Food delivery as a side hustle?

[caracarn]

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]

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]

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]

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.

[Valvore]

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]

Do you have to have a car?  Or can you deliver by bike? 

[Gronnie]

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]

Oy, this seems like a terrible idea. The pay is low, and do much wear and tear on your car.

[jamesbond007]

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]

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]

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]

Thank you for your detailed description of working for DoorDash.  Very informative.

[ixtap]

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]

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]

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]

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]

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]

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]

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!

[caracarn]

So updating where things are at right now.

I researching the insurance issues more I did make a change and moved only the car I use for deliveries to a new carrier that covers delivery (food or other items just no ride share) as part of their basic policies.  By only having my wife and I insured on that car and not our teenagers, the rate was reasonable and overall my insurance costs have gone down even though I am now covered for the business.

In four months I have not made over $6,000 with about 10-15 hours per week of work.  I did also pick up Instacart in the height of the COVID shutdown and for about six weeks that was my main focus and had several weeks where between three services I made well over $300, again in 10-15 hours of work.  Instacart orders are hard to come by and have been that way since late April.  Rumors about bots or just too many shoppers hired are wrestling for traction, but I am just trying to work side hustles that make money and do not cause aggravation.  I have settled mainly on GrubHub as they limit drivers in an area and therefore avoid over saturation.  My current model is to head out after I eat dinner and work until 7 or 8 at night when the orders start to dry up and/or turn into fast food runs to seedy neighborhoods.  I have been using an app (Stride) to track miles and income and so it gives me a view into the offset, so I have about $2,000 that is taxable at this point with the rest written off to mileage.  Given that our entire household's fuel spend for this time has been $800, certainly making money in this process.  In my full time job we took pay cuts in March so I have increased my weekly target for this side hustle to cover that along with my original extra savings target which means I look to make $250/week and I am easily doing that.  I could make the original $100/week target in a single weekend night in about 4-5 hours.   Last night I made $120 in 4.5 hours and I had periods of waiting for orders so it could have been another $20 on a busier night. 

So far I feel this makes sense for me and my family and has been a nice way to really increase our savings at a much higher rate than I expected when I started in February.

[Sugaree]

When I talked to my insurance agent, I was told that working for a restaurant like Domino's would be covered, but DoorDash wouldn't.  I guess they assume that an established business would have their own coverage.  This was USAA.

[caracarn]

I am with State Farm.  I was very clear what I was doing and they said it was all covered.  FYI, they also clarified that pizza delivery establishments do NOT cover their drivers.  That is on the driver.  This was another thing the insurance would cover hence why USAA covers Domino's.  Doing this work, I understand why they would cover pizza for one company versus general food delivery, as the risk is less.  You are not using an app wheen delivering for a pizza place you just run out to where they tell you to go and you keep coming back to the same place.  There is also a limit of orders to some degree with a single delivery source.   When I can pickup from hundreds of places in my area my insurance understands I can be anywhere, not just within the 5 miles radius most pizza places restrict their deliveries to because of timing to get a warm pizza to you. 

What I so not understand is that AllState would let you get a ride share add-on which covers people in your care and the added risk of medical injuries to passengers but will not cover any food delivery.  To me you were covering a much higher risk already and if I then just did less why not, but was not able to get an answer from my agent who was just able to let me know it would not be covered. 

So to turn back to your point, in my research I did find that it is very, very uncommon for a pizza business to insure their drivers.

[Sugaree]

Makes sense.  I opted against doing any of it due to wear/tear on my vehicles and the fact that the OT fairy once again made an appearance at my real job.

[StashingAway]

OP, what vehicle do you drive?

[researcher1]

Last night I made $120 in 4.5 hours and I had periods of waiting for orders so it could have been another $20 on a busier night. 

So far I feel this makes sense for me and my family and has been a nice way to really increase our savings at a much higher rate than I expected when I started in February.

I'm glad you listened to me about the insurance, but you are still wildly overestimating your hourly rate...
- You still aren't subtracting fuel costs from your revenue before calculating your hourly rate.
- You still aren't factoring in all of the extra wear/tear on your vehicle (oil changes, tire rotations, tires, brakes, transmission fluid, ect). 
Your stop-and-go delivery miles are the absolute hardest miles you can put on a vehicle.
- You still aren't accounting for the fact that you will have to replace your vehicle TWICE AS FREQUENTLY as you would otherwise.
Based on your OP, you are racking up ~20K miles just in food delivery!

[Dicey]

Last night I made $120 in 4.5 hours and I had periods of waiting for orders so it could have been another $20 on a busier night. 

So far I feel this makes sense for me and my family and has been a nice way to really increase our savings at a much higher rate than I expected when I started in February.

I'm glad you listened to me about the insurance, but you are still wildly overestimating your hourly rate...
- You still aren't subtracting fuel costs from your revenue before calculating your hourly rate.
- You still aren't factoring in all of the extra wear/tear on your vehicle (oil changes, tire rotations, tires, brakes, transmission fluid, ect). 
Your stop-and-go delivery miles are the absolute hardest miles you can put on a vehicle.
- You still aren't accounting for the fact that you will have to replace your vehicle TWICE AS FREQUENTLY as you would otherwise.
Based on your OP, you are racking up ~20K miles just in food delivery!

Geez, dude, lighten up! OP is learning and responsive, yet you're kicking his ass!

The calculation for mileage costs is similar to those estimates of what it costs to raise a child. They're based on averages, based on the way average people live and spend. As mustachians, we work the angles and spend far less than average, which works in our favor. OP is not driving a late model vehicle, nor is it a lease. He's also using this to mitigate his commute costs, which you're conveniently ignoring.

It's great that you know so much, but the OP is not stupid. Let him learn. Even though I have no intention of doing this ever, it's fascinating to learn how it works from an insider's point of view. @caracarn, thank you for taking the time to share your experiences with us.

[researcher1]

Geez, dude, lighten up! OP is learning and responsive, yet you're kicking his ass!
The calculation for mileage costs is similar to those estimates of what it costs to raise a child.
He's also using this to mitigate his commute costs, which you're conveniently ignoring.

It is great to read about pie-in-the-sky "I'm making $25/hr" claims, but that is simply not reality.
My points are important so the OP and others account for their true costs and know what they are actually making.

I'm not sure I understand your point about mileage calculations being estimates.
The OP explicitly told us how many miles he is driving each week, so you can easily calculate his actual mileage.
And those calculations come out to the OP driving and ADDITIONAL 20K miles just delivering food.

You are also incorrect in the OP "mitigating his commute costs." 
He explicitly said that his approach is to..."head out after I eat dinner and work until 7 or 8 at night."

[caracarn]

Thanks dicey and researcher1.

I'm fine with the direct approach, but thanks for the protection dicey.

Researcher1 I am not sure I agree with the logic, so let me explain.

The fuel costs, wear/tear etc. are intended to be covered by the mileage deduction against your taxes, or at least that has been how I have heard any CPA ever explain why when examining any business that uses vehicles that you can "ignore" this because you are made whole that way.  This has always made sense to me as at the $0.54 at 100 miles you are getting $54 of credit.  My oil changes are $19 at the dealer.  I do not change my oil every 100 miles and I am therefore way ahead on the "wear/tear" department and therein lies the logic of the CPA advice I have been given that typically mileage allowance covers those earlier replacements etc.

I would love to continue to discuss as I certainly want to learn other perspectives, so I ask a counterpoint.  If what you are advocating is true then everyone who delivered would stop doing it because they would be losing money. 

So that we can look at this with more detail, let me share my actual info on all fronts.  If I miss something else let me know.

Income so far $5,885.37
Fuel March - June (4 full months):  $523  - keep in mind we have two other cars in the household and even though they were not going out as much as me, my kids are working and driving to their jobs so at least 2-3 tanks of gas are theirs, but lets just say all the gas is mine to make it easy
Oil changes - $50 (twice for the miles driven)
Miles: 6,574 - this is the mileage used for deliveries as I am tracking this in a log as I must for tax purposes
Insurance; $61/month (again hard to say this is all for delivery especially since there is no markup at all for State Farm as delivery is included in their base provisions and this insurance was a net savings of about $200/year over what I was paying before)

So yes if I keep up this pace I will be at about 19,720 miles for the year for deliveries.  I would at that point have made a little under $18,000 for that work, had 4 more oil changes and spent another $1,000 in fuel. 

So the annual numbers extrapolated would be
Income $18,000
Expenses $1,600 fuel - 150 oil changes = $1,750
$16,250 to cover insurance (which as stated above really is not extra cost than just having the cat anyway) and to build up a fund for a replacement vehicle

So if I needed to replace the car every 3 years (figuring I'd get to about 100,000 miles total with other driving by then versus 6-7 years otherwise), I have $48,000 in extra income to pull from to do that.  I can likely find a good Honda or Toyota for $15K with low enough miles to last me another 100K, so it seems that I might be roughly $30K in the plus column here.  Again, want to hear the counter argument to what I am missing, but this would seem to be how this could realistically play out.

On a side note of luck, in May I had my check engine light go on at a little over 118K miles.  When I took it into the dealer they said I needed a new engine, but it was under warranty until 120K so I got a new engine in my car now for free, which will likely get me the next 100K in deliveries without any more cost now.  I understand this was just dumb luck as otherwise I would have been at the point of replacing the vehicle as you note, so I am not factoring this into my calculations, just enjoying the benefit it has provided me. 

Taking this from a different perspective, if I make $100K in my job ($50/hour) would you also then say because I cannot get to my job for free that my hourly rate is therefore lower?  I do not think we normally look at work that way any more than my kids making $10/hour at McDonald's factor in their car cost and say they only make $8.  I understand and agree that you want to look at your expenses, but am still not certain that it is not fair to state that I can average $20-$25 per hour doing this work and that their are fuel and wear/tear expenses that come with that that mean I will need to buy a car sooner.  At this point I also need to say I have been working from home in my normal job since March so I am not commuting to work there, so not even an opportunity to offset commuting cost, but in reality that is such a challenge at least heading into work that I would likely not do that again when we do return to office which at this point with the last we heard will not be for at least two more months. 

[caracarn]

OP, what vehicle do you drive?

I drive a 2015 Hyundai Sonata for this.

[erutio]

Thanks for the updates.

I signed up for doordash about a month ago, but they say there were too many dashers in my area.  I was signing up by bike.

[researcher1]

Researcher1 I am not sure I agree with the logic, so let me explain.

The fuel costs, wear/tear etc. are intended to be covered by the mileage deduction against your taxes...so you can "ignore" this...
If what you are advocating is true then everyone who delivered would stop doing it because they would be losing money. 

I'm curious about some of your expenses...
- You mentioned your oil changes cost you $19, but you previously said they cost $35.  Which is it?
- The only "expenses" you account for are oil changes.  What about all of your other costs? 
Tire rotations, cabin/air filters, tires, brakes, transmission fluid, coolant changes, belts, spark plugs, ect?
- How does a new engine in your vehicle "get me the next 100K in deliveries without any more cost"?? 
You will still have all of the same maintenance/repair costs you had before the engine was replaced, right?
- You drove 6,574 miles but only spent $523 on fuel?  Assuming you are getting 25 MPG in your hard stop/go driving, that means you filled up for less than $2/gallon?
- Income was $5,885.37.  I assume that is after the fees/commissions charged by the company?

You also mention that you will replace a vehicle every 3 years, instead of ~6 years if you didn't deliver.
- The average driver puts on ~12K miles/year.  You are driving an additional 20K miles on top of that.
- That means you are racking up miles 267% faster than if you didn't deliver, so your car replacement timeline seems off.
- And this car replacement isn't being taken out of your quoted hourly rate.  If you factor this in, what would your hourly rate be?

If drivers actually accounted for all of their expenses, they would see how low their hourly wage really was, and many should absolutely stop doing it.
There is a huge amount of information on the internet about this.  Here is one summary...
- Uber drivers typically collect $24.77 per hour in passenger fares.
- From that, Uber takes $8.33 in commissions and fees, about a third of all passenger fares.
- Vehicle expenses like gas and maintenance cost drivers about $4.87 per hour, Mishel determined, even after taking into account their tax deductibility.
- That leaves drivers with $11.77 per hour, from which they pay $0.90 in extra Social Security and Medicare taxes, because they are self-employed.
- If drivers don’t pay for health insurance or contribute to a retirement plan, they can take home $10.87 per hour.
https://www.marketwatch.com/story/this-is-how-much-uber-drivers-really-make-2018-05-15

[StashingAway]

Researcher1 I am not sure I agree with the logic, so let me explain.

The fuel costs, wear/tear etc. are intended to be covered by the mileage deduction against your taxes...so you can "ignore" this...
If what you are advocating is true then everyone who delivered would stop doing it because they would be losing money.

Mmmmm, no, that's not quite how it works. The deduction in taxes doesn't make up for cost of ownership. You are making the same common mistake that people do when donating to charity. If you donate $7k in charity, that doesn't reduce your tax bill by $7k. That reduces your taxable income by $7k. So if you made $50K in a year profit, donated $7K to charity, you are instead taxed on $43K. In this case you might owe $3K instead of $4K for your income. See how that $7K donation turned into a $1K monetary value on your deduction? And with the new tax structure, you may see NO BENEFIT from deductions because the standard deduction is so high. So you won't even break even on your deductions until you are at $12.5K! Meaning you'd have to drive 25000 miles before even seeing a slight benefit from deducting the government mileage from your taxes. Not super peachy. Up until that $12.5K, 100% of the cost per mile on your vehicle is unaccounted for and paid directly from you. Married, filing jointly? The two of you need to come up with $25K before itemizing deductions make sense.

If you run the numbers in a ride-share scenario, you need to look at the profit/loss. The only reason we use the government's cost/mile estimate is it turns out to be an accurate estimate of the cost to run a passenger car per mile in the US. This accounts for everything- gas, maintenance, depreciation, etc. of the average vehicle in average driving conditions. You may be able to beat the average, but it's a good baseline.

So, in this case, it's prudent to estimate that you are costing yourself 57.5c per mile you drive. You don't get to stack that with gas and maintenance either; meaning that as you deduce 57.5c per mile for your business, your maintenance and fuel costs come directly from your profit. No double dipping. You have to repair your transmission? That's an out of pocket cost and not counted for your deduction.

You know why Uber and DoorDash and Lyft and all of that can beat the market delivery prices so much? It's because they don't have to maintain a fleet of vehicles- something which turns out to be a significant cost in the long run. They are taking advantage of the fact that the average person doesn't realize the true cost of driving a vehicle. Depreciation, tires, maintenance, gas, oil, etc. all add up- to about $.57 a mile! You can reduce that if you get a reliable vehicle and drive it well, but you won't deviate that much... and if you're going to err, you might as well err on the side of caution and use the $.57.

[researcher1]

Mmmmm, no, that's not quite how it works. The deduction in taxes doesn't make up for cost of ownership. You are making the same common mistake that people do when donating to charity. If you donate $7k in charity, that doesn't reduce your tax bill by $7k. That reduces your taxable income by $7k. So if you made $50K in a year profit, donated $7K to charity, you are instead taxed on $43K. In this case you might owe $3K instead of $4K for your income. See how that $7K donation turned into a $1K monetary value on your deduction? And with the new tax structure, you may see NO BENEFIT from deductions because the standard deduction is so high. So you won't even break even on your deductions until you are at $12.5K! Meaning you'd have to drive 25000 miles before even seeing a slight benefit from deducting the government mileage from your taxes. Not super peachy. Up until that $12.5K, 100% of the cost per mile on your vehicle is unaccounted for and paid directly from you. Married, filing jointly? The two of you need to come up with $25K before itemizing deductions make sense.

 They are taking advantage of the fact that the average person doesn't realize the true cost of driving a vehicle. Depreciation, tires, maintenance, gas, oil, etc. all add up-

EXACTLY.
This more clearly stated the point I've been trying to make from the beginning.

[Paul der Krake]

I think food delivery is a losing proposition for everybody involved: restaurants, customers, drivers, and ultimately taxpayers.

However, I want to push back on the idea that the IRS mileage allowance is a canard. It's not.

Using conservative numbers on a car that's used exclusively for delivery:

- one car, bought new = $25,000
- lifetime mileage on the car of 150,000 miles at 25 MPG and $3.50/g = $21,000
- one $50 oil change every 5,000 miles = $1,500
- one new set of tires at 50,000 miles, another set at 100,000 miles = $1,500
- throw in an extra $5,000 of various repairs
- car insurance for 10 years = $10,000

Total for operating the car from birth to death = $64,000

IRS mileage deduction allowance for 150,000 miles at 50 cents per mile = $75,000. This is before optimizing any of the conservative numbers that I've listed so far. If you know what you're doing:

1) you don't buy a 25k car that gets only 150,000 miles out of it at 25 MPG
3) you save a couple thousand dollars on the other items
and, most importantly:
3) you derive a non-negligible value out of the operation of the car for personal travel.

So yes, unless you drive an idiotic vehicle in an idiotic way, the IRS allowance more than compensates for the added wear and tear.

That being said, fuck everything about delivery apps.

[StashingAway]

I think food delivery is a losing proposition for everybody involved: restaurants, customers, drivers, and ultimately taxpayers.

However, I want to push back on the idea that the IRS mileage allowance is a canard. It's not.

Using conservative numbers on a car that's used exclusively for delivery:

- one car, bought new = $25,000
- lifetime mileage on the car of 150,000 miles at 25 MPG and $3.50/g = $21,000
- one $50 oil change every 5,000 miles = $1,500
- one new set of tires at 50,000 miles, another set at 100,000 miles = $1,500
- throw in an extra $5,000 of various repairs
- car insurance for 10 years = $10,000

Total for operating the car from birth to death = $64,000

IRS mileage deduction allowance for 150,000 miles at 50 cents per mile = $75,000. This is before optimizing any of the conservative numbers that I've listed so far. If you know what you're doing:

1) you don't buy a 25k car that gets only 150,000 miles out of it at 25 MPG
3) you save a couple thousand dollars on the other items
and, most importantly:
3) you derive a non-negligible value out of the operation of the car for personal travel.

So yes, unless you drive an idiotic vehicle in an idiotic way, the IRS allowance more than compensates for the added wear and tear.

That being said, fuck everything about delivery apps.

I completely agree with all of this. But if you don't know your actual costs of ownership over your vehicle lifetime, its a good baseline to start with. Also, I personally believe that the type of driving done for delivery is harder on your vehicle than average driving. Stopping, starting, city streets, idling, etc. will be harder on your vehicle than commuting or travel.

Usually people arrive at the delivery service in the opposite mindset; they buy a really nice car that they like to drive, and then decide that since they like driving enough they might as well make some money while doing so. Then rack up like 20K miles extra per year on their WRX or Lexus without planning. If you bought a beater civic or perhaps a cargo van to make heavy specilized deliveries... something not a luxurious... you are more likely to come on top.

But driving around in air conditioned living rooms with premium stereos that have lost 90% of their value after 200K miles isn't good finance, and most likely requires a facepunch! My stereo at home looses almost no value over the same time period.

[Dicey]

Geez, dude, lighten up! OP is learning and responsive, yet you're kicking his ass!
The calculation for mileage costs is similar to those estimates of what it costs to raise a child.
He's also using this to mitigate his commute costs, which you're conveniently ignoring.

It is great to read about pie-in-the-sky "I'm making $25/hr" claims, but that is simply not reality.
My points are important so the OP and others account for their true costs and know what they are actually making.
We are not in disagreement on this point, and OP seems to understand this as well.

I'm not sure I understand your point about mileage calculations being estimates.
The OP explicitly told us how many miles he is driving each week, so you can easily calculate his actual mileage.
And those calculations come out to the OP driving and ADDITIONAL 20K miles just delivering food.

Sorry you did not understand. Please see Paul's excellent elaboration in bold below. Note that I believe he was using 50 cents/mile as an example. The IRS actual MDA for 2020 is 57.5 cents, which is down from 58 cents in 2019.

You are also incorrect in the OP "mitigating his commute costs." 
He explicitly said that his approach is to..."head out after I eat dinner and work until 7 or 8 at night."

Second "explicit" quote below is directly from the OP.

I think food delivery is a losing proposition for everybody involved: restaurants, customers, drivers, and ultimately taxpayers.

However, I want to push back on the idea that the IRS mileage allowance is a canard. It's not.

Using conservative numbers on a car that's used exclusively for delivery:

- one car, bought new = $25,000
- lifetime mileage on the car of 150,000 miles at 25 MPG and $3.50/g = $21,000
- one $50 oil change every 5,000 miles = $1,500
- one new set of tires at 50,000 miles, another set at 100,000 miles = $1,500
- throw in an extra $5,000 of various repairs
- car insurance for 10 years = $10,000

Total for operating the car from birth to death = $64,000

IRS mileage deduction allowance for 150,000 miles at 50 cents per mile = $75,000. This is before optimizing any of the conservative numbers that I've listed so far. If you know what you're doing:

1) you don't buy a 25k car that gets only 150,000 miles out of it at 25 MPG
3) you save a couple thousand dollars on the other items
and, most importantly:
3) you derive a non-negligible value out of the operation of the car for personal travel.

So yes, unless you drive an idiotic vehicle in an idiotic way, the IRS allowance more than compensates for the added wear and tear.

That being said, fuck everything about delivery apps.

"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.[/li][/list]

[researcher1]

We are not in disagreement on this point, and OP seems to understand this as well.

Actually, the OP didn't seem to understand this, which is what several of us have been trying to point out.
The only expenses he's currently accounting for is fuel & oil changes.  In fact, the OP explicitly said that "fuel costs, wear/tear ect ... can be ignored".

Sorry you did not understand. Please see Paul's excellent elaboration in bold below. Note that I believe he was using 50 cents/mile as an example. The IRS actual MDA for 2020 is 57.5 cents, which is down from 58 cents in 2019.

You're not following my point.  I was responding to this comment from you...
"The calculation for mileage costs is similar to those estimates of what it costs to raise a child. They're based on averages, based on the way average people live and spend."

My point is that the OP should not rely on estimates from the IRS to calculate his costs.   He should be keeping track and calculating his actual costs.
He knows how many miles he's driving, what his MPG is, what maintenance his owner's manual calls for, how often he needs to replace brakes/tires, ect. 
There is no reason to guess or use government averages...instead, track his actual costs!

Second "explicit" quote below is directly from the OP.

You stated..."He's also using this to mitigate his commute costs, which you're conveniently ignoring."
This is simply wrong. 

The OP made ONE delivery when he first started that coincided with his commute.
He then theorized that "if you can work in a pickup each way" it could mitigate commute costs, not that he's actually doing that.

In fact, he goes on to say..."My current model is to head out after I eat dinner and work until 7 or 8 at night when the orders start to dry up..."

[Paul der Krake]

Ha! I was wondering if someone was going to notice my 50c/mile approximation. I generously rounded up (or down) every single number to account for increased costs compared to today's baseline. Still more than compensates.

Now it's possible that there is a potential delivery driver in rural Alaska who faces $6 gas, $500/month insurance because of evil polar bears, and a cabal of local dealerships that only sells luxury cars, I guess. For everyone else, it should be just fine.

[Dicey]

We are not in disagreement on this point, and OP seems to understand this as well.

Actually, the OP didn't seem to understand this, which is what several of us have been trying to point out.
The only expenses he's currently accounting for is fuel & oil changes.  In fact, the OP explicitly said that "fuel costs, wear/tear ect ... can be ignored".

Sorry you did not understand. Please see Paul's excellent elaboration in bold below. Note that I believe he was using 50 cents/mile as an example. The IRS actual MDA for 2020 is 57.5 cents, which is down from 58 cents in 2019.

You're not following my point.  I was responding to this comment from you...
"The calculation for mileage costs is similar to those estimates of what it costs to raise a child. They're based on averages, based on the way average people live and spend."

My point is that the OP should not rely on estimates from the IRS to calculate his costs.   He should be keeping track and calculating his actual costs.
He knows how many miles he's driving, what his MPG is, what maintenance his owner's manual calls for, how often he needs to replace brakes/tires, ect. 
There is no reason to guess or use government averages...instead, track his actual costs!

Second "explicit" quote below is directly from the OP.

You stated..."He's also using this to mitigate his commute costs, which you're conveniently ignoring."
This is simply wrong. 

The OP made ONE delivery when he first started that coincided with his commute.
He then theorized that "if you can work in a pickup each way" it could mitigate commute costs, not that he's actually doing that.

In fact, he goes on to say..."My current model is to head out after I eat dinner and work until 7 or 8 at night when the orders start to dry up..."

Okay researcher1, I'll concede. You are right about everything and everyone else is wrong. Or maybe it's just me that's wrong. There, you win. Game, set, and match to researcher1.

[StashingAway]

Ha! I was wondering if someone was going to notice my 50c/mile approximation. I generously rounded up (or down) every single number to account for increased costs compared to today's baseline. Still more than compensates.

Now it's possible that there is a potential delivery driver in rural Alaska who faces $6 gas, $500/month insurance because of evil polar bears, and a cabal of local dealerships that only sells luxury cars, I guess. For everyone else, it should be just fine.

I noticed that. But that's missing the bigger picture that costs are being incurred in the first place.

Ok, so let's assume that it costs $.30 per mile to drive the car because the driver does their own maintenance, they bought used so depreciation isn't killing them, using only liability insurance, etc.

Now, lets assume you're getting about 10% of the $.57/mile cost as a tax writeoff (contract workers generally pay between 8-15% come tax season). So that's about $.06 less per mile to run your vehicle. In this case, with tax write-offs included, it's still costing an efficient driver about $.24/mile to drive their vehicle.

So for 10,000 miles of driving, it is costing a driver $2400 to operate their business. Figures online are all over the place, but drivers seem to make an average of $1/mile, so $10,000. Running a vehicle in this scenario is costs about %25 of profits.

That really tells us nothing about opportunity cost until we know how much time it is taking to drive those miles. $/hour rate.

I am skeptical of the notion that you could "double down" and effectively cover your commute with running the service. You can turn down a % of offered jobs, but if you start turning down too many, the app will give you fewer options in the future. Most drivers shoot for over 50% acceptance rate. All of these factors are highly dependent on the region that you're delivering in (some people can't afford to turn down any jobs because the driver/delivery ratio is so bad.

The real way to do this is to take your total yearly earnings, reduce by your total time driving (including waiting for next order, etc), and then subtract something like $.24 per mile accrued, assuming those miles aren't "double down" miles. My untested guess is most people come out under minimum wage.

[six-car-habit]

   " MyFast thinks Delivery is for the Weak ! "

  Classic 30 second Volkwagen GTi commercial  ----   https://www.youtube.com/watch?v=77Tes6vWF5M

[caracarn]

Thanks for all the excellent dialogue folks!  It is fun to hear the perspectives.  Let me respond to some of the items mentioned, mainly from researcher1.  I tossed in the three year car life estimate for commentary and surprised no one talked about that as to me that was the "case study" to pick at.

I am aware there are other costs and I track my car costs (along with everything else) very diligently in YNAB.  It is how I know I spent $523 on fuel for all our cars in the house (I can track down to each car but was not bringing that forward here as I felt that even if the full $523 was delivery related I provided those numbers).  The other costs associated with a car will happen anyway, delivery just accelerates them, so I do agree I relatively flippantly disregarded them.  If I think it through I will need one extra set of tires over the life of the delivery as I have a great set that I like that costs $400, installed and mounted for this car and runs for over 80K miles (I replaced the first set at 88K miles and still had not fully gotten down to the wear level but winter was coming and I figure I would in another 5-10K so I changed them a bit early).  I hit all the other maintenance faster as more miles get turned up.  My attempt of showing the 3 year estimate and that I still had $15K a year at the end (which I could cover those maintenance costs I did not detail, but that I think we can all agree will not add up to more than $15K a year).  The post was long already, was trying to make it not insane.

On the "delivery miles are hard", I do not drive in a city.  I am in a low traffic area (compared to what I think most people think of such as Chicago, LA or NY where most of this activity happens) and I have two highways that run through my delivery region and are about 3 miles apart so I usually use one of the other on every delivery.  The stop, start, sitting in traffic is much less than when I lived in Chicago and just drove let alone did something like delivery.  If I was operating there, I would be more concerned and honestly I would hate it and would not do it.  Part of why I can make the higher dollars per hour is because I am NOT in an area like that, so I get paid for more miles by the delivery app and still get to a 15 mile delivery in the same time a <5 mile delivery would take in another market.  Yes, that impacts the car, but I am not driving an hugely expensive vehicle as some others had suggested.  When I repalce this vehicle it will be with a higher mileage Honda or Toyota as I said which will increase by average gas mileage from 27ish that I get to well over 30 mpg. 

Also with are well above the standard deduction each tax year even with the higher level.  The caps on mortgage interest etc have meant we leave things on the table but the self employment deductions are almost fully used for my wife already so this will increase that level.  I may find in actuality I am wrong but then I will only have been at this endeavor for a year or so and learned my lesson with a small case study.

For me this an experiment to see if I am better off than I was not doing it.  Right now I enjoy it, I get to drive around in the country and enjoy the wonderful scenery in our area and make some money while I do it.  I would never make this my full time job other than to plug an significant employment gap as I also think part of why this works better for me than most (and also why the models are hard to apply apples to apples) is that I select the times I go specifically because I have optimized when the best orders exist in my area.  Someone doing this more "typically" is just out waiting for orders.  I do not do that.  I go during the hot time when tips are highest and supply is best and as soon as things turn down I shut down for the night rather than drive around incurring expense and taking more time and diluting my hourly earnings.  I get this is a special snowflake example and I am likely less special in my usage than I think.  My acceptance rate is nearly 100%.  I have found that makes more money.  I can do that because I am not in a congested area where a long haul would take 2 hours in rush hour traffic.  Our city space has virtually no times when the freeways are stop and go (other than accidents which are also rare), so I can get anywhere very fast.  That also means I am almost never waiting for an order as they apps just send them one after the other because the acceptance rate is high.  In talking with other  drivers I am certainly an exception as most of them turn down quite a bit.  I just see no reason to do that, as if you turn things down you can wait 10 minutes for another order to arrive and that means 10 minutes of my 90-120 targeted minutes are spent doing nothing.  Why?

I do appreciate all the discussion.  It is helpful for me to think about, and it seems the sharing is helping others who are thinking about it. 

[StashingAway]

For me this an experiment to see if I am better off than I was not doing it.  Right now I enjoy it, I get to drive around in the country and enjoy the wonderful scenery in our area and make some money while I do it.  I would never make this my full time job other than to plug an significant employment gap as I also think part of why this works better for me than most (and also why the models are hard to apply apples to apples) is that I select the times I go specifically because I have optimized when the best orders exist in my area.  Someone doing this more "typically" is just out waiting for orders.  I do not do that.  I go during the hot time when tips are highest and supply is best and as soon as things turn down I shut down for the night rather than drive around incurring expense and taking more time and diluting my hourly earnings.  I get this is a special snowflake example and I am likely less special in my usage than I think.  My acceptance rate is nearly 100%.  I have found that makes more money.  I can do that because I am not in a congested area where a long haul would take 2 hours in rush hour traffic.  Our city space has virtually no times when the freeways are stop and go (other than accidents which are also rare), so I can get anywhere very fast.  That also means I am almost never waiting for an order as they apps just send them one after the other because the acceptance rate is high.  In talking with other  drivers I am certainly an exception as most of them turn down quite a bit.  I just see no reason to do that, as if you turn things down you can wait 10 minutes for another order to arrive and that means 10 minutes of my 90-120 targeted minutes are spent doing nothing.  Why?

This is interesting. I am now curious at what you come out at on the year-end! Seems that you are keeping track and documenting well. It would be interesting for me to see how different your experiences as an "optimized side hustle" differs from those who are more full-time about it. Seems that there is more room than I had originally thought to come out on top. Kind of a catch-22 of a deal, in that the more that someone relies on it for the money, the less money they can make doing it.

[caracarn]

For me this an experiment to see if I am better off than I was not doing it.  Right now I enjoy it, I get to drive around in the country and enjoy the wonderful scenery in our area and make some money while I do it.  I would never make this my full time job other than to plug an significant employment gap as I also think part of why this works better for me than most (and also why the models are hard to apply apples to apples) is that I select the times I go specifically because I have optimized when the best orders exist in my area.  Someone doing this more "typically" is just out waiting for orders.  I do not do that.  I go during the hot time when tips are highest and supply is best and as soon as things turn down I shut down for the night rather than drive around incurring expense and taking more time and diluting my hourly earnings.  I get this is a special snowflake example and I am likely less special in my usage than I think.  My acceptance rate is nearly 100%.  I have found that makes more money.  I can do that because I am not in a congested area where a long haul would take 2 hours in rush hour traffic.  Our city space has virtually no times when the freeways are stop and go (other than accidents which are also rare), so I can get anywhere very fast.  That also means I am almost never waiting for an order as they apps just send them one after the other because the acceptance rate is high.  In talking with other  drivers I am certainly an exception as most of them turn down quite a bit.  I just see no reason to do that, as if you turn things down you can wait 10 minutes for another order to arrive and that means 10 minutes of my 90-120 targeted minutes are spent doing nothing.  Why?

This is interesting. I am now curious at what you come out at on the year-end! Seems that you are keeping track and documenting well. It would be interesting for me to see how different your experiences as an "optimized side hustle" differs from those who are more full-time about it. Seems that there is more room than I had originally thought to come out on top. Kind of a catch-22 of a deal, in that the more that someone relies on it for the money, the less money they can make doing it.

From my experiences thus far I would totally agree with your last statement.  IF you rely on it for you main income you are forced to stick with it all day and there are huge gaps of the day when nothing is happening, but the way the apps work they encourage you to drive to a "hotspot" and then maybe you will get an order.  It becomes a lot like fishing with a fish finder.  Both GrubHub and Doordash have heat maps that show you if there are orders in your area.  So just like a fish finder shows you dots that are fish, does not mean casting your line will get a fish to bite.  In the same way just because Doordash says your area is Busy does not mean that you are the closest driver or there are enough orders for all the drivers signed on.  So you would spend a lot of time just driving around hoping to get close enough to an order that it bites in your app (maybe I pressed the fishing analogy too far?)  This means a lot of miles and time with no income to offset your expense.  I have figured out which times in my area are the best.  For example orders die down between 7-8 PM.  Also heading out for less than an hour is almost always a losing proposition because you may only get one order done if you get one that is over 10 miles of delivery for example, so I will not head out unless I have 90 minutes or more before 7.  There is no lunch rush in my area on the weekends (which is the only time I can drive around lunch due to my regular job), and going out before 4:30 PM is very sketchy.  I have also found that looking for addresses after it gets dark wastes a ton of time and so as the days shorten so will my window, but I should still be OK until about 7 so my model is likely to remain intact.  I also keep an eye out for shifting trends.  I make a killing with Instacart for about 6 weeks (easily exceed $300 in 10 hours or less and this gig has much less driving so your expenses stay down) but then orders dried up and you could get one good shop in and then nothing or orders around $10 exist.  Given that you can typically not shop and deliver even the smallest order in less than 45 minutes the hourly return is too little, so I will do things like grab an Instacart order at 9 AM on Saturday when orders drop and then switch to GrubHub or Doordash for the trip home and snag one or two deliveries at early lunch.  Also holidays are a disaster as the lines are too long.  I made the mistake of trying to run on both Easter and Mother's Day and that was enough for me to modify my script and exclude holidays as I had orders both days where the wait was over 2 hours and the restaurant might not be able to make the food (this is certainly COVID anomalies but will never try a holiday again until restaurants are fully back to normal). 

Another thing is GrubHub has what are called Place and Pay orders and from what I see on the boards most drivers refuse these as they think it is too much.  Basicaly what than means is the restaurant is not in the GrubHub system and therefore the driver calls or arrives at the restaurant and orders as if they are the diner (you do not say you are with GrubHub).  GrubHub pays you more for these orders because of the extra work and if you have any ability to organize you can make these work just as fast as regular orders.  I will usually call as soon as I get the order  so that my drive time to the restaurant allows them to make the food.  If the time they give me is excessive (some weekends it can be an hour) I turn on Doordash and grab an order or two in that time, so I am constantly working to fill every minute with something I am getting paid for.  I do believe that makes a huge difference.  You have to be good with the apps and your phone to not lose an order because you had one app minimized and the timer ran out for example.  But using this method I have had two weekends in a row where for that hour I made $40 - $50+ because of running both together. 

So what I am doing is skimming the cream off the top for certain because I am likely putting far more optimization thought into my activities rather than just heading out when I have free time.  Being as Mustachinan though I find this type of gaming the system a thrill, so I keep looking for other ways to maximize the return. 

I will keep updating for those who are interested and certainly welcome any observations of what you all see, as we can certainly be blinded by thinking what we are doing is great because we thought of it. 

I do feel that my drive to press it has gone down a bit with the warmer weather.  For example, Friday night (tonight) would normally be a sure thing, but I am just not feeling it right now and storms are rolling in so I may stay home, which will lower my weekly earnings for certain.  In the end I will be able to keep sharing what my hourly earn is and then can run up my expenses for the year as well.  This week I have been out for 1.5 - 2 hours and made $58.34. 

[Paul der Krake]

So what I am doing is skimming the cream off the top for certain because I am likely putting far more optimization thought into my activities rather than just heading out when I have free time.  Being as Mustachinan though I find this type of gaming the system a thrill, so I keep looking for other ways to maximize the return. 

This, right here, is gig work done right. Providing "liquidity" in times of demand, on your own terms and schedule, and getting fairly compensated for it.

[trollwithamustache]

Ahhhh car mileage. Lets step back folks.

What goes into the IRS mileage number?  It is a National AVERAGE of:

fuel costs
Insurance costs
Maintenance costs
DEPREICIATION.

Again, these are national averages. OP's modest mobile, the F-150 next door, the Prius down the road, the new Audi in your neighborhood, The hanyman next door's GMC 2500 Duramaster diesel blaster.  2019 average new car fuel efficiency was 24.9 according to professor google.

The more of these categories you can ride under the average of, the more $$ you can make with the standard deduction.  OP is getting up to speed on that and tightening up his accounting like any good businessman.

At a minimum OP is now depreciating his cheap car at national average, which is favorable to him.

Or, he is not making money in his business to get things that are useful to him for free or partially free.  He should be writing off some phone costs too against his earnings, further shrinking them. Does that write off make the door dash work less? some here have made statements to the effect that it does!

[reverend]

This, right here, is gig work done right. Providing "liquidity" in times of demand, on your own terms and schedule, and getting fairly compensated for it.

That's the benefit.  I just heard a local company pays $14/hour to anyone to sit at home on the phone to do contact tracing for COVID.  No driving at all. I didn't think it was for me, but I wonder if that's something where one could do just a few hours a day (say, 2 hours/day after work) for a few extra dollars, or a few hours on weekends.

It seems like an easier thing than to try to game bonuses on delivery apps and deal with driving and other people.  Of course, I'm lazy, so that affects my judgement here. :D

[caracarn]

This, right here, is gig work done right. Providing "liquidity" in times of demand, on your own terms and schedule, and getting fairly compensated for it.

That's the benefit.  I just heard a local company pays $14/hour to anyone to sit at home on the phone to do contact tracing for COVID.  No driving at all. I didn't think it was for me, but I wonder if that's something where one could do just a few hours a day (say, 2 hours/day after work) for a few extra dollars, or a few hours on weekends.

It seems like an easier thing than to try to game bonuses on delivery apps and deal with driving and other people.  Of course, I'm lazy, so that affects my judgement here. :D

To be clear I am not doing anything with bonuses.  If they occur (which is rare in my area) they are truly a bonus and may get me to adjust my behavior if I was already going out.  For example GH one weekend added $25 to every 5 deliveries (so a $5 bonus per delivery which is about a 30% bump) so I stayed out a bit longer to get the 5 deliveries, but otherwise what I am doing is being aware of the best times when I can go and only going out then.

This is not foolproof.  For example this week so far is a great example.  Normally 5:30-7 has been guaranteed to be one order after another and good ones.  Monday and Tuesday I have been waiting and orders are sub $10 many times.  So instead of the $100 I would normally have made so fat, I have made $75.

[Catica]

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!

I deliver for Instacart on a bike. The good thing about Instacart is that you get to choose the batches you want to do.  So I only pick small batches from small stores such as pharmacy.  A pharmacy is small enough to shop quickly and people usually get 3 or 4 items, and the items are usually small so it's really easy to carry them on a bike. Works for me.  I only do it when I have a bit of time to spare in between other things. Got $130 this week for an exercise.

[iris lily]

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!

I deliver for Instacart on a bike. The good thing about Instacart is that you get to choose the batches you want to do.  So I only pick small batches from small stores such as pharmacy.  A pharmacy is small enough to shop quickly and people usually get 3 or 4 items, and the items are usually small so it's really easy to carry them on a bike. Works for me.  I only do it when I have a bit of time to spare in between other things. Got $130 this week for an exercise.

If Pete, Mr. Money mustache, gave out gold stars he would give you one!