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Mileage Tracking for Gig Economy
Only 56% of delivery drivers track their mileage for work
Food delivery has been around for a while, but the rise of modern platforms coupled with COVID-19 safety concerns have grown the popularity of food delivery services immensely. Just since 2017, the global revenue for online food delivery has nearly doubled. And by 2024, it’s expected to reach around 97 billion U.S. dollars worldwide, according to Statistica.com.
With a heightened demand for food delivery, more drivers are needed in order to complete the growing amount of orders. As new drivers sign up to work for DoorDash, Uber Eats, GrubHub, Instacart, and so on, they are often unaware of helpful tips and tricks — like enhanced location data and mileage tracking apps — that will help them make more money.
Mileage tracking may sound like tedious record-keeping, but technology’s made it easy for drivers. With multiple free apps available, drivers should no longer miss out on the tax deductions offered through accurate mileage tracking.
Benefits of recording business miles
The main reason drivers should track their mileage is for tax deduction purposes.
Delivery drivers watch their mileage climb up and up every work day. Gas and car maintenance costs add up quickly. Tax deductions help ease the burden of these costs and increase their financial gains while working as a gig driver.
Unfortunately, not that many drivers take advantage of mileage deductions. In a survey conducted by One Hundred Feet Inc., 1200 delivery drivers were asked if they track miles for work. Only a little over half (56%) answered yes. Of those who do, a mere 60% use an app to track their miles, while 40% depend on Excel or paper logs to keep an organized record.
Drivers who rely on manual methods of tracking their mileage spend time organizing and recording their miles when they could have an app do the work for them. Mileage tracking apps also prevent drivers from accidentally misplacing or losing their record.
How to get the biggest tax deduction
There are two ways a driver can calculate their work-related vehicle costs: standard mileage rate and actual expense.
To know which deduction is best, a driver should calculate both and see which one gives them the biggest tax deduction. This should be completed every year as some years actual expenses will produce a larger tax deduction and in others the standard mileage will be more beneficial.
1) Standard mileage rate
The standard mileage rate hinges on the yearly rate set forth by the IRS. For 2021, the IRS allows a 56 cents claim per business mile driven. That means that for every 1000 miles driven, $560 can be deducted from a driver’s taxable income.
The standard mileage rate deduction is a straightforward and easy way for drivers to save money during tax season. One GrubHub driver on Reddit said:
I average 40–50k miles/year This industry only makes sense after you take your mileage deduction at tax time. It’s 50+ cents per mile. So if you have a $10,000 car and get 100k miles out of it, you get $50,000 in tax deductions.
2) Actual expense
The second method of calculating a mileage deduction is a bit more complicated than the first. The actual expense method requires drivers to figure out all the money they’ve spent in order to operate their vehicle for work purposes.
While this is not a comprehensive list, some actual expense costs a driver can include are:
- Lease payments
- Oil changes
- Tire rotations
- Auto insurance
- Title, licensing, and registration fees
- Vehicle depreciation
- Brake pad replacements
- Other various maintenance work
Once these costs are added together, a driver must decide the percent of time they use their car for work vs personal use. That percentage is then multiplied by the total amount spent on operating their vehicle. To read more about how to perform this calculation, visit Turbotax.com.
It’s important to note that the IRS requires proof of receipts, mileage logs, and other documentation for anything used when determining deductions.
Keeping an organized record of expenses can be challenging, especially for the actual expense method. But, thanks to technology, tracking mileage is easier than ever.
Best app for mileage tracking
There are several free apps available that help drivers accurately track their miles. Due to this, drivers should select an app that also works to boost their delivery performance.
An example of an app that serves to track miles while also improving a driver’s work performance is called Beans Maps for Apartments.
Beans Maps provides users access to millions of apartment maps across the U.S. and will navigate drivers to within 10ft of a delivery’s location. Powered by HyperTrack’s advanced location tracking solution, Beans helps track mileage with minimal battery and data usage. This app helps drivers make better tips and complete more deliveries a day by providing straightforward navigation all the way to a delivery’s front door. Beans Maps also directs drivers to the best place to park and enter a complex in order to reach the unit in the shortest amount of time.
“Our products are used by thousands of gig economy drivers daily,” said Nitin Gupa, Founder of One Hundred Feet Inc. — the company that made Beans Maps for Apartments. “We conduct annual surveys to analyze new trends. The percent of drivers tracking mileage has grown by about 8% year-over-year, but there is still a huge gap. And that’s what we want to help drivers with.”
As the only app currently on the market that provides free enhanced data location to drivers, the addition of automatic mileage tracking makes this a highly useful app for gig delivery drivers.
For more information about Beans Maps for Apartments, please visit www.beans.ai or download the app with the appropriate link below.