4 ms·

How does the math work out on wages once you factor in the vehicle costs (gas, insurance, maintenance, etc...)? Is it higher than minimum wage?

bmelton 11y ago
In America, generally speaking, if you're using a privately owned car for business, the companies pay a mileage rate, which is currently 57.5 cents per mile. That cost is expected to cover the cost of gas and maintenance on the vehicle. I don't know if Uber / Amazon actually DO this, but if so, that mileage fee would be on top of whatever their actual pay rate is.
- ousta 11y ago
  can't you remove this cost from taxes?
  - bmelton 11y ago
    If I'm understanding you correctly -- mileage rate pay is a business expense for which you are reimbursed, and aren't considered pay. They are (I believe) tax exempt.
  - sib 11y ago
    Yes, if you are not reimbursed for the expenses by your employer. In other words, you can either (1) be reimbursed by your employer or (2) deduct the per-mile rate from your taxes, but not both. Subject to certain conditions and limitations.
- mikeash 11y ago
  That's far from universal. Companies can pay mileage, but nothing says they have to. To take a common example, pizza delivery drivers typically pay for all of their own transportation costs, sometimes with a small but insufficient delivery payment from their employer, and sometimes with nothing but a crappy hourly wage. That's why tipping is so important in that case: if you don't tip then it's likely the driver lost money on you, because they'll pay more for gas and maintenance on their car than they earned delivering to you without a tip. I don't think there's anything special about 57.5 cents per mile when it comes to compensating employees, either. That figure is the rate at which you can deduct vehicle-related expenses from your taxes, which doesn't have to be the same as how you compensate your employees. Uber doesn't pay any sort of mileage fee beyond the driver's 80% share. The driver can deduct 57.5 cents per mile driven for Uber on their taxes, thus reducing their tax liability.

bmelton 11y ago

In America, generally speaking, if you're using a privately owned car for business, the companies pay a mileage rate, which is currently 57.5 cents per mile. That cost is expected to cover the cost of gas and maintenance on the vehicle. I don't know if Uber / Amazon actually DO this, but if so, that mileage fee would be on top of whatever their actual pay rate is.

ousta 11y ago
can't you remove this cost from taxes?
- bmelton 11y ago
  If I'm understanding you correctly -- mileage rate pay is a business expense for which you are reimbursed, and aren't considered pay. They are (I believe) tax exempt.
- sib 11y ago
  Yes, if you are not reimbursed for the expenses by your employer. In other words, you can either (1) be reimbursed by your employer or (2) deduct the per-mile rate from your taxes, but not both. Subject to certain conditions and limitations.
mikeash 11y ago
That's far from universal. Companies can pay mileage, but nothing says they have to. To take a common example, pizza delivery drivers typically pay for all of their own transportation costs, sometimes with a small but insufficient delivery payment from their employer, and sometimes with nothing but a crappy hourly wage. That's why tipping is so important in that case: if you don't tip then it's likely the driver lost money on you, because they'll pay more for gas and maintenance on their car than they earned delivering to you without a tip. I don't think there's anything special about 57.5 cents per mile when it comes to compensating employees, either. That figure is the rate at which you can deduct vehicle-related expenses from your taxes, which doesn't have to be the same as how you compensate your employees. Uber doesn't pay any sort of mileage fee beyond the driver's 80% share. The driver can deduct 57.5 cents per mile driven for Uber on their taxes, thus reducing their tax liability.