Your thoughts on the gig economy

[LivingAlmostLarge]

I think it's people not fully understanding what it is costing them to do these gig jobs. They don't realize they have to pay the full 15.3% Self employment tax and when tax time comes their bell is rung. They only see the immediate money. Which is great in a short term or if you know how to truly make money with Uber/lyft or grocery shopping etc. But for the average worker? I bet they figure it out real fast they are spending more in gas, wear and tear etc. They would be better off getting a second job if they really need money. It ends up being like a couple bucks an hour.

But people think they are making money. But would these companies be doing it if they weren't making a profit?

And I 100% agree wtih ua_guy that people are deluding they are making enough.

[riverwed070707]

amarowsky beat me to it. I agree. A PT job is typically a set arrangement with an employer to work a certain number of hours on some predetermined schedule and possibly at a specific location. When I did Urgent Care part time, for example, I was contracted for 20 hours/week and I got my schedule several weeks in advance. I couldn't just wake up in the morning and say, "I think I'll work at Urgent Care today". I also couldn't wake up and say, "It's a beautiful day. I think I'll go to the zoo instead of working today".

As a gig worker, however, I could wake up and say, "Gee, it's going to rain all day. I don't feel like driving my Uber around in this weather. I'll skip today".

Now a "side hustle" is much more akin to a gig job if you are in control of when and where you work. Then it's just a difference of nomenclature.

I actually wouldn't classify some of the things riverwed listed as being "gig economy" jobs. Those are typically one and done sort of things. Being a wedding planner is a commitment of time and energy that I imagine goes on for months or more at a time. Yes, you may decide when to accept a job, but once you do, you have to give it the time and effort it requires over an extended period. In contrast, if I hired myself out to videotape a wedding, I'm signing up to work one specific day for a few hours, plus the post production stuff which I can largely do on my own schedule within whatever delivery deadline I've determined.

I never really thought about it but the medical surveys I used to do qualified as a gig job. I signed up for the survey panel for a couple dozen companies. They would send me invites every day and I would decide which ones I wanted to do. If I was having a really busy week, I might only do a couple or none at all. If things were slower, I might do a few each day. At my peak a few years ago, I earned over $1,000/month doing that. Once my job situation changed and I didn't really need that money anymore, I just stopped. I didn't have to quit. I didn't have to tell anyone. I just stopped responding to the invitations because I was completely independent in the process.

I thought as I was typing it that I'm not sure I would classify landlording or my welcome packets as gigs because there is a level of commitment to both that can't just be passed off. Even with the consulting and social media marketing I do, once I agree to do it, its a multi-month commitment for a certain number of hours each week and probably also isn't technically a gig. I do however definitely classify my event stuff as gigs. The weddings I do, I only offer "day of coordination" which entails about 10 hours of work leading up to the event and then 10-12 day of. While I couldn't wake up in the morning and decide to go to the zoo instead, I do choose my schedule and have minimal time commitment for each event. Most common job i think of when I hear the term is musicians - events are no different than a band booking a "gig" and having a contractual agreement to show up.

[amarowsky]

I think it's people not fully understanding what it is costing them to do these gig jobs. They don't realize they have to pay the full 15.3% Self employment tax and when tax time comes their bell is rung. They only see the immediate money. Which is great in a short term or if you know how to truly make money with Uber/lyft or grocery shopping etc. But for the average worker? I bet they figure it out real fast they are spending more in gas, wear and tear etc. They would be better off getting a second job if they really need money. It ends up being like a couple bucks an hour.

But people think they are making money. But would these companies be doing it if they weren't making a profit?

And I 100% agree wtih ua_guy that people are deluding they are making enough.

This is true for your income. But you get to write off your miles to, with, and back home from a fare. So you honestly get to write off MORE than you are making (in some instances). It will show closer to Small taxes on Small gains overall. So Even though I should be taking home a decent amount of money on the side it will be off set with operating expenses as a contractor and really not come out to very much being taxed @ all.

In fact in my situation, because I resigned early in the year (End of Jan) I have not made very much at all. So If I am only Uber’ing + Gig’ing part time , I don’t imagine I’ll make much to get taxed @ all.

Self employment tax is something that people forget about. Normally your employer pays half of this, so you only notice the ~7.5% hit (SS/Medicare). But 1099 Employee’s are responsible for the 15% SE Tax on their own.

@ $0.58 cents per mile that’s damn near the income you make before tips. So if I’m not mistaken, your basically playing w/ house money. I would imagine the tax bill will be low. Honestly I’m hoping I will have enough to deduct to get above the new crazy 24k standard deductions! (This will be my 1st year filing w/ a k1 from my llc partnership, and we should have an operating loss this year. We are a a RE company). So i may be able to get my losses enough to offset most of my tax bill this year. (I’ll report back if my calculations were wrong. That would be awful to be screwed into not claiming my losses on my business ..)

[LivingAlmostLarge]

Not really. Everyone I've done taxes for uber and lyft even with the write off of .58/per mile hasn't found it to be worth it. The cost of gas and stuff is a lot more. You don't make very much apparently when you are constantly having to wait for fares and hoover. I can see the gig economy being good to make a few bucks fast as needed. But I feel like we've developed an underclass of workers willing to work for any price driving wages even lower. And things like uber/lyft/doordash, etc is also artificially low because it's subsidized by investor money.

[disneysteve]

I feel like we've developed an underclass of workers willing to work for any price driving wages even lower.

That's an interesting comment. I actually signed up for FIVERR a while ago thinking that I might like to do some editing work on the side. I had recently finished editing a book manuscript for a friend and earned about $600 for that job. But then I looked at what people online were charging for editing and I wasn't willing to do it for that amount. Thanks in large part to the internet and apps, it is super easy to find people willing to do or make anything for a very nominal cost.

[amarowsky]

Not really. Everyone I've done taxes for uber and lyft even with the write off of .58/per mile hasn't found it to be worth it. The cost of gas and stuff is a lot more. You don't make very much apparently when you are constantly having to wait for fares and hoover. I can see the gig economy being good to make a few bucks fast as needed. But I feel like we've developed an underclass of workers willing to work for any price driving wages even lower. And things like uber/lyft/doordash, etc is also artificially low because it's subsidized by investor money.

Maybe my calculations are skewed because I'm only counting on the gig income too fill a part time income level. In the neighborhood of 1-2k a month. When people drive full time , i have heard (anecdotally) they can earn in the 50-70k range if they drive full-time and/or overtime.

[~bs]

The reason for the standard mileage rate is it's what the fed government calculates as the average cost of running the vehicle. I would consider actual income to be the amount left over after factoring in the standard mileage rate, any other possible expenses, all taxes etc. After all this is considered, I would expect the actual bottom line income from driving to be closer to minimum wage.



Include gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation (or lease payments) attributable to the portion of the total miles driven that are business miles.

[LivingAlmostLarge]

I have multiple people coming in who think it would be netting the money and quitting after 1-2 months. It doesn't really pay well for the amount of time spent. I can see how it works great as a second job and nothing else to do. But otherwise in some ways it cost more.