FAQ - Driver Self-Employment

Uber and Lyft drivers are considered independent contractors rather than employees. Both companies do not pay Social Security, Medicare, or state taxes for their drivers nor do they pay into unemployment funds. A self-employed driver is required to file as independent contractors on their state and federal income tax returns.

Lenders typically consider Uber and Lyft income as secondary income when processing mortgage applications. Drivers typically list additional work or income from spouses or partners to qualify for mortgages.

Uber and Lyft do not provide health insurance, vacation time, or paid sick leave to their drivers. Each driver is considered an independent contractor who does not qualify for benefits.

Uber and Lyft supply 1099-MISC forms each year to drivers who earned at least $600 in the previous year. The 1099-K form is supplied to each driver who earned at least $20,000 and completed 200 rides or more in the prior year.

The Internal Revenue Service (IRS) and state revenue agencies typically treat tips as taxable income. Uber and Lyft drivers are responsible for tracking tips to provide accurate accounting of their incomes.

Uber and Lyft drivers typically do not qualify for unemployment because they are considered independent contractors rather than employees. These restrictions may vary by state as legislators address driver employment status.

Uber

Uber allows any licensed driver meeting their state’s minimum driving age to work for the company. Applicants must have one year of licensed driving if they are 24 years old and up and three years of licensed driving if they are 23 years old and younger.

Lyft

Lyft requires all drivers to be at least 21 years old at the time of their application with the exception of New York City, which allows people 18 and older to drive for ride-hailing companies.

Uber and Lyft do not list citizenship as a requirement for its applicants. The companies require valid driver’s licenses that can be obtained by citizens and permanent residents with rules varying by state.

Uber

Uber limits each driver to 12 hours of continuous access to the app before requiring a six-hour break.

Lyft

Lyft requires each driver to take a continuous break of at least six hours after 14 hours of continuous driving or access to the app’s driver mode.

New York City’s Taxi and Limousine Commission (TLC) licenses Lyft and Uber drivers to comply with local regulations. Uber and Lyft drivers are required to hold TLC licenses to drive in the city’s five boroughs.