Author Topic: Food delivery as a side hustle?  (Read 1440 times)

caracarn

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Food delivery as a side hustle?
« on: February 26, 2020, 09:56:49 AM »
I have been thinking about giving services like Postmates, DoorDash and GrubHub a try to earn a few hundred extra dollars a month in the evenings and perhaps weekends.  Anybody tried this and willing to share their thoughts?   Anyone else thinking about it?  I like the fact that unlike Lyft or Uber you do not have the insurance issues and others in your car and all the inconvenience/problems that can entail. 

caracarn

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Re: Food delivery as a side hustle?
« Reply #1 on: February 28, 2020, 09:50:00 AM »
So $97 in 6.7 hours of work over the last two days, which works out to $14.41/hour.  Better than I can make with other "no experience necessary" jobs that might be plentiful.  I did a couple of the deliveries to and from work and with the added value of how being able to report mileage, including driver to first delivery and home for last delivery might have found a way to turn my office commute into a tax savings.   

jamesbond007

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Re: Food delivery as a side hustle?
« Reply #2 on: February 28, 2020, 10:26:16 AM »
Very interesting. I have been thinking about this for some time. Did you use DoorDash? Did you have an option to choose which orders you pick up? What's the are coverage radius? Can you set your location boundaries or does the app decide?

caracarn

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Re: Food delivery as a side hustle?
« Reply #3 on: February 28, 2020, 12:09:55 PM »
So much learning I can share in just two days.  Will make sure to include your questions and can give a lot more detail if anyone wants.  Also at this point I have built a spreadsheet that calculates my hourly rate for each "shift" but also overall and will use that to compare the three services once I can operate in all of them so i can determine which is the most lucrative.

So the basics:
  • Yes, I am currently doing DoorDash, as they are the only one that lets you get started without waiting for stuff to arrive or for you to go through some sort of training.
     As soon as I can delve into Postmates and GrubHub, I will.
  • You do get to accept and offer, decline, or if you do not respond in a period of time (in my area it is 45 seconds, but I saw in the help in some places it is 90) it goes to someone else.  The issue is one metric is your acceptance rate and it can be a problem as I will explain later.
  • I an not sure what you mean on coverage radius
  • The area is divided into service areas.  You select the service area you work in, but that also is a bit ephemeral as I will explain.
  • A delivery may make you change service areas.  This is pretty common in my short experience.  So I would pick up in one zone but deliver in another, suddenly finding my next order outside of the zone I though I was in. This creates a lot of dynamics to consider.  I am a middle aged white male, and many of my deliveries or pickups were in some areas that a college aged female might not be comfortable in.  In fact some of them, I was not comfortable in.  I have not operated past 9 PM, but as my wife said when I shared this might be a good option for our 20 year old daughter who is struggling to find money for her car repairs, so said she'd not be comfortable with her in some of the locations I ended up in.  You can mitigate that by being very careful what you select, but that has adverse impacts of metrics that DoorDash measures you on which you will learn about below.  It also can change you peak pay and therefore earning level substantially, again more details on how that works below.
  • App is actually quite well designed and easy to use, but you do need a solid level of organization.  I actually ended up not delivering a drink with an order because I got things mixed up.  So far, not a problem, but this may come back to haunt me.
  • Can contact customer via text or phone and this is done through a masking interface that does not expose the actual phone to you or them so not privacy dangers I can see there
  • DoorDash offers something called Peak Pay which can be worked, and as a Mustachian this is actually very intersting to me as it plays right to our optimization love.   My earnings are certainly juiced because of deliberate choices I made to learn to play the game to the best advantage I could.
  • You can get alerts when not working.  So for example I currently have left these on, and it will notify me when peak pay is available in areas I have scheduled in.  Just got an alert over my lunch hour as I write this that I can get $2 peak pay right now if I head out and deliver.
  • You can schedule a "dash" (think of this as a shift you work) in the future.  So for example I have scheduled 5:30 - 7:30 AM Saturday morning in one service area and 6 - 7 AM Sunday morning in the service area I live in.  Scheduling gives you priority for orders when you do a dash (though not sure that helps as I have yet to work a schedule and I have not had much trouble getting orders, but if there is zero break between them then it might do it, but I cannot talk about this with personal evidence until after this weekend).  Schedules are not available whenever, each service area only had a certain amount and if can differ and can change.  So for example the Sunday morning schedule is the only time available all Sunday in my service area, but other service areas can have 6-12 time blocks.  Soem blocks are large (I have seen 4PM - 1AM (next day)) or as small as 30 minutes.  For example the zone I am working Saturday morning has 4 - 4:30 AM before the one I choose, and then 11 AM - 12PM next, plus many others.
  • The did a great job of what would be known as "gamefication" which appeals to the game player in me.  Each delivery seems like a quest does in the games we play.
     When I complete that quest, I am served up another.  Also the peak pay draws "players" to an area to mazimize their earnings.  Peak Pay for a single order for me last night was $9, meaning I got a $9 add-on to the standard rate of the order so it boosted that delivery to $13.50,  This is what I refer to about optimizing the process.  At times I drive to the next service area over if it has peak pay and the one I am in does not.  So you are doing cost/benefit mental math all the time, which can be fun for some or irritating for others.  I think Mustachians will find this appealing, because it falls right in line with our optimization strategies.  How can we maximize the benefit we are getting?
  • The earning rate is low enough that it appears the taxable income on any of these endeavors will be very, very low.  For example on my $97 of earnings, I have $93.13 in mileage (162 miles), so my taxable income is less than $4 right now.  This can once again be Mustachian maximized.  I did a dash (shift) last night from 5 - 8 and did it from work.  My first pick up was less than a mile away, and because I was working at my delivery business, my drive home after my shift can be included in those miles, so even though I was 30 miles from home, effectively going by my office on the way home, my trip home was tax deductible, so if you can work in a pickup each way (what I did both ways that day, delivering in the morning on the way in and after work before heading home) you are suddenly turning in the miles you drive to a from your job into something that benefits you rather than just costs you.  Might be worth MMM taking a peak at this method as perhaps a way to lower the cost of clown car ownership.
  • There were times I was driving around for 10 minutes without an order, so it is not perfect.  Again, will see if I notice any difference with a schedule.
  • I did have one order last night at a Chipotle where I truly waited 40 minutes for them to make the order.  My entire time for that delivery was 1 hour and 3 minutes, which  made my earning $9.52/hour, so very poor with what I had seen.  My best dash so far was $19.50/hour.  So you do need to learn the local area, much like a cabbie.  There were 20+ drivers waiting for orders when I walked in and the place was very, very slow.  Some drivers cancelled their orders (something all services penalize you for up to and including banishment from the system) and went on.  It was my last order of the night so I choose to stick with it.
  • That led to another flaw in the process.  While I was stuck waiting for said burrito order, the app sent me 3-4 other orders that were nearby (the app will help you maximize.  Next point below for more).  I intentionally did not hit Decline as I did not want to impact my acceptance rate and I let them time out.  However, it appears that did not help, because my acceptance rate is now 78%, down from the 100% I had until then.  So this means you really have to be careful thinking you can choose which orders you pick up because it does seem there is no way to not get dinged for not accepting an order.  According to the site, this metric getting too low can accept you ability to get orders (I assume the algorithm will prioritize drivers with a higher acceptance rating to get the order first and on a busy night that can mean a long time between an order coming your way).   In my area, as others, there are some places where I would not feel safe driving into, especially late at night, so you can decline orders to avoid that with the mentioned consequences.
  • On my morning run it, I received one order and in seconds got another offer asking if I wanted to add it to my route.  It was at the same IHOP so I did that, and that was the one where I hit the $19.50/hour as I was not making two pickups and two deliveries, but one pickup and two deliveries so it took less time.  This was a nice feature, but it has a dark side as noted above.
  • All of this resulted in me working longer than I intended.  Some of the reasons were positive (I was having fun, the game feeling of "I'll just do one more!", etc.) but they can be negative (now that I know my acceptance rate was hammered I might have accepted those additional orders while stuck at Chipotle and added 30-60 minutes to my night just to avoid a bad outcome). 
  • At this point, with the very small sample size, it appears that 30 minutes for an order is about what things are working out to.  So I can plan for 2 orders an hour.  This should factor heavily into your decision on if this works for you or not.  While my local service area (the one I live in and would prefer to work in for convenience) does not have much or high peak pay, I have 3 others within 10-20 miles away that regularly seem to have a level ranging from $3-$9.  Since the base rate is $3-$5 for a delivery, working all your dashes in non-peak pay times or areas can easily cut your earnings in half or more.  On my 11 deliveries, 8 had a peak pay booster which totaled $36 on top of my $45 base pay.  Adding in $16 of tips from 4 of those orders means that over 50% of my pay was tips or peak pay.  It is also crucial to note that it does not appear that tips are popular.  The service does say customers can add them later or at the time of the order.  0 customers added a tip later.  All 4 of the tips were in the initial order.  You will get an alert if a customer adds a tip later. 
  • The threshold for retention is pretty hard to reach.  If you have more than 1 delivery issue reported by a customer in your last 100 orders your account can be deactivated so you need to maintain a 99% rating there to avoid a problem.  Also your customer rating needs to be 4.2 out of 5 to avoid the same potential for review.
     The system does not share how many reviews you have just your score.  At this point my only rating is a 1, likely from the customer who I forgot to deliver the drink to.
     Or... I suppose I could have had more ratings all of which are a 1, but no way to tell.  I assume it is the former because I had no rating until that happened on my 6th delivery and the number has not changed since then, even though I think I have upped my customer service game as I learned to operate the customer contact interface on my second day.  This allowed me, for example, to keep the person with the terrible Chipotle order updated as I waited for 40 minutes and they knew what was happening, or that likely would have been another terrible rating.  Perhaps it was, there is no way to tell.  At this time I have not been norified that I am under review because of my rating and perhaps, like in many organizations, those metrics are there to offer a way to remove problem children, but that unless it gets really bad drivers escape notice.  I'm hoping they at least will give me a chance to get to 100 or more deliveries before they even look at that.  The sad reality is that people do not take time to provide ratings very often unless they are mad, and since I did not know how to contact customers on that first day, I could not even have apologized, though once you complete the order the ability to contact them is gone and I did not notice the oversight until I was delivering my second order and realized the drink went with the first one I had done.  So this one hangs over me already like a sad spectre over my shoulder.  The published quality metrics are something I have already failed at just 6 deliveries in and will work to make up, but my hope lies in not being noticed, so in this way it works like many minimum wage or other jobs.
So overall, my assessment is that this is a great opportunity for a job you can apply to on the internet and have zero experience and begin working at in less than a day and make around $30K/year full time.  In that regard, from a Mustachian perspective, I have learned in two days that these types of jobs offer a wonderful safety net in FIRE where you can jump in an supplement any shortfalls quite easily.  My target right now was $100/week to get me a bit over $5K a year that I can add to my stash.  In two short days I am three dollars away from that goal with less than a full days work, so my next challenge is making it fit in my life.  The two nights I went out are not something I normally will do as it impacts my family time.  The scheduled hours this weekend are more likely to work as I tend to be an early riser and everyone will be asleep.  But those three hours have been shown thus far to fall short of what would be needed to hit the goal (not a surprise, as I was in no way expecting to earn in excess of $30/hour, as the typical reported results are $15-$18 for DoorDash and early results show that to be accurate if I remove burrito outliers) (peak pay alert just let me know it is $4 now).

I will share what I learn going forward if there appears to be any interest.

« Last Edit: February 28, 2020, 12:18:30 PM by caracarn »

Valvore

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Re: Food delivery as a side hustle?
« Reply #4 on: February 28, 2020, 12:28:19 PM »
So my DH and I use to do this as a date night! We would cruise around blasting music and make it a fun game.

While having 2 people there splits your "hourly pay." There were actually some major benefits. We didn't have to park which saved precious time, especially in the hip areas where everyone likes to order food from. One person would run in and grab the order while the other circled the block. IMO we got better tips because the food would get there really fast.

 I could also look up directions for the next order while DH dropped off at the door. So when he got back in I would yell "DRIVE DRIVE DRIVE" lol. We are nerds. We haven't done it in over a year though. Mainly because we make a lot more now so the door dash money seems paltry. But I always liked the idea of making money on a date night instead of spending it.

erutio

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Re: Food delivery as a side hustle?
« Reply #5 on: February 28, 2020, 12:32:49 PM »
Do you have to have a car?  Or can you deliver by bike? 

StarBright

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Re: Food delivery as a side hustle?
« Reply #6 on: February 28, 2020, 02:02:29 PM »
So my DH and I use to do this as a date night! We would cruise around blasting music and make it a fun game.

While having 2 people there splits your "hourly pay." There were actually some major benefits. We didn't have to park which saved precious time, especially in the hip areas where everyone likes to order food from. One person would run in and grab the order while the other circled the block. IMO we got better tips because the food would get there really fast.

 I could also look up directions for the next order while DH dropped off at the door. So when he got back in I would yell "DRIVE DRIVE DRIVE" lol. We are nerds. We haven't done it in over a year though. Mainly because we make a lot more now so the door dash money seems paltry. But I always liked the idea of making money on a date night instead of spending it.

My DH and I are past the stage in life where this would be feasible - but what a fun idea! I could totally have seen us doing something like this when we were in our 20s.

Gronnie

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Re: Food delivery as a side hustle?
« Reply #7 on: February 28, 2020, 03:07:31 PM »
Have you let your car insurance know you are doing this?

You should really figure your hourly rate after increased insurance costs, gas, wear and tear on your vehicle, etc.

It's likely much lower than you think it is, and maybe even net negative.

MayDay

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Re: Food delivery as a side hustle?
« Reply #8 on: February 28, 2020, 03:27:02 PM »
Oy, this seems like a terrible idea. The pay is low, and do much wear and tear on your car.

jamesbond007

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Re: Food delivery as a side hustle?
« Reply #9 on: February 28, 2020, 04:08:39 PM »
So much learning I can share in just two days.  Will make sure to include your questions and can give a lot more detail if anyone wants.  Also at this point I have built a spreadsheet that calculates my hourly rate for each "shift" but also overall and will use that to compare the three services once I can operate in all of them so i can determine which is the most lucrative.

So the basics:
  • Yes, I am currently doing DoorDash, as they are the only one that lets you get started without waiting for stuff to arrive or for you to go through some sort of training.
     As soon as I can delve into Postmates and GrubHub, I will.
  • You do get to accept and offer, decline, or if you do not respond in a period of time (in my area it is 45 seconds, but I saw in the help in some places it is 90) it goes to someone else.  The issue is one metric is your acceptance rate and it can be a problem as I will explain later.
  • I an not sure what you mean on coverage radius
  • The area is divided into service areas.  You select the service area you work in, but that also is a bit ephemeral as I will explain.
  • A delivery may make you change service areas.  This is pretty common in my short experience.  So I would pick up in one zone but deliver in another, suddenly finding my next order outside of the zone I though I was in. This creates a lot of dynamics to consider.  I am a middle aged white male, and many of my deliveries or pickups were in some areas that a college aged female might not be comfortable in.  In fact some of them, I was not comfortable in.  I have not operated past 9 PM, but as my wife said when I shared this might be a good option for our 20 year old daughter who is struggling to find money for her car repairs, so said she'd not be comfortable with her in some of the locations I ended up in.  You can mitigate that by being very careful what you select, but that has adverse impacts of metrics that DoorDash measures you on which you will learn about below.  It also can change you peak pay and therefore earning level substantially, again more details on how that works below.
  • App is actually quite well designed and easy to use, but you do need a solid level of organization.  I actually ended up not delivering a drink with an order because I got things mixed up.  So far, not a problem, but this may come back to haunt me.
  • Can contact customer via text or phone and this is done through a masking interface that does not expose the actual phone to you or them so not privacy dangers I can see there
  • DoorDash offers something called Peak Pay which can be worked, and as a Mustachian this is actually very intersting to me as it plays right to our optimization love.   My earnings are certainly juiced because of deliberate choices I made to learn to play the game to the best advantage I could.
  • You can get alerts when not working.  So for example I currently have left these on, and it will notify me when peak pay is available in areas I have scheduled in.  Just got an alert over my lunch hour as I write this that I can get $2 peak pay right now if I head out and deliver.
  • You can schedule a "dash" (think of this as a shift you work) in the future.  So for example I have scheduled 5:30 - 7:30 AM Saturday morning in one service area and 6 - 7 AM Sunday morning in the service area I live in.  Scheduling gives you priority for orders when you do a dash (though not sure that helps as I have yet to work a schedule and I have not had much trouble getting orders, but if there is zero break between them then it might do it, but I cannot talk about this with personal evidence until after this weekend).  Schedules are not available whenever, each service area only had a certain amount and if can differ and can change.  So for example the Sunday morning schedule is the only time available all Sunday in my service area, but other service areas can have 6-12 time blocks.  Soem blocks are large (I have seen 4PM - 1AM (next day)) or as small as 30 minutes.  For example the zone I am working Saturday morning has 4 - 4:30 AM before the one I choose, and then 11 AM - 12PM next, plus many others.
  • The did a great job of what would be known as "gamefication" which appeals to the game player in me.  Each delivery seems like a quest does in the games we play.
     When I complete that quest, I am served up another.  Also the peak pay draws "players" to an area to mazimize their earnings.  Peak Pay for a single order for me last night was $9, meaning I got a $9 add-on to the standard rate of the order so it boosted that delivery to $13.50,  This is what I refer to about optimizing the process.  At times I drive to the next service area over if it has peak pay and the one I am in does not.  So you are doing cost/benefit mental math all the time, which can be fun for some or irritating for others.  I think Mustachians will find this appealing, because it falls right in line with our optimization strategies.  How can we maximize the benefit we are getting?
  • The earning rate is low enough that it appears the taxable income on any of these endeavors will be very, very low.  For example on my $97 of earnings, I have $93.13 in mileage (162 miles), so my taxable income is less than $4 right now.  This can once again be Mustachian maximized.  I did a dash (shift) last night from 5 - 8 and did it from work.  My first pick up was less than a mile away, and because I was working at my delivery business, my drive home after my shift can be included in those miles, so even though I was 30 miles from home, effectively going by my office on the way home, my trip home was tax deductible, so if you can work in a pickup each way (what I did both ways that day, delivering in the morning on the way in and after work before heading home) you are suddenly turning in the miles you drive to a from your job into something that benefits you rather than just costs you.  Might be worth MMM taking a peak at this method as perhaps a way to lower the cost of clown car ownership.
  • There were times I was driving around for 10 minutes without an order, so it is not perfect.  Again, will see if I notice any difference with a schedule.
  • I did have one order last night at a Chipotle where I truly waited 40 minutes for them to make the order.  My entire time for that delivery was 1 hour and 3 minutes, which  made my earning $9.52/hour, so very poor with what I had seen.  My best dash so far was $19.50/hour.  So you do need to learn the local area, much like a cabbie.  There were 20+ drivers waiting for orders when I walked in and the place was very, very slow.  Some drivers cancelled their orders (something all services penalize you for up to and including banishment from the system) and went on.  It was my last order of the night so I choose to stick with it.
  • That led to another flaw in the process.  While I was stuck waiting for said burrito order, the app sent me 3-4 other orders that were nearby (the app will help you maximize.  Next point below for more).  I intentionally did not hit Decline as I did not want to impact my acceptance rate and I let them time out.  However, it appears that did not help, because my acceptance rate is now 78%, down from the 100% I had until then.  So this means you really have to be careful thinking you can choose which orders you pick up because it does seem there is no way to not get dinged for not accepting an order.  According to the site, this metric getting too low can accept you ability to get orders (I assume the algorithm will prioritize drivers with a higher acceptance rating to get the order first and on a busy night that can mean a long time between an order coming your way).   In my area, as others, there are some places where I would not feel safe driving into, especially late at night, so you can decline orders to avoid that with the mentioned consequences.
  • On my morning run it, I received one order and in seconds got another offer asking if I wanted to add it to my route.  It was at the same IHOP so I did that, and that was the one where I hit the $19.50/hour as I was not making two pickups and two deliveries, but one pickup and two deliveries so it took less time.  This was a nice feature, but it has a dark side as noted above.
  • All of this resulted in me working longer than I intended.  Some of the reasons were positive (I was having fun, the game feeling of "I'll just do one more!", etc.) but they can be negative (now that I know my acceptance rate was hammered I might have accepted those additional orders while stuck at Chipotle and added 30-60 minutes to my night just to avoid a bad outcome). 
  • At this point, with the very small sample size, it appears that 30 minutes for an order is about what things are working out to.  So I can plan for 2 orders an hour.  This should factor heavily into your decision on if this works for you or not.  While my local service area (the one I live in and would prefer to work in for convenience) does not have much or high peak pay, I have 3 others within 10-20 miles away that regularly seem to have a level ranging from $3-$9.  Since the base rate is $3-$5 for a delivery, working all your dashes in non-peak pay times or areas can easily cut your earnings in half or more.  On my 11 deliveries, 8 had a peak pay booster which totaled $36 on top of my $45 base pay.  Adding in $16 of tips from 4 of those orders means that over 50% of my pay was tips or peak pay.  It is also crucial to note that it does not appear that tips are popular.  The service does say customers can add them later or at the time of the order.  0 customers added a tip later.  All 4 of the tips were in the initial order.  You will get an alert if a customer adds a tip later. 
  • The threshold for retention is pretty hard to reach.  If you have more than 1 delivery issue reported by a customer in your last 100 orders your account can be deactivated so you need to maintain a 99% rating there to avoid a problem.  Also your customer rating needs to be 4.2 out of 5 to avoid the same potential for review.
     The system does not share how many reviews you have just your score.  At this point my only rating is a 1, likely from the customer who I forgot to deliver the drink to.
     Or... I suppose I could have had more ratings all of which are a 1, but no way to tell.  I assume it is the former because I had no rating until that happened on my 6th delivery and the number has not changed since then, even though I think I have upped my customer service game as I learned to operate the customer contact interface on my second day.  This allowed me, for example, to keep the person with the terrible Chipotle order updated as I waited for 40 minutes and they knew what was happening, or that likely would have been another terrible rating.  Perhaps it was, there is no way to tell.  At this time I have not been norified that I am under review because of my rating and perhaps, like in many organizations, those metrics are there to offer a way to remove problem children, but that unless it gets really bad drivers escape notice.  I'm hoping they at least will give me a chance to get to 100 or more deliveries before they even look at that.  The sad reality is that people do not take time to provide ratings very often unless they are mad, and since I did not know how to contact customers on that first day, I could not even have apologized, though once you complete the order the ability to contact them is gone and I did not notice the oversight until I was delivering my second order and realized the drink went with the first one I had done.  So this one hangs over me already like a sad spectre over my shoulder.  The published quality metrics are something I have already failed at just 6 deliveries in and will work to make up, but my hope lies in not being noticed, so in this way it works like many minimum wage or other jobs.
So overall, my assessment is that this is a great opportunity for a job you can apply to on the internet and have zero experience and begin working at in less than a day and make around $30K/year full time.  In that regard, from a Mustachian perspective, I have learned in two days that these types of jobs offer a wonderful safety net in FIRE where you can jump in an supplement any shortfalls quite easily.  My target right now was $100/week to get me a bit over $5K a year that I can add to my stash.  In two short days I am three dollars away from that goal with less than a full days work, so my next challenge is making it fit in my life.  The two nights I went out are not something I normally will do as it impacts my family time.  The scheduled hours this weekend are more likely to work as I tend to be an early riser and everyone will be asleep.  But those three hours have been shown thus far to fall short of what would be needed to hit the goal (not a surprise, as I was in no way expecting to earn in excess of $30/hour, as the typical reported results are $15-$18 for DoorDash and early results show that to be accurate if I remove burrito outliers) (peak pay alert just let me know it is $4 now).

I will share what I learn going forward if there appears to be any interest.



Great summary of your experience. Thank you.

lutorm

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Re: Food delivery as a side hustle?
« Reply #10 on: February 28, 2020, 04:09:36 PM »
Quote
For example on my $97 of earnings, I have $93.13 in mileage (162 miles), so my taxable income is less than $4 right now.
That tax deduction for mileage isn't because the IRS is nice, it's because that's their estimate of how much it costs to drive. Yeah, you can probably get away with costing less if you have a low-value, high-gas mileage, low-maintenance car, but that looks to me like they basically pay your car costs while you drive for free.

fell-like-rain

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Re: Food delivery as a side hustle?
« Reply #11 on: March 01, 2020, 05:36:25 AM »
Quote
For example on my $97 of earnings, I have $93.13 in mileage (162 miles), so my taxable income is less than $4 right now.
That tax deduction for mileage isn't because the IRS is nice, it's because that's their estimate of how much it costs to drive. Yeah, you can probably get away with costing less if you have a low-value, high-gas mileage, low-maintenance car, but that looks to me like they basically pay your car costs while you drive for free.

This. You didn’t earn $97, you had $97 of revenue. You’re saving money on taxes because your “profit” was $4 for all that work.

Ann

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Re: Food delivery as a side hustle?
« Reply #12 on: March 01, 2020, 01:18:18 PM »
Thank you for your detailed description of working for DoorDash.  Very informative.

ixtap

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Re: Food delivery as a side hustle?
« Reply #13 on: March 01, 2020, 01:36:02 PM »
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For example on my $97 of earnings, I have $93.13 in mileage (162 miles), so my taxable income is less than $4 right now.
That tax deduction for mileage isn't because the IRS is nice, it's because that's their estimate of how much it costs to drive. Yeah, you can probably get away with costing less if you have a low-value, high-gas mileage, low-maintenance car, but that looks to me like they basically pay your car costs while you drive for free.
So my DH and I use to do this as a date night! We would cruise around blasting music and make it a fun game.

While having 2 people there splits your "hourly pay." There were actually some major benefits. We didn't have to park which saved precious time, especially in the hip areas where everyone likes to order food from. One person would run in and grab the order while the other circled the block. IMO we got better tips because the food would get there really fast.

 I could also look up directions for the next order while DH dropped off at the door. So when he got back in I would yell "DRIVE DRIVE DRIVE" lol. We are nerds. We haven't done it in over a year though. Mainly because we make a lot more now so the door dash money seems paltry. But I always liked the idea of making money on a date night instead of spending it.

I suspect this is what was happening when I placed an order a few weeks ago. My food tracked in the opposite direction and then someone of the opposite gender as my driver finally showed up with my cold order.

So, OP has a $4 profit from how many hours of work? Not exactly a strong recommendation.

Even leaving out additional maintenance, have you worked out how much additional fuel you have used in that time?

caracarn

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Re: Food delivery as a side hustle?
« Reply #14 on: March 02, 2020, 08:58:53 AM »
So all good points, and YMMV with my views on some of this.

Certainly there is wear and tear on the car, but having used my car to drive for work (many times at an office job we had we took advantage of not renting a car and instead driving our own on a business trip and claiming the mileage because we felt the pay far outpaced the maintenance and gas).  58.5 cents a mile is quite a bit and I've never seen that getting eaten up with fuel and maintenance, but yes obviously the actual net profit is less. 

In addition at this point, as I optimize the experience, I will see if I can juice this all a bit.  This weekend was an eye opener, but I think I have enough for a plan of attack.

So, the scheduled times in the morning are something I will never do again.  Saturday I had scheduled a time they suggested of 5:30-7:30.  Not a single order came in during that time, and in fact it was actually good after 7:30.  Similarly times for dinner began around 4:30, but I determined 6-8 PM is actually busiest and keeps you running around.  If you can pinpoint those times then earnings were $20-$25 per hour.  At this point for $241.50 I have spent $40 on gas and driven about 400 miles, so given that my car gets oil changes every 7,500 miles and they cost $35 at the dealer, this does not seem like a terrible result.  I am really at the point that the ChooseFi boys would say it is hard to earn more at my current job as I am paid fairly for the market.  The amount earned here is not really needed for our budget, but is just a way to try to increase cash we can save.   The impact of the earnings being offset by mileage allows this money to be earned tax free in essence, and it make me feel like I am doing something versus just waiting things out.  At this point I think I can make the $100 relatively easily with about 8 hours of work on the weekend (2 hours for breakfast on Saturday, and 3 hours each for dinner on Saturday and Sunday).

caracarn

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Re: Food delivery as a side hustle?
« Reply #15 on: March 02, 2020, 09:52:00 AM »
The benefit of food delivery is there is nothing that impacts your insurance.  You are not adding anyone into your car.  It may increase your mileage, but for most people doing this as a side hustle you are not going to be driving thousands of miles a week that might necessitate a change.  This was a big reason i chose not to do Uber ot Lyft, because your liability does change because you have passengers who do not know you and therefore would be likely to seek damages etc. in the event of an incident. 

caracarn

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Re: Food delivery as a side hustle?
« Reply #16 on: March 02, 2020, 09:58:14 AM »
Oy, this seems like a terrible idea. The pay is low, and do much wear and tear on your car.
I understand there are costs, but these services are suggested all the time as side hustle ideas on FI sites.  You are using the car more but you are monetizing an item that is normally just pure cost.  A big part of the argument about the reason car side hustles makes sense if the tax savings that allow you to keep the money you make versus paying tax on it.  Will that 30%+ tax savings be enough to cover the added maintenance remains to be seen.  500 miles a week is a bit more than 1 tank of gas, and this week was really about 2 1/2 weeks of what I will likely do, so my net change in fuel will be perhaps 1/3 of a tank a week, so let's say an additional 1.5 tanks a month to be generous.  That means about 20 extra fill ups a year, or about $600 of fuel in my case.  That will be against about $5,000 in revenue.  I think anyone would be hard pressed to say you are going to increase your maintenance costs by over $4,000 per year, so on the surface that is my thought. 

researcher1

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Re: Food delivery as a side hustle?
« Reply #17 on: March 02, 2020, 12:37:52 PM »
At this point for $241.50 I have spent $40 on gas and driven about 400 miles, so given that my car gets oil changes every 7,500 miles and they cost $35 at the dealer, this does not seem like a terrible result. 

The benefit of food delivery is there is nothing that impacts your insurance...

500 miles a week is a bit more than 1 tank of gas, and this week was really about 2 1/2 weeks of what I will likely do, so my net change in fuel will be perhaps 1/3 of a tank a week, so let's say an additional 1.5 tanks a month to be generous.  That means about 20 extra fill ups a year, or about $600 of fuel in my case.   I think anyone would be hard pressed to say you are going to increase your maintenance costs by over $4,000 per year, so on the surface that is my thought.
You are clearly NOT accounting for all of your costs, and are therefore grossly exaggerating your hourly rate.  A few points...

- Are you SURE your personal insurance policy covers food delivery?  Have you read your policy to confirm?  Have you spoken to your agent directly?  My auto policy doesn't cover food delivery.  And many online sources say it is NOT covered...
"If you are delivering food in your personal vehicle, then you must purchase commercial coverage for your vehicle."

- Did you subtract your fuel costs from your revenue before calculating your hourly rate? 
If not, you need to re-do your numbers.

- You said you spent $40 in gas and drove 400 miles. 
If you do this on a weekly for a year, you will spend OVER $2000 in fuel, plus put OVER 20,000 extra miles on your car!!!
That is about 3 oil changes & tire rotations, plus about 50% wear on your tires (~$300).  This doesn't even count other needed maintenance (brakes, trans fluid & coolant changes, cabin/air filters, spark plugs, ect).

- Did you factor in needing to replace your vehicle TWICE AS FREQUENTLY as you would otherwise?
As noted above, you will be putting on ~20K miles just in food delivery, so your car will wear out twice as fast.  That means the cost of a new vehicle, the reduced value of your current car (given the excess miles it will have), plus all of the transaction costs (sales tax, dealer doc fee, title/registration fees, ect).

Gronnie

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Re: Food delivery as a side hustle?
« Reply #18 on: March 03, 2020, 06:31:02 PM »
The benefit of food delivery is there is nothing that impacts your insurance.  You are not adding anyone into your car.  It may increase your mileage, but for most people doing this as a side hustle you are not going to be driving thousands of miles a week that might necessitate a change.  This was a big reason i chose not to do Uber ot Lyft, because your liability does change because you have passengers who do not know you and therefore would be likely to seek damages etc. in the event of an incident.

This isn't true. The vehicle is still being used for business purposes.

Staunch Aim

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Re: Food delivery as a side hustle?
« Reply #19 on: March 03, 2020, 06:42:50 PM »
I wonder if gigs like this allow folks who live in dense areas to confine their delivery area such that delivering via bike were possible.  I'll have to look into it - I could get paid to get some cardio in!