We recently had a driver, Andrew “Andy” Micka, reach out to us about a clever (and lucrative) business he started, which grew out of rideshare driving for Uber and Lyft. When we talk about “working smarter, not harder”, Andy really exemplifies what this looks like. Today, Andy will discuss his business, Arrivals with Andy, what he did to grow it, and tips for other drivers who’d like to diversify and increase their incomes as well.
Uber and Lyft started me out on the journey I’m on, working 100% for myself through contractor services, and eventually starting my own company, Arrivals With Andy, LLC. I left my decently-paying, full-time, Monday-Friday sales job to pursue this new career path, and I’d like to share my successes, failures, accomplishments, and goals, in hopes of helping them along their own journey – whether it be a part-time gig or, like me, a full-time career transition.
I believe in excellent, but simple, customer service – after all, that’s what we’re doing here, isn’t it? Providing a customer service. Being kind to people, empathetic to any problems they’re having, and doing other simple things like helping them load and unload luggage or groceries, assisting them with installing and removing a carseat, and all-in-all just providing a total service that leaves them a little happier when they leave my car than when they entered.
Arrivals with Andy, LLC: What I Did NOT Do
First, I need to mention a couple extremely critical things that I don’t do, and why you shouldn’t either:
I do NOT just outright hand out business cards and try to steal customers from Uber or Lyft – I wait until the customer presents a problem or frustration (like what I call the “rideshare time frame pickup gamble” where they must try to figure out how far in advance or close to their actual needed pickup time) or, as it happens most times, when they ask me directly if I can give them rides outside of Uber or Lyft.
Not only is this against Uber and Lyft policies to outright do this without provocation or request, passengers don’t like overtly being advertised to while taking a ride.
I do not do pickups FROM the airport as it requires a LOT more insurance, and additional licensing from the airport authority to do pickups from the airport. In Indiana, it is quite literally illegal to do so without the proper licensing and vehicle insurance.
Starting Arrivals with Andy
Originally, I started the company just as a means to take advantage of all the tax deductions available to businesses through the IRS. Deductions are extremely helpful, as you know, and after spending a whopping grand total of only $96 in fees, I was able to become a business with an EIN/TIN number with the IRS and EIN with the state of Indiana, which allowed me a much simpler way to track and count those deductions. And, as a business, it’s only my PROFIT that is taxed, whereas if I was getting paid personally, it would be all of the REVENUE that is taxed.
Editor’s Note: Sole Proprietors and LLCs are both taxed as pass-through entities so the tax treatment is exactly the same and you can take advantage of all the same deductions regardless of your tax structure.
This process was very simple at the beginning, while only providing services for existing companies such as Uber, Lyft, WeGoLook, Amazon Flex, etc. The only “extra step” I had to take was finding the best car insurance company that offered the best coverage vs. cost. Thanks to the Rideshare Guy’s article regarding State Farm’s rideshare coverage, I have now been with them for about one and a half months.
What makes State Farm stand out is that, while remaining not only competitive with, but considerably cheaper than, most other insurance companies – they operate as the primary insurance (not secondary or even not at all, like most other companies) while rideshare driving. The only caveat is that while you are on your way to a passenger, or while you have that passenger in your car, they are secondary on liability – however, they still cover as primary for all other vehicle claims at all times.
Editor’s Note: If you are a private driver, like Andy is, you may need commercial rideshare insurance instead of a rideshare endorsement. Currently, State Farm’s rideshare coverage only “extends coverage from your personal auto policy to cover you when driving for a Transportation Network Company (TNC), like Uber or Lyft” – meaning you are not covered if you are driving off the TNC platform (i.e. a private driver). Please confirm what type of coverage you need with your auto insurance policy if you decide to pursue being a private/commercial driver.
Becoming a Private Driver
How did I get to the point of offering private rides and expanding my company to become more than just a means to a more sound financial end? Easy! People asked me if I could do it. In short – people love riding with me. I have a 4.98 driving rating on Uber, and a 4.92 average driver rating on Lyft.
What’s the big selling point of my company? The ability to schedule your ride ahead of time. You don’t have to worry if your Uber/Lyft will be there in time, you don’t have to order it way ahead of time and risk getting to your destination disgustingly early or, even worse, late.
Aspects, benefits, and considerations of my business:
- Did I have to register as a taxi? No. For all the cities I drive in, a taxi company is defined as a company with 20 or more livery vehicles – I’m only me with my one car. Be sure to check the laws and regulations in your city/state, as they vary greatly.
- Did I have to register as some other kind of business? Yes. I had to register with the Motor Coach division of the Indiana Department of Revenue. My application is still pending (takes up to 6 months) but you are temporarily allowed to provide passenger services while the application is pending.
- What about insurance? – because I’m not defined as a taxi company, I am not required to obtain commercial insurance, which is quite expensive. I have a 15-year spotless driving record, and a commercial policy for livery would cost me in the neighborhood of $4000-5000 per year, depending on coverage limits, whereas State Farm with Rideshare coverage costs me about $2,160/year.
How do you track your finances?
- I use QuickBooks Online (not QB Self-Employed) which allows me to fully detail out any and all expenses. My account also shares with my accountant, who can do a review when and if necessary, or at my request.
- I use SyncPayments as my merchant services provider, and a Clover Flex for mobile payments. The Clover Flex is WAY more than just a credit card processor – it’s a total mobile merchant solution that deserves a standalone article on this site
- I have a business bank account through PNC, which gives me up to 9 additional free accounts, so I use those to separate out taxes, a vehicle maintenance “savings” account (no interest gained here, simply a small amount I deposit every time I get paid to save for maintenance and repairs), and a reserve account (basically another “savings” account)
- I keep track of my vehicle expenses, including mileage, in an excel spreadsheet in order to figure whether the straight mileage deduction or the itemizing will provide the biggest deduction – so far, straight mileage is way above and beyond the better deduction.
Available Tax Deductions:
- Financial: QuickBooks Online monthly fee, accountant fees, bank fees
- Advertising: Any type of advertising done, business cards, branded apparel, marketing costs
- Website costs
- Vehicle: Insurance, gas, maintenance, repairs, interest paid on vehicle loan (not principal), vehicle depreciation.
Note: you must keep a spreadsheet of all vehicle costs, including mileage – only the business use percentage of the vehicle(s) is a valid deduction. For example: If your yearly vehicle cost, not including loan payments toward the principal, is $10,000, and the business use of your vehicle is 75% (25% being personal use), then only $7,500 (25%) of the costs are tax deductible.
- So far, I have only used Facebook promotions, but it is relatively cheap and works pretty well
- I have networked with a few local businesses, specifically vehicle repair shops, to hand out my business cards. I’ve gotten a handful of rides this way, and word-of-mouth spreads it even further
- I have very nice, high-quality business cards through VistaPrint that I hand out to everyone I can
How do I come up with rates and fees for passengers?
I used Uber’s non-surge and Lyft’s non-prime time rates as a guide for my rates. My rates, however, are constant (aside from holiday or severe weather surcharges), so they actually become cheaper than Uber/Lyft when they surge. You can use an app like Bellhop to see how much an Uber/Lyft ride in your area will cost.
My selling point is the passenger’s ability to schedule ahead of time, and feel confident that they’ll be picked up when they need picked up, and don’t have to do the rideshare “gamble” I mentioned earlier
Related article: Essential gear every rideshare driver should have
Why no pickups FROM the airport?
It costs an additional $500 per year to the Indianapolis Airport Authority to be a permitted commercial passenger vehicle. The Indianapolis Airport Authority not only requires commercial insurance (which is $200 or more of an increase to my existing insurance), but also requires that the airport be listed as an “additional insured” for $1.5 MILLION in liability coverage, which would increase that commercial insurance by about another $100 per month.
In essence, it’s not financially feasible for me to do pickups from the airport under my company name. It would cost me, at a minimum, an additional $4100/year, which means I’d have to do roughly 115-125 rides just to break even on the base cost.
And yes, it’s weird – there’s no additional requirements to drop passengers off at the airport – it’s only if you’re picking them up.
Being Your Own Boss
There is a LOT to owning your own company. Research, time, money… lots of money to start up. But, in the end, it’s worth it. Be your own boss, create your own schedule, do what you want to do and only what you want to do, and when you want to do it. Decide your future for yourself.
Learn more about protecting, growing and profiting from your business with FinCon.
Readers, what kind of questions do you have for Andy about his business? Let us know in the comments!
Andy Micka, a 36-year old Hoosier, has been a resident of Indianapolis for 22 years. He’s a “people-person” and has been told by many that he has “never met a stranger.” Andy is always looking for ways to improve both upon himself and his future, which has ultimately led him to start his company, Arrivals With Andy, LLC, and chart his own path. Although single with no kids, he does have a fur baby, “Sis” – a purebred Miniature Pinscher. Andy’s favorite personal quote: “Failure is only one of the many steps in achieving success.”
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-Andy @ RSG