If you’re retired and struggling to make ends meet, you’re not alone. For most of us, job prospects aren’t too bright. The most you can hope for is a minimum wage job as a receptionist at Walmart. What is the worst thing about this job? Standing for hours and hours for minimum wage.
There is a relatively new industry that you can do in your spare time. Work as many or as few hours as you like. Work when you want and don’t work when you don’t want to.
It’s called RideShare.
You’ve probably heard of Uber. That’s the best known of ride sharing companies. A major competitor is Lyft. I have been working for Lyft for the last 6 months and have had great results. Here is my story.
I was laid off last year after being a sales manager for a medium-sized furniture store for 9 years. I was 60 years old at the time. My boss had promised me that he would never let me go, but as with most things, it was an empty promise. As retail declined, so did his profits and he could no longer pay me.
I thought I would have no problem getting a job. She had a stellar resume. Unfortunately, the number of companies looking to hire older employees is small. Personally, I don’t blame them. My first administrative job was when I was 30 years old. I wasn’t interested in hiring people who were old enough to be my father. The employees I inherited that were already that age were a headache to work with.
How did I discover Lyft?
My transportation was a 20 year old van. When I was young, I spent money on Corvettes, Porsches, and Mercedes. As I got older, I realized that luxury cars were expensive. A reliable vehicle that pays for itself makes much more sense.
One day it broke down and he had to go to the store for the weekend. I rented a car and needed a ride home after returning it. I decided to try Lyft. I asked the driver, as many people do, if he liked working for Lyft. His response surprised me.
“I’m not even from California. I live in Florida and take a train here to spend the winter with my sister. I call Lyft. They give me a job and they rent me a car. I can make up to $1,000 a week driving for Lyft.”
It was shortly after that conversation that I lost my job. I decided to try Lyft. I applied around 9:00 pm on a Saturday night. I knew my driving record was stellar and it wouldn’t be a problem. I have never had a traffic ticket in over 45 years of driving. The problem would be my 20 year old truck. Lyft requires a 4-door vehicle less than 10 years old. Here’s everything you need to get started.
First, you will need a smartphone like an iPhone. You apply for the job from their app, which you can download from the app store. It’s called “Lyft Driver”. After downloading the app, you will need to fill in some basic information like your name, address, etc. They ask for your work card. You have the option of using your social security number or an Employer Identification Number (EIN). I have owned several small businesses and have a Limited Liability Company for another business I run. Since this will be a business, I used my EIN. Now all of my income will go through the LLC, giving me additional tax breaks and liability protection. More on this later.
Lyft will ask you to take a photo of your driver’s license with your camera. That’s why I recommend using a smartphone. It makes it easier because you can take a photo of your driver’s license right from the app. In a couple of seconds you will be approved as a driver. If you have a DUI or a felony in the last 7 years, you will be denied.
Once you are approved to drive, you will be asked if you want to use your own car or rent one. Since I only had a 20 year old van, I inquired about the rental. They asked me for a deposit of $250 on a credit card that would be returned to me when I returned the car. I pressed the button and they told me to pick up their new car on Tuesday.
I live in San Diego. The rental car is through Hertz. They charge $208 a week, but that includes all the insurance you need. If you handle 75 jobs in a week they give you a $50 discount. If you handle 100 jobs in a week, they give you a $150 discount. Your cost to rent a new car is only $58 per week. Since the car is insured, you can use it for your personal use when you’re not driving for Lyft. Let me tell you that 100 units in a week can be a challenge. Average 10-15 per day. At the same time, if you generate 100 jobs in a week, you are probably making between $800 and $1000 per week.
They offered me a Toyota Corolla, a Kia Forte or a Chevy Cruze. I take a new Kia Forte. The other 2 cars had stains on the seat. I’ve always been curious about Kias. Nice car. It got about 23 miles per gallon. Gas is a big expense in this business. The day after I rented the car, someone stole my 20 year old truck. The police told me not to buy anything new for 30 to 60 days, since that’s how long it usually takes to recover a stolen vehicle. Looks like I’ll be driving for Lyft for a while!
The system is quite easy to use. You will need a dash mount for your iPhone (or Android phone). You turn on the application and wait for it to notify you of a trip. Once you accept the trip, the screen will change to a Google Maps page and literally tell you the directions. You will be able to see your progress as you move down the lane. The map shows you all the streets so it’s easy to know where you’re going.
After a few weeks, I decided my truck wasn’t coming back and bought a used 2010 Ford Fusion Hybrid on Craigslist for about $5,000. It gets 38 miles per gallon. This type of car is not preferred by millennials because it looks like an old man’s car. If you search for this model on Craigslist or Autotrader, you will probably find one that was owned by seniors and in mint condition. It is a very comfortable car to drive and customers also comment on how smooth and comfortable it is for them. Try to get one with a backup camera. After using a backup camera, I will never buy a car that doesn’t have one.
I currently drive about 8 hours a day and make $100-$150 a day. That works out to $700-$1000/week. I don’t have to drive much, but I like it. I’m single and I have nothing else to do. Because I was raised with a good work ethic, it’s hard for me to sit at home doing nothing when I could be making money.
It works better than I could have imagined.
I’ve owned several businesses, so calculating expenses is pretty straightforward. The IRS allows you to spend your actual costs like gas, tires, etc. or you can take 54.5 cents per mile. A big loss for the business is the depreciation of the vehicle. The 54 cents per mile standard deduction is not only easier, it gives you a higher payback. Record your miles.
The biggest mistake drivers make is that they only write off miles from an actual trip. The IRS allows you to cancel all business miles. If you work for someone else in an office or store, you can’t cancel your commute, but if you have a business, you can cancel driving to UPS or driving to meet customers. Real estate agents write off all the miles they drive showing people houses. They also cancel all the miles they drive looking for houses to show their clients. With Rideshare, you should be able to cancel all miles from when you turn on the app until the end of your last ride. I record my mileage when I get in the car at home and usually sit in my driveway until I get a ride request. I log my final mileage when I get home at night. You don’t need anything fancy, a pocket notebook works well.
Some people park, others drive. If you just finished a trip that took you to a remote area of the city, you may need to drive to an area where people request rides more often. Check with your tax advisor, but all driving to find trips should be tax deductible. Due to the fact that you are writing off a lot of miles, it will appear that you are not very profitable. This is good because it means you won’t have to pay much, if any, in taxes. This is what I mean.
So let’s say you drive 200 miles in one day and earn $150 in fares and tips. If you cancel 200 miles x 0.545 cents/mile, your tax cancellation is $109. That leaves $41 in profit. At $41/day, you’re reporting only $205/week in earnings if you work 5 days a week. That works out to about $900/month in earnings or about $11,000/year. That sounds like poverty level income. If this is your only source of income, you will not have to pay any income tax. I’m not an accountant, so please don’t take this as tax advice. Check with your tax collector before claiming this deduction.
Now let’s look at it from a different angle, cash flow.
If you are earning $48,000/year at a regular job, you are receiving a gross salary of about $4000/month. After taxes, you get about $3000/month in take home pay. This is estimating your taxes at 25% of your income.
If you make $150/night with Lyft, you take home $3,000/month.
Overall, Ride Share provides me with a pretty good cash flow. I work when I want. If I don’t feel like starting work until 1:00 p.m. or leaving at 8:00 p.m., I can. No one tells me what to do or when. I recommend you start with your station wagon or rent a car through Lyft to see how you like it. Once you decide to drive regularly, try to find a hybrid car, so your actual expenses are lower. I also recommend that you don’t drive around looking for wrinkles. Once you figure out where the best areas are, drive there, park and wait.
Some drivers give out water, mints, gum, etc. to try to get tips. Personally, I don’t go to those extremes. I make sure my car is very clean and smelling fresh. I try to strike up a conversation with the passengers if they seem to want to talk. My car has Sirius XM satellite radio so I can easily find the music of my choice. I average around 10% tips overall. Not all customers tip, but at the end of the week, if I made $750, I probably made $75 in tips.
Drivers come and go, so rideshare companies are constantly looking for drivers. They pay signup bonuses of up to $750 depending on how many drivers they need. There is a special code for seniors to get the highest registration bonus: RETIRE2020. This ensures you get the highest bonus available at the time of request. It works in all cities, but it only works for Lyft.
I highly recommend looking at Ride Share if you’re looking to make a little extra money. It’s easy and fun. It is very safe because you do not carry cash or ask customers for money. Everything is done with credit cards through the application. I think customers behave better because Ride Share knows their identity and credit card numbers.
The worst thing that’s ever happened to me is that a drunk customer got car sick. If this happens to you, be sure to take photos of the accident. Upload them to LYFT from your phone and LYFT charges the customer up to $200. You get $150 of that to clean your car. I’m not sure if $150 is a fair amount to clean up someone’s vomit, but it’s a lot of money. I spent about $20 to buy air fresheners and paper towels. Within a couple of days the smell was gone and people were commenting on how good my car smelled.
That’s my Lyft review. My job at Lyft gives me cash flow like a $48,000 a year job and I can set my own hours and I don’t have a boss telling me what to do. If I want to take a couple of weeks off to go on vacation, I can. I don’t even have to ask permission. What could be better than that?