My $147.82 Lyft Pickup
When you are on fire to improve your financial life, you will do things that your friends think are insane. You may even start to question your own sanity
-Peerless Money Mentor
Last night at 9:40 PM I was hanging out at the gas station down the street from the Baton Rouge Metropolitan Airport, waiting on the next flight to land when I received a ping from my Lyft Driver App. This was no ordinary ping; it had a notification bar saying it was a 45 + min trip!
“I am going to Sulphur, La. Do you all charge extra for making extra stops? I need to stop by my storage unit to pick up my tools for work”
I accepted the ride request and immediately called the rider to see where he was trying to go. His response to my question was, “I am going to Sulphur, La. Do you all charge extra for making additional stops? I need to stop by my storage unit to pick up my tools for work.” I thought it over for a nanosecond and here are some things that went through my mind:
- I have to go to my main job at 9:00 AM in the morning
- Is the person really going to Sulphur? I have heard stories of people requesting long distance rides and people cancelling when they driver shows up
- This will be a 4 hour trip, maybe even longer
- I only have half a tank of gas in my car
- I have to go to my main job at 9:00 AM in the morning
After pausing to take these thoughts into consideration, I told him, “Yes, I gotcha. I will be there in ten minutes. And Don’t worry about the storage unit stop! I hung hung the phone up and proceeded to make my way to his house. When I arrived, he told me. “I missed the greyhound bus and need to get to work at this plant in Sulphur. Man, you are really a life saver. I just got this job and I ain’t trying to miss any days.” I told him I was happy to help and I would get him to his destination safely. We stopped by his storage unit a mile away so he could get his tools. Afterwards, we went to the gas station so I could fill up my tank up ($21 dollars and get snacks for the road. He requested I play Yo Gotti’s new album I Still Am and we hit the road to Sulphur, La!
It was a very long ride but he kept me woke with his stories about college life and the recent adversities he has overcome. My overall impression of him was he is just a man trying to work hard and provide for his family and this job was paramount to him being able to do that! We eventually arrived at his destination and he thanked me again for the ride and slid me a $10 bill as a tip, which increased my earnings to $147.82. His total cost was $193.76, including the $10 tip. Lyft’s cut of the fare was $45.94 or 25%. The question you are probably dying to ask me right now is, “What was your net profit?” Well, let’s explore my Lyft net profit spreadsheet together!
Net Profits of Ride to Sulphur, La from Baton Rouge, La
Net Profit = Driver earnings (Driver’s Cut of Fare + Tip)-Expenses
From the information already given, you already know that the money I received was $147.82 but what are my expenses?
If you were paying attention, you would know that my expenses equal $21 for gas. So let’s plug the numbers in!
147.82-21=126.82
Doing this calculation we get a net profit of $126.82 but wait! We forgot about taxes! Let’s see how taxes affect the net profits of this ride.
Taxes
“‘In this world nothing can be said to be certain, except death and taxes.”
-Benjamin Franklin
After entering in the data in my spreadsheet, I got negative values in the tax column so I am not 100% sure this is correct. I will try reaching out to the Rideshare Guy to fact check this! In this scenario, we get a net profit of $131.774 after factoring in the standard mileage deduction self-employed workers get. I’ll go more in depth about how taxes affect your side hustle earnings in a future post. And I will update this post once I get some clarification on the tax implications from a tax professional or The Rideshare Guy.
*Update* I reached out to The Rideshare Guy to get his advice on Rideshare Taxes and his response is below!*
According to Harry, tax experts recommend that I set aside 20-30% of my rideshare income to pay taxes. Not only that, but since I make over $1000 per quarter, I need to pay my estimated quarterly taxes. I started driving for Uber on Thursday, August 31st, 2017 so I need to pay my estimated quarterly taxes by Monday, January 18th, 2017.
For a more in depth look on how taxes affect your earnings, please visit the link Harry provided below.
What is the craziest thing you have ever done on your quest to achieve financial independence?
Comment Below!
Author: Jerry
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The tax deduction is wrong. It’s .535 per mile, NOT per gallon of gas. Hope this information helps.
Thanks, I will correct that. I meant to put per mile.
Good for you for getting on that side hustle! Out of curiosity, how much did that guy make if he was willing to pay $200 for a ride to work?
Thanks for dropping by, Olivia! He told me he was making $30 an hour.
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