria. McGuire was a math teacher with minimal job security, as she constantly faced annual renewals on her teaching contracts. Four years ago, she opted for personal freedom and began a career as a full-time "for hire" driver.

"The decision gave me greater personal autonomy, and the ability to set my own work hours and also the amount of time I wanted to work," said McGuire.

McGuire has joined the growing number of people who've signed on to the new freelance driver economy -- an economy that enables them to run their own driving businesses for ride-hailing companies such as Uber, Lyft, pharmaceutical and auto parts delivery services, and other local businesses in need of delivery services.

Many small business and startup business owners use the for-hire driver gig economy to augment their incomes when business is slow.

"I do most of my driving for Uber during the summer season, when students are away on vacations and aren't taking lessons," said Charley Wyser, a MInneapolis-based music teacher who drives part-time for Uber.

Just how viable is it to engage in hired driving as a full-time business, or as a way to supplement your income while you are building your own business?

"Freelance for-hire driving is very easy work to get into," said Mark Oakes, a professional musician based in Seattle, who drives part-time for the food delivery service PostMates to augment his teaching and performing income. "There are almost no requirements for driving, and it's easy money. All you need is a car and a valid drivers license."

Weighing the pros and cons

As in any business undertaking, there are upsides and downsides.

Oakes, who started out delivering medicines for a pharmaceutical company, soon discovered that some companies are simply abusive to their drivers.

"I often drove routes that were over 50 miles each way, through peak traffic," said Oakes. "Sometimes, the company would ask me to carry restricted medicines like narcotics and opioids to nursing homes and there were people out there who knew the route and were watching as every delivery occurred. It was dangerous. Once, the company asked me if I would deliver radioactive materials, and I refused. I also had trouble getting paid what was owed me."

The gig created a lot of stress, so Oakes switched to driving for PostMates, which he said paid promptly, offered a well-designed computer interface for its app, and business processes that were easy to use. "Moving to PostMates was a great fit," he said. He lived in an upscale neighborhood where many residents are employed by high-tech firms like Google and Amazon. With work occupying most of their time, these residents were ready to order out -- and get food delivered -- at the end of the day.

"This is working well for me," said Oakes. "I can choose when I want to work, it's convenient, and it doesn't interfere with my business."

Tracking your real expenses

Critical to making for-hire driving profitable are controlling and tracking your expenses.

Muddy wheel

Putting a lot of miles on your car increases your maintenance costs.

Getty Images/iStockphoto

McGuire, Oakes and Wyser all reported that none of their for-hire driving employers pay for gas, insurance, or the wear and tear on their vehicles.

"Since you don't get reimbursed for gas, you have to think about this because you're driving all these miles every day," said McGuire. "Also, you're putting a lot of miles on your car. This increases the odds of your needing to do an expensive repair."

Charley Wyser agreed. "One time I had an Uber fare in Minneapolis. I picked up the rider, and one of the disadvantages of driving for Uber or Lyft is that you never know where the driver you're picking wants to go. In this case, the guy wanted me to drive him all the way across the border and into a small town in Wisconsin. The ride was over an hour each way, but I couldn't get a rider on the way back. I lost time and money -- and the wear and tear on my car just piled up."

"The best deal is to find someone who will give you a base hourly wage to which you can add your driving fees and tips," said McGuire, who found such a situation in driving for a pizzeria. "This helps offset the expenses that you accrue from driving."

Protecting yourself from liability

The other areas that drivers must consider are insurance and liability.

"I was being asked to transport all of these narcotics and even radioactive materials, yet the pharmaceutical supplier that was contracting with me refused to cover any of the risks or the liabilities," said Oakes. "Instead, the company made me sign a very long contract that was difficult to read, and that delegated all responsibility for liabilities to me personally, so I was assuming the risk. I just didn't want to do it."

Most hiring companies require drivers to carry liability insurance.

"Some drivers I know have asked their personal vehicle insurers if they insure for liability when you are using you car for hire. In some cases, the insurers say that they do -- but there are also insurers that say that they don't," said McGuire.

Is for-hire driving a viable way to make a living?

"When you're starting your own business, or if you have your own business and business is in a slow period, the flexibility and the ready availability of the extra cash can help," said Wyser. "I have the ability to drive whenever I want to. When I don't want to drive, I simply shut off the application. This gives me maximum flexibility to run my business and to augment it financially when I need to."

"You learn the ropes, and which driving gigs are the most lucrative to accept, as well as the ones that are likely to lose you time and money," said Oakes, "You can pick and choose, which gives you some ability to manage your work. But the goal is always to focus on your own business so you can reach a point where you don't have to worry about augmenting it with other part-time work."

Words of wisdom

If you're one of the hundreds of thousands of drivers who drive for Uber or other ride-hailing and delivery companies, and you're doing this while running your own small business, what are some best practices?

Manage your time wisely by carefully choosing your driving gigs

"You can make fast money if you're delivering takeout food from local restaurants to local residents in your area, but if you take on a longer gig, like grocery shopping for someone, you don't get paid for all of the time you spend in the store finding the items that the customer wants," said Oakes. "Avoid these shopping gigs because this is time you're not getting compensated for."

Car crash accident

Not every insurance company will cover for-hire driving.

Minko Chernev/Getty Images

Use an older car

"I know of one person who invested in a new car and started driving," said McGuire. "You want to avoid this, because you'll never make back your investment. Most for-hire driver services require that you use a car that is less than 10 years old, because they don't want breakdowns to occur while you're driving for them. But if you invest in a new car to do this kind of work, you're going to rack up the miles quickly. It's best to use a reliable car that is several years old if you want to get the most out of your vehicle investment."

Stay away from perilous driving gigs

"I don't drive much at night, because that's when you can get someone who might be argumentative, or who has had too much to drink and will throw up in your car," said Wyser. "This happened to me once: Uber paid for the car detail to clean up the car, but the problem was more persistent than that, and this was left to me."

Manage your insurance and liability risk

Not every insurance company will cover for-hire driving, so many for-hire drivers choose to remain mum on the subject and not go to their insurance companies. One way to broach the subject of insurance and liability is to talk it over with other drivers to see which insurance companies are covering for-hire driving. You might also consider a separate liability policy for for-hire driving, which most insurers offer

Work for an ethical employer

Many companies are jumping on the for-hire driver bandwagon, hiring freelance drivers to deliver passengers, pizzas, car parts, medical supplies and more. Choose your employers carefully. The best way to determine companies that are fair and ethical to drive for? Ask other drivers.

Don't let the job get in the way of your business goals

If you're a small business owner and are only driving to support your income when business is slow, don't let the temporary driving gigs become such a dominant force that you forget to strategize and grow your own business. Taking a temporary driving job should be just that: temporary. The ultimate goal is to develop you own business so you can say goodbye to the driving, unless you really enjoy it.