When you hear the word “Doordash,” what comes into your mind? We’ve seen many people confuse rideshare companies for delivery platforms and vice versa. But do you think they are the same? Is Doordash the same as rideshare? Do they share the same tax system? Read on to find out.
Is Doordash considered rideshare?
You might have been planning to give the rideshare industry a try, by working for them. Maybe you’re finding a hard time choosing between the rideshare and delivery industry and you just decided to hop into anyone Doordash falls in.
Or you just want to book a ride for yourself of which Doordash comes into your mind. Do you think Doordash offers a rideshare service?
While this business model is closely related to the concept behind the Rideshare industry, it isn’t typically the same.
So what is Doordash considered?
Answer: Delivery
But why?
Well, Rideshare is a transportation system where a passenger rides in a private vehicle driven by its owner at a price, typically after making the necessary arrangements through a website or mobile app.
While both Rideshare and Delivery involve;
- Providing delivery or riding services
- Let workers (drivers) use their personal cars to deliver or ride for respective companies
- Allow customers to use mobile app to make orders
However, the Delivery industry doesn’t involve moving “people” from one place to another.
Note that there are some situations where a delivery company could metamorphose into providing delivery and rideshare services. However, this is not the case for Doordash.
Is Doordash considered Rideshare for taxes?
We now know that Doordash is under the delivery niche, but are they considered rideshare when it comes to taxes? Or better still, is the tax system as a Doordash driver similar with the rideshare industry?
Well, they are similar. Of course, Doordash isn’t an under-the-table job, so dashers are required to pay taxes.
But then, Doordash isn’t considered as a Rideshare business in terms of taxes.
Maybe you’re trying to file your tax and you were given the option to choose between several industries, don’t select Rideshare as a delivery driver.
Coming to their similarities as said earlier, here they are;
- They’re treated as self-employed when paying taxes
- They’re both subjected to making tax payments after a driver makes above $400. This includes your normal income and tips.
- As a Doordash or Rideshare driver, you get issued a tax form each year. However, Doordash’s tax form is 1099-Nec whereas Rideshare is a 1099-K form.
- You’re allowed to calculate your car expenses either by your Actual mileage or by the standard mileage rate in the two industries.
- Both Doordash and Rideshare drivers are allowed to make deductions from their taxable income. These deductions may include; vehicle maintenance, repair costs, mileage, and phone and internet bills. Here’s our guide on these deductions.
So how does tax work in Doordash?
Well, it is straightforward.
When you hit $600 in earnings within your time with Doordash, a 1099-NEC form will be sent to you either through PayPal or Stripe, which would be required of you to file.
Here’s a detailed explanation of this on our youtube video:
Now, if you don’t want to pay your taxes on Doordash, there are penalties you’ll be faced with.
Does Doordash have a subsidiary platform dedicated to Rideshare?
We’ve seen how most companies dominating certain industries tend to expand into other related industries.
For instance…
While Uber is originally dedicated to the rideshare industry (of which it leads in the US), you may have also noticed how it also has a branch, UberEats, dedicated to delivering food.
Is there something like this on Doordash?
No. Unlike Uber which is also behind UberEat, Doordash doesn’t have any subsidiary that is dedicated to offering rideshare service.
List of top rideshare companies
Whether you’re a driver looking forward to working in a rideshare company or just someone who wants to get themselves ridden home, below is a list of rideshare companies to take, since Doordash doesn’t fall into that section.
- Uber
- Lyft
- Via
- Wingz
- Juno
- Ziro
- Flywheel
Rideshare vs Delivery: Which should you go into as a driver?
If you’re looking forward to entering into the driving or transportation industry and you’re in the thought of whether Doordash is considered rideshare, you might also want to know between Rideshare and Delivery which is more profitable.
Technically, no one, between the both, can be seen as generally profitable. After all, it is left for the company you work for to decide.
We’d however take a look at this industry considering their pros and cons.
Pros and cons of the Rideshare industry
Starting from the Pros, you have more control of your time, daily activities, and schedule. You become the boss of your own when you get registered to most rideshare companies.
While you’re most likely liable for your insurance cost on most delivery companies, for rideshare companies like Uber you’re covered insurance.
According to Gridwise, the average earning of drivers per hour is 22 per hour, whereas for delivery, it is settled at 15 per hour.
With the help of car rental partners, you don’t have to use your personal cars for rideshare. You can always rent a car for a price, if you wish to.
On the cons…
There are not many options of rideshare companies that perform well, aside Uber and Lyft. This puts you in a tight corner if you don’t live in big cities like Los Angeles or New York City.
You might also not enjoy entertaining strangers in your car, depending on your personality. It’s also worth noting that you’d be stocked in your car all day, with little to no time of having a breathing space where you could even stretch.
Pros and cons of the Delivery industry
On the pros…
You don’t have to pick up strangers in your car daily, unlike in the Rideshare industry. In delivery, you’re only faced with a few interactions with the customers to whom you deliver goods to.
You also don’t get first-hand experience with your customers while on a delivery service like Doordash. The company you work for and it’s network has also closed the deal, yours is to get deliver the goods, food, grocery, etc.
Unlike the rideshare industry where you only have to choose between Uber and Lyft, there are several delivery companies, ranging from Doordash, and Postmates, to UberEats, GrubHub, etc.
On the cons, you could have sometimes when you don’t have goods to deliver, hence leading to a decrease in your earnings. This is traditional but is dependent on the platform you make use of.
Final Thoughts
Again, Doordash isn’t considered a rideshare platform. This is primarily because it doesn’t offer a service that drives people to their location when ordered by a mobile app. This being said, other list of rideshare platforms include; uber, lyft, Via, Wingz, Flywheel, etc.
