2018 was the year in which Australian Taxation Office (ATO) planned to increase the control of claims for work related car expenses.

This is a good enough reason to go over your tax claiming practices and make sure you are 100% squeaky clean for 2019, and beyond.

Why is this particular type of claim under the magnifying glass of the ATO?

According to Kath Anderson, the ATO assistant commissioner, the reason is the unusually high percentage of work related car expenses claims during previous years.

Anderson told The Australian that more than 40 per cent of all work related deductions were car expenses. This adds up to billions being drained from the tax system and is clearly why the ATO has chosen to spotlight this issue.

Your solution: Easy 12-week Tracking with GOFAR ATO Logbook App.

In this guide, we’ll explore how you should claim vehicle expenses, methods for ensuring accuracy and compliance, and how to avoid problems.

There are two crucial bits of knowledge you need to take away from this:

  1. ATO has increased the scrutiny of work related car expenses in 2018.
  2. ATO has enhanced technology that will make this more efficient than ever to do.

To keep up with these changes, you need to do two things:

  1. Revise your tax claiming practices.
  2. Use ALL car diagnostics technology at your disposal to accurately track your car related expenses.

“Ms Anderson said enhanced ATO technology made it easier to detect potential tax rorters, ­revealing nearly 3.75 million ­people claimed the expense last year at a cost of $8.8 billion.”

Kath Anderson for The Australian

 

1. Which Work-Related Car Expenses Can Be Claimed?

You can only claim expenses that are work related and that have not been reimbursed to you in any other way. This is the same regardless of whether you drive a company owned, leased or your own car.

The following work related travel expenses fall into that category:

  • Using a car for business related trips, including conferences, but also company-related daily errands.
  • Using a car to load, transport and unload the work related tools and objects that cannot be otherwise stored at your workplace.
  • Using a car to travel between your two workplaces, your workplace and the alternative workplace and your workplace and the client’s premises while you’re on duty.

Watch the Australian Tax Office video to learn more about transporting bulky goods and equipment in your personal car.

These DO NOT include:

  • Travelling from home to work and back.
  • Travelling back to work due to a work-related matter (security call, parent-teacher meeting).
  • Travelling back home after overtime work with no public transportation available.
  • Travelling privately and doing small business related errands like picking up mail on your way.

Let’s repeat this one more time, since it is extremely important – you can claim these expenses only if they haven’t been reimbursed to you by your employer.

“In other words, you cannot claim expenses that have already been paid by your employer, including salary sacrificing arrangements.”

Kath Anderson for Business Insider Australia

Now, let’s just take a quick moment to clear up some details and explain which vehicles you use that can be considered.

You can claim expenses when it comes to:

  • Your own car or a car you leased yourself
  • Your company car or a company leased car
  • Motorcycles and other vehicles that are not considered to be a car

It is clear enough what is a motorcycle, but let’s define what ATO considers to be the “vehicle other than a car”. This includes all vehicles that can carry more than a tonne or nine or more passengers.

These are mini-vans, trucks, panel vans and similar means of transport.

Here is a good illustration of what can and cannot be claimed as ATO car expense.

For example, Michael is a Safety Officer in a factory. His tasks include making sure all the danger signs are positioned and that safety is ensured for everyone in the factory. He is also obliged to go to regular seminars and trainings when needed.

If Michael uses his car to drive to a work-related seminar that his employer asked him to attend, he can claim car expenses.

If Michael drives a company car to work every day, saying that he has to carry danger signs on and off work, the situation is different.

Generally, he cannot claim car expenses for this, unless in the following situations:

  • His employer asked him to carry those signs every day
  • It is, for some reason, impossible to store the signs in Michael’s workplace.

All that has been explained so far is mostly referring to the company employees. To some degree, there are differences in tax claiming if you are claiming taxes as an employee or if you are claiming as a sole trader or as a company.

Those who can claim work related travel expenses are:

  • Companies, trusts and partnerships
  • Employees
  • Sole-traders

As a sole trader, most of the rules above apply to you. You can also claim the following:

  • Fuel, oil, repairs and servicing
  • Lease payments and interest on your car loan
  • Insurance and registration

However, if you work from a home office you can also claim some of those expenses. Again – only if you are driving the car for business-purposes.

For example, let’s say you are an interior designer who works from home. If you are going to a restaurant to discuss business with a restaurant owner and examine the place that needs to be decorated – you are entitled to claim expenses.

If you are going for a dinner and you happen to get approached by the restaurant owner who heard you are a designer and wants to hire you – this is not something you can claim.

If you are going out to meet friends, spot great wallpapers that are perfect for your restaurant project, go in and buy them – but this is still not a business-related expense.

In other words, your purpose needs to be work related in order to be able to claim the expenses.

As a company or a trust, you can claim the following:

Strictly business-related expenses for a vehicle that the company owns or leases, including the costs for providing the car to the employee.

When an employee is given a company car, they can, sometimes, use it for private purposes, as well. In that case, the company may pay for the Fringe Benefit Tax (FBT), which is tax deductible.

As always, if in doubt, contact an accountant who understands Australian tax law and can help you adhere to ATO guidelines for work-related car expenses.

>> Get a logbook app to track mileage


2. What is the Best ATO Logbook App?

The best five car logbook apps, designed for Aussies, and compliant with ATO requirements are:

  1. GOFAR ATO Logbook App
  2. Vehicle Logger
  3. Driversnote App
  4. ATO Logbook
  5. Driver Direct Logbook

Features – At A Glance

Top five vehicle log book apps, hand-selected by our expert team, so you can compare logbook features at a glance.

FeatureGOFARVehicle LoggerDriversnoteATO LogbookDriverDirect
ATO Compliant YesYesYes: Paid onlyYes: GPS tracking or manuallyYes: GPS tracking or manually
Logbook Mileage TrackerYesYesYes: Paid onlyYesYes
Monitor Car HealthYes: Car Fault AlertsNoNoNoNo
Fuel SavingYes: 10-30%NoNoNoNo
Reduce CO2 EmissionsYes: Driver Behaviour FeedbackNoNoNoNo
PricePaid: GOFAR
FREE: iTunes
FREE: Android
FREE: AndroidFREE: iTunes
FREE: Android
FREE: iTunes
FREE: Android
FREE: iTunes
FREE: Android
Ongoing CostsNoYesYesNo No
Lifetime UpdatesYesNoNoYes Yes
CompatibilityApple iOS
Google Android
Android onlyApple iOS
Android
Apple iOS
Android
Apple iOS
Android

3. Calculating Your Deductions

There are two methods to do this: cents per kilometre method and the ATO logbook method. To decide which method to use, you first need to determine whether you drive over 5,000 kilometres a year for business or not.

If you don’t – use cents per kilometre method.

If you do – use the ATO logbook method.

Australian Government Taxation Office car expenses infographic
Click the image to view the whole infographic

Knowing what you can and cannot claim is the first step of your road toward neatly and tightly done taxes. The next step is to understand how to calculate your deductions.

Here are some more detailed explanations about both of these methods that are recommended to calculate work related travel expenses in 2018.

Cents per Kilometre Method

Standard rate per kilometre is 68 cents. This rate includes all the expenses of your vehicle, including depreciation. To calculate your claim value, you multiply the 68c amount with the total of business kilometres travelled.

While you don’t need written evidence, it is important that you can explain and support your calculations during a possible audit.

Using a good and reliable ATO logbook app such as GOFAR is the most convenient way to do this.

Here is an example of this type of calculation, only with the old price per kilometre, which was 66 cents:

“Motor vehicle tax receipt exception: ‘set rate per kilometre method’ 66c per kilometre x up to 5,000 kms.
You must be able to work out your estimate by using a diary or regular pattern of travel.
This means that the maximum claim using this method will be 66c x 5,000 kms = $3,300.

Example:
James is a carpenter and carries bulky equipment to and from work as there is no secure lock-up on site. James has kept a log book for 12 weeks which shows his work travel is 95%. James purchased a Toyota Hilux which has a 2-litre engine on 01/07/2011 for $25,000 which he financed through a hire purchase chattel mortgage at an interest rate of 9%. His odometer reading on 30 June 2016 was 25,000 kms and his car does 500 kms on a 55-litre tank of petrol. The average cost for petrol in QLD was $1.25 per litre.”

David Douglas Accountants

Here is more valuable information from Thompsons Australia which will help you keep on track when using the cent per kilometre method:

“Business kilometres under the cents per kilometre method is determined by ITAA 1997 s 28-25(3). These are kilometres the car travelled in the course of:

  • producing assessable income, or
  • travel between workplaces.

The idea of “reasonable estimate” does not have any further clarification in the tax law and takes its ordinary meaning. From a practical perspective:

  • irregular work-related travel would need to be specifically listed down in a written record, and
  • regular work-related travel (say between two work sites) may be calculated with reference to the number of trips made.

The written evidence of business kilometres travelled for an income year under the cents per kilometre deduction must be retained for five years. There is no need to lodge it with the income tax return, however, details relating to the calculation will be the initial question asked by the ATO in a review.”

Logbook Method

You should use the ATO logbook method if you exceed the 5,000 km limit.

It means you need the best ATO logbook app, like GOFAR and a way to track all your work related car expenses.

Now, let’s get into the details of your ATO logbook.

Here is what it needs to contain:

  • Precise time of ATO logbook start and end, with included odometer readings
  • The total sum of kilometres driven
  • Percentage of business-related drives

You need to do something quite similar to each of your journeys:

  • Precise start and end of the journey, including the odometer readings
  • Total kilometres
  • Reason for the journey

“Your claim is based on the business use percentage of each car expense. This is determined by a log book that must have been kept for a minimum 12-week period, and must be updated every 5 years. Through your ATO logbook you can claim all expenses that relate to the operation of the car, at your percentage of business use.”

H&R Block Tax Accountants

If you have more than one vehicle, keep in mind that the 5,000 km limit is per vehicle and not per person. Still, if you exceed this, it’s time to learn how to do the ATO logbook method properly.

To properly claim your expenses in this way, you need to keep track of all the receipts. The necessary receipts will include those for car maintenance and insurance.

As for the fuel, it can be calculated from the odometer readings. Here is an example of the ATO logbook method from ATO Tax Rates Info.

Example of Logbook Method by ATO Tax Rates Info
Click the image to magnify

4. How to Record Work Related Car Expenses

There are different ways to keep a valid ATO logbook. You can use an affordable GOFAR adapter with an ATO logbook app, a mobile app, a simple spreadsheet or even just pen and paper.

ATO created a basic app themselves. You can see if it works for you and your business:

You can print out the template that was created by the Synectic group and enter your data manually:

Log book print out template by Synectic
Click the image to view the whole PDF

For those that like to keep all their records in Excel tables, here is one that Della & Associates created:

Make a qualified ATO logbook to make sure your tax deductions
Click the image to magnify

However, for those that really want to make this method as easy as possible, they can simply use the GOFAR adapter. It works with cents per kilometre as well and it helps keep valid records.

Once you have your logs all sorted out and ready, visit the ATO website and put them into the online Work-related car expenses calculator.

Here is an example and a neat explanation about how to use the ATO logbook method:

“At the end of the 12-week period the work-related percentage can be determined. To do this, divide your business use kilometres by your total kilometres, then multiply by 100. For example: You’ve travelled a total of 5,000Km; 3,000km relate to work, the calculation is therefore 3,000 / 5,000 x 100 = 60%.

Now that you’ve determined your work-related percentage, it’s important to know what expenses you are entitled to include as part of your claim. These expenses include:

  • The running cost such as fuel and oil
  • Registration
  • Insurance
  • Repairs and maintenance
  • Depreciation
  • Interest on motor vehicle loan
  • Lease payments

Your total motor vehicle expenses are added up and then apportioned based on your ATO logbook percentage. Continuing on with the above example, your ATO logbook percentage is 60% and your total motor vehicle expenses are $10,000 so your deduction will be 10,000 x 0.60 = $6,000.”

Francis A Jones

Also, here is a video created by Ascent Accountants, explaining, step by step, how to use a spreadsheet ATO logbook.


5. History of Tax Rates for Vehicles

The big change in Australian tax return system happened on 1st July 2015. Before this date, there were 4 different ways to your work related car expense deductions. The first two are still in use today.

  • Logbook method
  • Cents per kilometre method

The second two are NO LONGER in use:

  • 12% of original value method – you could claim 12% of the original value of your car, in case your car value is less than $57,466. For leased cars you could claim 12% of its market value from the first time it was leased.
  • one-third of actual expenses method – you were obliged to save written evidence of your fuel and oil costs, or odometer readings, and written evidence of all other car expenses.

Cents per kilometre method was allowed only for those who drove less than 5 000 km a year. For more kilometres, the remaining three methods were used. Only the ATO logbook method could be used regardless of the kilometres driven.

Another change happened in 2016, which affected the cents per kilometre method. Up to 2016, the price per kilometre depended on the size of your car engine. Ever since 2016, it’s been the same for all vehicles.

Year 2018 – 2019 2017 – 2018 2016 – 2017 2015 – 2016
Price per cent 68 cents 66 cents 66 cents 66 cents

Before this change, this is how the prices looked like:

2014 – 2015 Ordinary engine <1, 600cc Rotary engine < 800cc Ordinary engine 1,601–2,600cc Rotary engine 801–1,300cc Ordinary engine >2,600cc Rotary engine >1,300cc
63 cents 74 cents 75 cents
2013 – 2014 Ordinary engine <1, 600cc Rotary engine < 800cc Ordinary engine 1,601–2,600cc Rotary engine 801–1,300cc Ordinary engine >2,600cc Rotary engine >1,300cc
65 cents 76 cents 77 cents
2012 – 2013 Ordinary engine <1, 600cc Rotary engine < 800cc Ordinary engine 1,601–2,600cc Rotary engine 801–1,300cc Ordinary engine >2,600cc Rotary engine >1,300cc
63 cents 74 cents 75 cents
2011 – 2012 Ordinary engine <1, 600cc Rotary engine < 800cc Ordinary engine 1,601–2,600cc Rotary engine 801–1,300cc Ordinary engine >2,600cc Rotary engine >1,300cc
63 cents 74 cents 75 cents
2010 – 2011 Ordinary engine <1, 600cc Rotary engine < 800cc Ordinary engine 1,601–2,600cc Rotary engine 801–1,300cc Ordinary engine >2,600cc Rotary engine >1,300cc
63 cents 74 cents 74 cents
2009 – 2010 Ordinary engine <1, 600cc Rotary engine < 800cc Ordinary engine 1,601–2,600cc Rotary engine 801–1,300cc Ordinary engine >2,600cc Rotary engine >1,300cc
63 cents 74 cents 75 cents
2008 – 2009 Ordinary engine <1, 600cc Rotary engine < 800cc Ordinary engine 1,601–2,600cc Rotary engine 801–1,300cc Ordinary engine >2,600cc Rotary engine >1,300cc
63 cents 74 cents 75 cents
2007 – 2008 Ordinary engine <1, 600cc Rotary engine < 800cc Ordinary engine 1,601–2,600cc Rotary engine 801–1,300cc Ordinary engine >2,600cc Rotary engine >1,300cc
58 cents 69 cents 70 cents
2006 – 2007 Ordinary engine <1, 600cc Rotary engine < 800cc Ordinary engine 1,601–2,600cc Rotary engine 801–1,300cc Ordinary engine >2,600cc Rotary engine >1,300cc
58 cents 69 cents 70 cents
2006 – 2005 Ordinary engine <1, 600cc Rotary engine < 800cc Ordinary engine 1,601–2,600cc Rotary engine 801–1,300cc Ordinary engine >2,600cc Rotary engine >1,300cc
55 cents 66 cents 67 cents

6. Penalties for Fraudulent or Careless Claiming of Car Expenses

Penalties and their amounts depend on many factors. The factors taken into consideration include whether it is a late payment, incomplete payment or a missing payment.

Also, the amount of the taxes plays an important role. And last, but not least, it is critical whether you have knowingly tried to commit a fraud or made a genuine mistake.

The ATO relies on the fact that Australian citizens pay their taxes accurately and on time. However, that doesn’t always happen, so some of the measures to eliminate mistakes have been put to work.

Mainly, they are to fix the issue and, as the last resort, to penalise the taxpayer. These are:

“CPA Australia head of policy Paul Drum said while penalties of up to 200 per cent of tax avoided may be applied under the law, the size of any penalty would depend on the nature of the breach.

“Ordinarily … if a person makes an honest mistake, you’ll have to pay the primary tax, so the tax you avoided plus [interest],” Mr Drum said.

For false or misleading statements, the ATO applies a penalty based on a percentage of the shortfall between the correct tax liability and the amount paid by the individual.

Penalties range from 25 per cent to 75 per cent of the shortfall amount, depending on whether the breach was due to carelessness, recklessness or intentional disregard.”

ABC News

Here are some of the claims that were targeted by the ATO:

“An employee manager claimed $3,800 in work-related car expenses. When we asked the taxpayer to verify that they owned the car and it was registered in their name, we discovered the car was under a novated lease arrangement. Employees who have a novated lease arrangement are not considered to have expenses in relation to the car, as their employer leases the car on their behalf. Claiming a deduction for these expenses is considered double-dipping. All deductions were disallowed and we applied a penalty.”
ATO Media release

“Some examples of the ATO uncovering incorrect claims for work related deductions include the following:

1) A medical professional made a claim for attending a conference in America and provided an invoice for the expense. When the ATO checked, they found that the taxpayer was still in Australia at the time of the conference. The claims were disallowed and the taxpayer received a substantial penalty.

2) A taxpayer claimed deductions for car expenses using the ATO logbook method. The ATO found they had recorded kilometres in their log book on days where there was no record of the car travelling on the toll roads, and further enquiries identified that the taxpayer was out of the country. Their claims were disallowed.”

CS Accountants

7. Most Common Questions about Claiming an ATO Car Expense

First of all, check how much you know about what an ATO car expense is and what can or cannot be claimed:

Eight ATO car expenses quiz

Are you happy with your results?


Let’s look into some of the questions people asked when it comes to claiming their work related car expenses in 2018.

Q: Can I claim my car for work travel?

Answer by RJSanderson:

You can claim your car for travel between your home and your workplace if:

  • you used your car because you had to carry bulky tools or equipment that you used for work and could not leave at your workplace (for example, an extension ladder or cello)
  • your home was a base of employment (that is, you started your work at home and travelled to a workplace to continue your work for the same employer)
  • you had shifting places of employment (that is, you regularly worked at more than one site each day before returning home).

Work-related car and travel expenses also include the cost of trips:

  • between two separate places of employment (for example, when you have a second job)
  • from your normal workplace to an alternative workplace while you are still on duty and back to your normal workplace or directly home
  • from your home to an alternative workplace and then to your normal workplace or directly home (for example, if you travel to a client’s premises to work there for the day).

If the travel was partly private, you can claim only the work-related part. You cannot claim normal trips between your home and your workplace, even if:

  • you did minor work-related tasks at home or between home and your workplace
  • you travelled between your home and workplace more than once a day
  • you were on call
  • there was no public transport near work
  • you worked outside normal business hours
  • your home was a place where you ran your own business and you traveled directly to a place of employment where you worked for somebody else.

Q: What counts as business mileage?

Answer by MJA Business Solutions:

Be aware that the ATO does NOT generally consider kilometers driven between work and home as “business” travel. Even if you stop off to pick up the mail on the way, or have to take multiple trips each day, travel between home and work is still considered private use.

There are exceptions. For example, if your home is your primary workplace and you need to travel to another workplace this would be classified as business use.

Q: If the business owns the car how much can I claim for depreciation?

Answer by MJA Business Solutions:

The business will be able to depreciate the business-use percentage of the value of the car.
It is really important to remember that if you are classified as a small business by the ATO then you will be able to immediately claim the entire purchase price of a vehicle costing less than $20,000 including GST. A good incentive not to buy more car than you really need!

Q: If I’ve got sign writing on the car can I write off the costs for my personal mileage?

Answer by MJA Business Solutions:

Wouldn’t this be nice? Unfortunately, the answer is no. If you put business advertising on your motor vehicle, the actual cost of the signwriting is tax deductible. However, to claim a deduction for the motor vehicle running costs all the normal rules apply.

Q: I am working in Sydney and visit a vendor in Sydney on working day to discuss a business matter is this FBT related Expense? How about a business meal?

Answer by ATO:

f you are paying for your own meals, then it is not a fringe benefit. As meal expenses are generally considered to be a private expense, you will not be able to claim a deduction for your meal, even if it is relation to a business matter.

If your employer is paying for your meals, or reimbursing your costs, this is a non-cash benefit and may require your employer to pay FBT. This will depend on the amount and frequency that your employer is paying for your meals. More information on FBT can be found at Fringe benefits tax.

Q: I’m a subcontractor – every day I pay my own petrol and travel expenses to and between my jobs – however I get this reimbursed back. However – On my weekly payslip it’s under “mobility allowance”. Do I claim this as a part of my income?

Answer by ATO:

As your allowance appears on your payslips, you will need to declare it as part of your taxable income.

You may be entitled to claim certain deductions for vehicle and travel expenses. Please refer to vehicle and travel expenses to see if you are eligible and what you will need to claim these deductions.”

Q: My job requires me to travel frequently for a long distance. As a result, my employer reimburses my fuel expense. However, since fuel expense is only a small part of the operating expense, I am wondering if I could use the cost/kilometre method for claiming car expense.

Answer by ATO Community Member:

To claim a work-related deduction:

  • you must have spent the money yourself and weren’t reimbursed
  • it must be directly related to earning your income
  • you must have evidence

If you are paid a travel allowance, have a record to prove it.

If you receive a travel allowance:

  • you must declare the allowance on your tax return as income
  • you are entitled to claim a deduction for the actual expenses you incur, less any private component.

If you get paid an allowance for some travel expenses (including overtime meal allowances, and domestic and overseas travel allowances), you do not have to keep written evidence of your expenses provided your claim does not exceed the reasonable allowance amount we set for each year.

If you want to claim more than the reasonable allowance amount we set, you need to keep evidence of your expenditure.

More questions and answers can be found on the ATO community website. You can see the concerns other people had and the answers given to them by other members of the community. You can also post your own questions about the specifics of your taxes and ask for useful tips and opinions.

You Need an ATO Logbook, ASAP.

Since the tax system in Australia depends on Australian citizens to be diligent about lodging their own taxes, it is important that you do so properly.

While this sounds reasonable, the Australian Taxation Office still reports that over-claiming taxes is one of the main forms of tax system abuse.

In 2018, the ATO announced increased monitoring of all work related car expenses claims.

You definitely want to make sure your taxes are 100% in order and that’s why you should review your practices and make sure your tax lodging is absolutely flawless.

Here is a checklist you can always come back to:

First of all, you can claim expenses for your own car or a company car. This includes cars that have been bought, but also leased cars.

Keep in mind that a car is considered to be a vehicle that can carry less than a tonne and/or nine passengers.

Two factors are essential to remember:

  • You can only claim the expenses that occured while you are doing business and not the ones that occured while you used the vehicle for private purposes.
  • You can only claim expenses that you paid for yourself and for which you weren’t reimbursed by your employer in any way.

While keeping these two factors in mind, you can now start to calculate your taxes, using one of the two methods.

  • The cents per kilometre method for those vehicles that are not used for more than 5,000 kilometres a year.
  • The ATO logbook method for all those cars whose odometer shows more than 5,000 kilometres a year.

You don’t have to hold on to all the receipts if you are using the cent per kilometre method. However, if you are being audited, you have to be able to support your claims and explain your calculations.

As for the ATO logbook method, it is necessary to have a precisely and diligently filled out ATO logbook that monitors a period of at least 12 weeks.

This ATO logbook needs to be updated every 5 years. For each trip, you need the following:

  • Precise start and end of the journey, including the odometer readings
  • Total kilometres
  • Reason for the journey

Additionally, you will need the receipts for all the expenses.

Unfortunately, this means that you have to think about all these details every time you drive your car. You need to record the odometer reading, your destination and the reason why you are going there. It takes a lot of time and if you forget any of these steps – you could be in trouble.

One of the easiest, hassle-free and, in the long run, cheapest ways to do this every day is to use your smartphone and an app like GOFAR. The app tracks all those details you need for your tax and more.

What’s even more convenient, you just jump into the car and start driving. When you’re done, you just swipe left or right and let the app know if that was a business or private trip.

GOFAR then holds on to those logs and you can email them to yourself in two taps on your phone screen. They’re delivered in a convenient spreadsheet format that makes calculations a breeze.

Make your tax time less stressful and stay sane by using GOFAR.

Even though the ride-sharing economy has been hailed as a revolutionary innovation that has changed the transport industry for good, Uber drivers are in pain – a lot of pain.

They face a myriad of challenges that the rider cannot even begin to understand. If you are an Uber driver, the following will be your pressure points.

Drivers Don’t Have the Full Picture Uber

Uber limits the driver’s access to information. For example, the average driver is not clear how much commission he earns per ride.

Most drivers do not even know if Uber deducts its fees before or after commission.Vehicle registration fees

Others do not understand the importance of commercial rideshare insurance over and above the one provided by Uber.

There are numerous rules – in fine print – about bonuses fares and the constantly changing fares. You need to be clear about these rules to make money driving for Uber.

An Uber Driver is Responsible for All Expenses

Uber promises its drivers a flexible schedule and a lucrative job, but they conveniently forget to say that the driver is responsible for the expenses of running the car. So that you know, you will be responsible for the following costs;

Standing CostsRunning Costs
DepreciationFuel
Car TaxesMaintenance
InsuranceRepairs and improvements
Inspection feesParking
Car financingTolls
Cost of capitalFines
Vehicle registration feesCar wash

To cut back on your running expenses, you need to start using smart technology such as GOFAR.

GOFAR helps you to find your car engine’s sweet spot, which enables you to drive more efficiently to save fuel.

Areas where the GOFAR app and device can help you include;

  • Tracking the car mileage for tax deductions
  • Alerting you when the car has a fault
  • Explaining the car faults in plain English
  • Reminding the driver of Registration and Insurance
  • Connecting drivers to top-rated mechanics and parts suppliers
  • Saving fuel by finding the engine’s sweet spot

Uber Raises or Lowers Rates Arbitrarily

An Uber driver is the second most important stakeholder in the ridesharing economic model after the rider. Unfortunately, his take on the rate charged to customers is not sought.

Uber bases its pricing on the supply and demand market shifts.

What this means is that even though you can work throughout the day, you will only be able to make profits between 7 AM and 11 AM and 3 PM to 8 PM. During the off-peak times, the fare is too little to make any economic sense for the driver.

The off-peak hours are commonly referred to as “dead hours”, and the miles driven without a customer in the car are known as “dead miles”. Competition has increased the dead hours and dead miles to unsustainable levels.

Uber Encourages Drivers to Take High-Interest Loans

As the ridesharing industry takes root in different cities, Uber needs more drivers. Sometimes these drivers do not have cars. Uber solves this by offering the drivers high-interest loans.

Alternatively, they are directed to the Rent-a-Car model whose rates are even higher.

Just like the first-time home buyers in the US subprime mortgage were duped, so are -the Uber drivers who do not even know what they are buying.

The debt-to-work model being funnelled to the drivers reduces their take-home package by a significant margin.

Uber is Exempted from Government Regulation

World map about Uber legal problems
Photo Courtesy of Wikimedia Commons Images by taxi-deutschland.net

The traditional taxi industry was heavily regulated by the government to protect the drivers from exploitation and enhance public safety.

ities have traditionally limited the number of taxis on their roads to allow the drivers to earn a decent wage.

Uber is exempt from these government policies. No city authority can tell you how many Uber vehicles are on their street, or how many hours the average driver is spending on the road.

The net effect of this is that the public is not safe, and the drivers are taking home less money than their traditional counterparts.

Uber Employees Don’t Have Bargaining Power

Uber drivers are regarded as business partners by Uber and therefore are not entitled to sick days, pension, and workers ’ compensation among other benefits.

The drivers cannot form unions, and so, they address their issues through expensive court processes. The little money they earn is spent on hiring costly legal advice.

Customers Don’t Tip as Generously

Let’s face it! If you had to tip a driver in person, you would be embarrassed to tip them a few dollars after they have offered you a fantastic ride. This embarrassment has been removed by in-app tipping.

Competition from Other Ride Hailing Apps

Uber drivers will continue to see their wages dwindle if the competition in the ridesharing industry is anything to go by.

Uber’s CompetitorServices OfferedThreat to Uber
LyftLyft Line, Plain Lyft, and Lyft Plus- Lyft is working with General Motors GM -who is also an investor in the company-Alphabet's GOOGLE self-driving car subsidiary Waymo, and most recently, self-driving car startup nuTonomy.
Didi ChuxingIt has 99% of China’s market share of the taxi business.- Funded by global giants such as Apple, Tencent and Alibaba
- Strategic partner to Lyft
- Lost $2 billion trying to enter the Chinese market.
CurbIts motto is “all rides begin and end at the curb”. This directly eats into Uber’s base fare.- You can pay fares within the app or with cash in the car.
- You can choose the vehicle that is best suited for your needs.
GrabOperates the whole of Southeast Asia- Has joined forces with Lyft, Didi, and Ola to outcompete Uber
OlaMain operator in India- Has joined forces with Lyft, Didi, and Grab to outcompete Uber
- Allows both cash and digital payments

Self-Driving Cars Already Replacing Drivers

Black car in the city
Photo Courtesy of Wikipedia Images by Timtempleton

Every time a self-driving Waymo car drives itself in the streets, it is taking away a drivers job. Even Uber has started rolling out its self-driving cars on the roads around the world.

Since the driver is the most significant cost in an Uber car, the company would love to get rid of all its drivers and replace them with the self-driving software.

The software doesn’t get tired, ask for leave days, drive carelessly, or even ask for wages. Uber’s cost will only be fixing bugs in the software.

Toxic Culture and Poor Support

Uber’s culture is cutthroat competition for customers. It has very stringent rules for its drivers and offers very little support to its drivers. This means that drivers have to dig deeper into their pockets.

Poor Internet Connectivity in Some Areas

Uber drivers need a reliable internet connection if they are going to get the customer requests. If a driver is working in a city with small internet bandwidth, they will not make enough money to even cover their running costs.

The problem is worse in emerging and developing countries.

Only Tech-Savvy Drivers Can Make Money

In the developing countries, digital literacy among the drivers is low and therefore they are not able to take advantage of the Uber app to make more money.

Revolt from Traditional Taxi Drivers

Uber drivers have been facing numerous revolts in countries where traditional taxi companies had taken root. The traditional taxi drivers claim that Uber’s charges are so low that they get undercut through pricing.

Bad Reputation of Uber Drivers

In some countries, rape cases from Uber drivers have been reported. Female riders have become afraid of riding in car unaccompanied. This has led to depressed ride requests, which in turn reduce the driver’s earnings.

Understanding the things that will reduce your earning potential as an Uber driver is very important. It helps you avoid these situations, and therefore earn a decent wage at the end of the day.

Drivers for ride share services such as Uber and Lyft can put as much as 1,000 miles a week on their cars. For that kind of heavy usage driving, learning which are the best car models that offer greater reliability, fuel efficiency and safety is important.

In addition, by connecting your ride share car with GOFAR, you will spend less on fuel, vehicle servicing and tax compliance.

The technology is easy to use – all you need to do is to plug the device’s adapter into your dashboard’s OBD2 connector, and it will track all the critical parameters retained in your car and synchronize the data with your smartphone.

The following have been voted the best car models by drivers on both Uber and Lyft.

Best Car #1: 2018 Toyota Camry

Best car #1: 2018 Toyota Camry
Credit: Kevauto

The Toyota Camry went through a full redesign in 2018 to boost its performance, comfort and reliability. The car’s sporty look and performance have become the top choice for discerning ride sharing drivers.

Its five trims and mid-size stature make it appealing to most drivers.

Above all, the Toyota Camry is – at the time of writing – reasonably priced at $23,495. The car can carry up to 5 passengers. Its rear seat is roomy enough for tall riders. It comes with the standard Toyota security features and driver assistance.

We recommend this model due to these advantages:

  • Reliability so you can maintain a regular Uber driving income
  • Rear-seat legroom for Uber customers
  • Advanced driver assistance for increased safety

Best Car #2: 2017 Toyota Prius Two Hatchback

Best car #2: 2017 Toyota Prius Two Hatchback
Photo: Carsfera

There are several reasons why the Toyota Prius Two Hatchback is a ongoing favourite for Uber and Lyft drivers. Firstly, it has one of the best miles per gallon fuel efficiency for a car of its size. Built-in fuel efficiency saves ride shares drivers considerable expenses.

Furthermore, it has a large trunk, as well as foldable, roomy rear seats to create more room for luggage. Lastly, it comes with a range of features such as key less ignition, rear view camera, 6.1-inch touchscreen, LED headlights and 15-inch wheels.

We recommend this model due to these pros:

  • Outstanding fuel economy for all-day Uber driving
  • Great of combination space and comfort for customers to really stretch out
  • Base models are well-equipped with roomy trunk. Fit more suitcases in for airport trips.
  • Approved UberX model so you can earn more

Best Car #3: 2018 Chevrolet Malibu

Best car #3: 2018 Chevrolet Malibu
Photo: Wikimedia Commons by Kevauto

The Chevrolet Malibu has been a regular favourite with Uber and Lyft drivers for several years. Did you know that it won 2017 Best new Car for Teens as well as the Best New Midsize Car for families?

Consequently, its position as the car of choice for ride sharing was entrenched further. Another one of its other advantages is fuel efficiency, especially useful when driving customers all day.

It can use as little as 27 miles per gallon in cities and 36 miles per gallon on the highway. Above all, J.D. Power and Associates gave the car’s 2017 model a 4-out-5 reliability rating.

We recommend this model due to these pros:

  • Fuel Efficiency for all-day driving
  • Affordability for Uber drivers who need to save money on fuel
  • Comfortable cabin
  • Rear seat legroom for your passengers

Best Car #4: 2017 Ford Fusion

Best car #4: 2017 Ford Fusion
Photo: mariordo59

The Ford Fusion is a popular car with ride sharing drivers due to its affordable price. At $22,120, the car is certainly one of the most reasonably priced vehicles in the market.

In contrast to what the affordable price implies, the car is packed with the latest technology. Above all, it features stylish interiors and an elegant cabin.

Furthermore, if you are an environment enthusiast, you will be happy with the car’s plug-in hybrid version.

We recommend this model due to these pros:

  • Extremely competitively priced in its class
  • Capable performance
  • Good, well-balanced handling
  • Spacious cabin and trunk to hold plenty of luggage
  • Approved UberX model

Best Car #5: 2017 Honda Civic Sedan

Best car #5: 2017 Honda Civic Sedan
Photo: M.rJirapat

The 2017 Honda Civic is ideal for drivers who place a premium on a safe, stress-free ride for their customers. Its chassis is made for agility, and maximum comfort.

Above all, the Civic gets the highest National Highway Traffic Safety Administration (NHTSA) safety ratings.

Its 1.5-litre turbo engine is especially suitable for Uber and Lyft drivers that are looking for some extra power. If you want some cargo space, perhaps you should get the hatchback version of the Civic.

We recommend this model due to these pros:

  • Good fuel economy
  • Well-tuned suspension and precise steering
  • Comes in 1.5 T hatchback version for extra cargo space
  • Stylish, sporty design
  • Approved UberX model

Best Car #6: 2017 Ford Explorer

Best car #6: 2017 Ford Explorer
Photo: Reyanloquito

The Ford Explorer is best suited for Uber and Lyft drivers who are looking to impress customers. This is due to its luxurious interior and elegant exterior.

As a result, families or friends who want to ride in style will enjoy the ride. It is a 3-row 7-seater vehicle that features a quiet cabin for riders looking to chill after a long day.

Even more of its other great features include leather upholstery, heated steering wheel, and heated/cooled front seats.

We recommend this model due to these pros:

  • 7-seater
  • Standard backup camera, Bluetooth, and voice control
  • Well-insulated cabin
  • Standard 6 speakers
  • Approved UberXL model

Best Car#7: 2017 Audi A4

Best car#7: 2017 Audi A4
Photo: EurovisionNim

This is arguably one of the best cars for ride-sharing drivers targeting business executives. Not only does the Audi A4 boast quite a large headroom, it also has ample legroom for the tall passenger.

Furthermore, the car comes packed to the brim with the latest technologies, and it also features an upscale interior finish. Above all, you are guaranteed a 5-star rating from your customers with the elegance of this car.

We recommend this model due to these pros:

  • Sleek and modern interiors
  • Better-than-average cargo space and split rear folding seats
  • Ample leg space and roof heights for taller passengers
  • Precise steering and agile handling; emphasis is on ride comfort
  • Approved UberSELECT model

Best Car #8: 2015+ Honda CR-V

Best car #8: 2015+ Honda CR-V
Photo: M93

Looking to have an all-wheel-drive car that can help you make money regardless of the weather?

Because it is one of the most comfortable SUVs in the market today, the Honda CR-V is regarded as one of the best car models.

We also consider this as one of the  model due to these pros:

  • Roomy cabin
  • Good fuel economy
  • Competent handling
  • Rock-solid reliability
  • Top safety scores for drivers in the snow belt
  • All-wheel drive
  • Additional ground clearance

Best Car#9: 2014+ Honda Odyssey

Best car#9: 2014+ Honda Odyssey
Photo: Hatsukari715

If you are driving for services like Uber XL and Lyft Plus, this 6-seat car is considered one of the best car models as it can carry more passengers.

Furthermore, depending on how its interior is configured, it can carry up to 8 passengers.

We recommend this model due to these pros:

  • It offers top safety scores
  • Fuel economy
  • It can sit a whole family

Best Car #10: 2018 Hyundai Sonata

Best car #10: 2018 Hyundai Sonata
Photo: Kevauto

The Sonata is among the best car models for Lyft and Uber drivers for its fuel efficiency. Because of its new engine technologies, you can get as much as 25 miles per gallon in the city and 35 miles per gallon on the highway.

Furthermore, you can get the Eco trim which will achieve a 28 miles per gallon in the city and 37 miles per gallon on the highway. That is, if you are willing to pay a bit more.

J.D. Power and Associate gave its 2017 model a 4-out-of-5 reliability rating. However, due to its sloping roofline, there is less room for taller passengers.

We recommend this model due to these pros:

  • Spacious
  • Fuel-efficient
  • Rear seat legroom
  • Fuel efficiency

Getting fired by Uber is on top of every driver’s mind. In fact, it is their worst nightmare. You try to get into the app only to find out that your Uber driver account has been disabled. And just like that, your source of livelihood is gone!

While there are many reasons why a ride share driver can get terminated, there are general policy violations that every Uber driver should learn by heart. Don’t let the urge to make a quick buck get the better of you.

If you are not making enough money, try using a smart technology such as GOFAR to cut your expenses.

GOFAR helps you to find your car engine’s sweet spot and then helps you drive more efficiently to save fuel.

Areas where the GOFAR app and device can help you include;

  • Tracking the car mileage for tax deductions
  • Alerting you when the car has a fault
  • Explaining the car faults in plain English
  • Reminding the driver of Registration and Insurance
  • Connecting drivers to top-rated mechanics and parts suppliers
  • Saving fuel by finding the engine’s sweet spot

Click here to learn how to increase your gas mileage and save up to 30%* on fuel costs each year.

Knowing the reason why you might get deactivated on Uber could help you avoid getting in trouble, so this is the list you need to be wary of.

1. Fraud

Fraud includes purposely increasing the time/distance of a trip, creating fake accounts to take advantage of promotions, claiming fraudulent fees and accepting falsified trips.

2. Safety Issues

Every time you put yourself or your passenger in danger, you will be deactivated. So if you’re out driving passengers around drunk, molesting/harassing passengers or just a maniac on the road, your Uber driver account will be disabled.

Other behaviours that may get you deactivated include;

  • Failing to abide by local traffic laws
  • Failing to buckle up
  • Texting while driving
  • Carrying a gun in your car
  • Exceeding the speed limit

Passengers won’t always leave comments for their drivers after the ride is over, but if you put the passenger’s life at risk, they are going to let Uber know about it.

3. Documents Expiration

All the driving documentation – i.e. the driving license, the vehicle registration, the insurance certificate and the motor vehicle inspection certificate – has an expiry date.

Failure to renew the documentation in time will attract a deactivation from Uber. Note that you will not be notified of the deactivation as you are expected to be a responsible driver.

4. Low Uber Driver Ratings

You should ensure that your rating is always above 4.8 because if it falls below 4.6, you risk deactivation. Uber allows the drivers to pay customer service fees to get reinstated.

5. Promoting a Competitor

The most common thing that can get you deactivated is passing out Lyft referral cards to Uber passengers. Uber doesn’t have a problem with you supporting other services like Doordash or Airbnb, but Lyft is a direct competitor, so they don’t like that.

6. Giving Pre-arranged Trips

To discourage and Uber driver from sweet-talking Uber customers to become private clients, Uber will immediately deactivate you if it gets wind of any pre-arranged trips that are outside the app.

7. Giving Free Rides to Meet Ride Minimums

Be a proper Uber driver!
Photo courtesy of Flickr Images by Kyle Taylor

If you are found to have given free rides to your friends or family members to meet the minimum guarantee rides, Uber will immediately deactivate you.

8. Getting Commercial Taxi Licence

Commercial licenses require lots of regulations and Uber wants no part of this. This could be the number one reasons why they opt out from commercial licenses.

9. Updated Background Check

Sometimes, some government authorities require Uber to run an updated background check. Irrespective of whether you have driven thousands of miles on the platform, if you fail this check, Uber will have to deactivate you.

The only thing you can do to ensure you stay in the good books of government is to drive safely and stay out of police’ criminal records.

10. Excessive Cancellation

Before you are signed up as an Uber driver, you will sign a deactivation policy that has a clause about “Acceptance and Cancellation Rate”.

Uber reckons that if you are serious about working as a ride sharing driver, you will have a high acceptance of customer pings and very few poor reviews.

Try to keep cancellations rate below 10%. And if you’re going for one of Uber’s incentive programs (e.g. Power Driver Plus, Guaranteed Hourly Fares), they usually have an 80-90% acceptance requirement.

11. Idle Uber Account

To avoid crossing the red line, offer at least one ride monthly. Uber will notify you when your idle account becomes a problem, and it is easy to get back to the platform as an Uber driver if you were kicked out for inactivity.

12. Having Someone Else In Your Car

The only other person in the car when you are driving for Uber should be the customer. If a customer ever leaves feedback that you carried another person during the ride, you will be deactivated.

13. Cancelling Because the Distance is Short

Since Uber charge per mile, short distances do not pay a lot of money. If you cancel on a client just because the ride distance is short and Uber finds out, you will be deactivated instantly.

14. Switching Vehicles

Get all the cars that you own and want to use on Uber added on the platform. Uber is offering free vehicle inspections in most cities these days if you’d like to add another vehicle.

No one who earns a living by being an Uber driver would want to see their account being deactivated from the app; unfortunately, it does happen very often. To keep out of trouble;

  • Update your documents
  • Read, understand and follow Uber’s rules
  • Be a courteous and safe driver
  • If you get deactivated, correct the problem immediately

Don’t antagonise Uber support employees

Remember — this is a service job. Your passengers want a safe ride from a sane driver, so don’t do anything to make your passenger uncomfortable.

Thousands of people in the United States, Australia, Europe, Africa and Asia use UberEATS to get quick on-the-go meals. With millenials on the rise, and convenience being top-of-mind, pace is quickening in the food delivery industry.

Now is a good time to fully investigate the opportunity of working for UberEATS and deciding whether it’s a good fit for your budget and lifestyle. Can you earn a reliable income and how can you make the most of it?

For UberEATS delivery drivers, it’s a flexible job that pays the driver to pick up and drop off food orders, similar to Postmates and DoorDash.

However, keep in mind that saving on fuel costs and vehicle maintenance is the most efficient way to boost your driving income. It’s not just a matter of earning more; it’s also about saving some.

UberEATS provides job seekers with endless opportunities to earn a reliable income delivering food to their customers. Let’s explore how to get involved:

How Smart Uber Drivers Save On Costs

The biggest expense for any Uber driver is the running, fuel and maintenance costs associated with their car. Once they figure out how to use the car with minimal expense, they make more money.

Smart drivers are increasingly adopting smart driving technology such as GOFAR that helps them to;

  • Track car mileage to claim tax deductions
  • Alert them when a warning light is illuminated on the dashboard
  • Explain the car faults in plain English
  • Remind the driver of upcoming Registration and Insurance
  • Connect them to top-rated mechanics and parts suppliers
  • Save fuel by finding the engine’s sweet spot and improving driving behaviour

Focusing on how you’ll save money on driving costs means you’ll end up with more in your pocket at the end of each day. Now, let’s explore how to get involved with UberEATS so you can start earning a regular income.

UberEATS Minimum Driver Requirements

  • Drivers must be 19yrs of age or older
  • Valid driver’s license and ongoing insurance
  • At least 1-year driving experience
  • Proof of car registration
  • Cars must be at less than 19 years old or newer (The manufacture year 1997 or later),
  • Must be able to lift 30 pounds effectively
  • Must have a car, bike, or scooter
  • Ability to work effectively
  • Adequate insurance cover for the vehicle
  • A smartphone with a robust data plan and one that supports the UberEATS App

Note: After you upload the required documentation Uber personnel may take several days to perform a background check, but will then get in touch regarding your application process.

Pros of Working For UberEATS

  • Make easy money without heavy lifting
  • No pre-paid card requirements
  • Flexible working hours
  • $5 cash reward for all cancelled orders
  • In-app tipping

Cons of Working For UberEATS

  • Payment is based on mileage and time
  • Prolonged waiting periods at restaurants, traffic and parking
  • The pay can be low. It can dip beneath $10/hour if your area isn’t busy and there’s no guaranteed minimum
  • Trouble contacting the customer or finding where exactly to deliver the food
  • Car maintenance, fuel costs and driving inefficiently can eat into your profit margin
UberEATS available on iPhone. Earn more as an Uber driver!
Photo: GFernandes

How To Pick A Delivery Assignment

The pickup and delivery process is relatively straightforward. Here’s how orders work:

  1. Go online – Click on the go online button to initiate the delivery assignment. As long as you are online, the app will display the available delivery assignments.
  2. Accept deliveries – When a delivery assignment becomes available, the app will notify you by flashing or beeping. It will also give you the location of where you need to deliver the food. You will need to click anywhere on the app within fifteen seconds to accept the assignment. Once you accept, you will be given the directions of the delivery destination. If you decline to accept the order, another Uber driver will be assigned the task. Sometimes, you may get two orders from the same restaurant. In such cases, you will pick both requests at the same time, but you will deliver them sequentially.
  3. Pick up the food – Always ensure that you collected the right order before you head out of the restaurant. The customers will pay online via the UberEATS app for their food order, and thus you will not be required to handle any money. Keep hot and cold food separately and in an insulated bag. Both the Uber driver and the customer receives a notification with the expected time of arrival of the order. In case there is a traffic delay, the driver will not be penalized.
  4. Deliver – Sometimes the customers leave notes to guide you on where and to whom you will deliver the food. Upon reaching the destination check if the customer left the apartment number, the name of the recipient, etc. If you are lucky, the customer will be gracious to come out and meet you but if you are not, find a parking space nearby or call the customer to arrange how he will receive the order.
  5. Complete the order – To complete the order, swipe right on the app.

Notes:

  • To make more money, keep your app online and you’ll automatically receive more orders
  • As long as you are online, the app will send notifications of available delivery orders
  • Go into the UberEATS app and update your status to offline if you need to take a break
  • If you are offline, you will not get any notifications until you turn on your status

How Much Do I Earn Delivering Food?

  • For every successful delivery, you will earn around $3 which translates to $10-$20 per hour. UberEATS services are divided into two major categories namely UberEATS Instant Delivery and Full restaurant delivery.
  • Customers use the UberEATS app to select their food preferences before ordering. Your work is to use the app to locate the customers’ delivery locations.
  • The deliveries can be in the form of walk-in drop-offs or curbside. If you get to the customer’s destination and they take longer than 5 minutes you have the right to activate the cancellation policy and earn a cool $5 cancellation fee in the process.
  • Uber pays you the pickup fee, a drop off fee, and a fee for mileage from the pickup to the customer.
  • Uber takes a 25% cut from the transactions of the Uber driver.
  • You keep 100% of tips.

Multiply Your Income Using UberEATS Surge and Boost Earnings

You can increase your earnings by going into Boost Zones that have multiple deliveries. The Boost zones are shown in the app along with the time they are available.

The good thing with the zones is that the Boost multiplier is added to ride’s net fare after Uber has deducted its fees.

Another option to make more money is the Surge price which occurs when there is a high demand for food deliveries. Again, the Surge multiplier is applied to the net fair after Uber deducts its fees.

Unfortunately, the Surge is not as predictable as the Boost since it may have dissipated by the time you drive into the area.

How To Get The Best Earnings From UberEATS

If you are lucky with your UberEATS deliveries application, you can get the best out of it by taking advantage of available drivers’ incentives.

These incentives allow the Uber driver to make extra cash by making a certain number of deliveries within a specific time frame.

In simple words, higher deliveries equate to increased earnings.

However, be careful that your driving style doesn’t eat into your earnings. Driving efficiently can save you money. Use a fuel efficiency app to track your driving behaviour and receive real-time feedback.

To get the best out of these incentives, promotions, and bonuses you have to be alert for promotional notifications sent to your smartphone.

If you are looking to make an honest living and UberEATS is available in your area, give it a shot. All you are required to have is a car, a scooter or a bicycle.

The more Uber and Lyft succeed as ride-hailing apps, the more drivers they attract to their platforms.

Even worse (for Lyft and Uber drivers), the two platforms have picked up a habit of cutting the per mile charges to the customers without consulting their largest stakeholder – the driver.

The net effect of this is that drivers are left with less and less money in their pockets. The advice below will help you remain profitable, and even make more money than you thought possible.

1. Drive More during Rush Hour and Weekends

You need to learn about the busiest hours for Lyft and Uber drivers. For example, during the weekdays, the morning and evening rush hours have higher demand than say 10 AM to 3 PM.

During the weekends, you are likely to make more money during the mornings, afternoons and nights.

2. Connect Your Car with GOFAR Technology

Smart drivers have adopted the GOFAR technology that helps them to;

  • Track the car mileage for tax deductions
  • Save fuel by finding the engine’s sweet spot and warning you when your driving technique burns money
  • Alert you when the car has a fault
  • Explain the car’s faults in plain English
  • Remind the driver of Registration and Insurance
  • Connect them to top-rated mechanics and parts suppliers

Click here to learn how to increase your gas mileage and save up to 30%* on fuel costs each year.

3. Take Advantage of the High Turnover

Unlike other industries, ridesharing driving has high turnover. Lyft and Uber Drivers listen to the politics around the rates offered and then deactivate the apps. On a good day ten will add on, but 100 will drop out, so you are okay.

4. Offer Better Customer Care

Upon leaving the vehicle, Lyft or Uber drivers should double-check that nothing was left in the backseat and wish the customer a good day, using their name.

When you say the customer’s name, it helps to create a connection and leaves the customer with a more personable experience.

5. Surge Chasing is a No-No

Unless you are already in the area with the surge, never rush to try and take advantage of the spike in demand. Surges don’t last long, and by the time you reach the area, it might have dissipated, and you will have burnt your fuel.

6. Don’t be Too Hard on Yourself

Rookie ridesharing drivers are bound to make mistakes. You will make a wrong turn, sometimes press the wrong button on the app, or even rush to an area with a surge.

Don’t beat yourself too hard or get discouraged. By the time you drive your fiftieth ride, you will be a pro and will laugh at yourself for being so nervous on your first ride.

Lyft and Uber drivers, stay chill.
Photo courtesy of Freepik Images by freepic.diller

7. Join Local Lyft and/or Uber Drivers’ Facebook Groups

The best practice is to join a local driver’s Facebook group. Here, you will share problems and solutions specific to your location. Avoid the large groups with over 5,000 members as the old drivers may not be very receptive to the new drivers.

8. Get a Good Phone Mount and Charger

Never start a ride without a good mount. It does not reflect very well on you if you hold the phone in your hand or put it on the cup holder. Your clients will give you bad reviews and low ratings.

Secondly, always have a reliable phone charger in your car. The ride-sharing apps consume a lot of battery power. You don’t want to run out of battery just when you are talking to the customer!

9. Ensure the Passengers Don’t Leave Their Belongings

Passengers often forget belongings such as phones, keys, purses and sometimes even wallets in the car. Unfortunately, by the time they discover they left their items in the car, you may be 10 miles away.

This will mean burning fuel and missing out on a ride when you return the belongings. Always check the back seat!

10. Take Breaks

Relax every once in a while.
Photo courtesy of Freepik Images by Freepik exclusive vectors

For you to efficiently drive an 8-hour schedule, you will need at least eight straight hours of sleep. During the day, you will also need to take regular breaks when you can stretch or walk around. In the long run, you will need a healthy body to keep up with the hectic back-to-back rides.

11. Keep Your Expenses in Check

The GOFAR App can help you track your expenses. You will need to know mileage covered, cost of servicing the car, any repairs done, etc. This information is vital for tax deduction purposes.

12. Never Drive Aimlessly

Every mile you drive without a passenger in your car is an expense to you. You will be burning fuel, and your car will be undergoing wear and tear.

Always look for an area with a lot of traffic such as a mall and park as you wait for customer ride requests.

13. Know Where to Get Restrooms

Places like Debenhams or David Jones usually have bathrooms you can use, as does Starbucks or McDonalds. As you learn your routes, know where you can access the restrooms and park your car with no or minimal charges.

14. Get Carebags for Night Driving

Once in a while, you will drive an intoxicated customer, and the chance of vomiting in the car are high. Always have some carebags that can be sealed so that if a customer feels like vomiting, you can give him the bag instead of puking all over your car’s seats.

15. Keep the Car Neat

It’s pretty simple. Passengers like a clean car, so wash your car or get it washed about once a week or so. Also, you’re going to have passengers who are going to the airport and may have a lot of luggage.

16. The City is Busier than Suburbs

In almost every market, Lyft and Uber drivers are busier in the city than the suburbs. The reason is simple – population density. You can still make money in the suburbs, but you won’t get as many rides as you can get in the city.

17. The Destination and Last Ride Settings Can Save You Fuel

The Lyft and Uber apps have a functionality called destination setting. This setting helps you to receive customer requests only headed in the direction you set.

You can only use the feature twice in a day with the Uber app while Lyft allows you to use it six times.

If you are headed out to the suburbs and would like to get a customer on the trip back to the city, you can use this setting.

Alternatively, if you are going home, and this is the last ride, you can set the destination as your home.

Another feature that helps the drivers is the last ride setting which ensures you don’t get any new ride requests.

If you have a customer in the car and you are about to reach your destination, you get a trip added in your queue, ensuring you have minimal downtime.

The driver turnover is very high in Uber and Lyft, but why is it some of the drivers stick around for years one? Sometimes it’s not the strategy, spreadsheets, or analysis that makes an Uber and/or Lyft drivers great.

It is the intangible things that are hard to put numbers to that make all the difference in the ride sharing industry.

1. Learn Your Routes

Know where to turn right or left and how to avoid red lights. Every minute you spend not giving a ride to your customers is money lost.

Even if you were stuck in traffic for just 20 minutes and you only work five days, this translates to 80 hours a year.

2. Avoid the Negativity on the Internet

If you pay attention to the thousands of naysayers in the ride-sharing industry, you will never make any money. Instead, look for creative ways to cut down your costs.

You can, for example, connect your car to a great little gadget called GOFAR and the technology will you drive consistently in your car engine’s sweet spot.

This allows you to spend less on fuel and helps you keep track of your mileage for tax deduction purposes.

GOFAR also alerts you when it’s time to service your car.

3. Understand the Tricks of Driving

During the weekday rush hours, short but numerous trips make the most money. During the day from 10 AM to 3 PM, longer rides are more profitable since there is no traffic.

During the weekend, if you get a long ride, enable your destination filters to be paid for your return drive.

4. Enroll in a Class

Driving a car to make money may seem like a straightforward job, but many people find it incredibly helpful to take a course before beginning their career with Lyft or Uber.

When you start driving, it may be difficult knowing where to begin. You may spend some extra money, but get a significant return on your investment when you learn about when and where to find riders, surge pricing, strategies, record keeping, customer care and much more.

5. Join Other Drivers’ Forums

Familiarize yourself with what it’s like to drive in your area through other drivers’ experiences. This will save you time and help you to start earning more right away.

Most questions have been asked before. Use the forum to find answers quickly and avoid asking the group to repeat questions. Some drivers in these groups will not be welcoming to new group members who post a frequently asked question.

6. Pack Some Healthy Snacks

Packing some healthy snacks saves you money on small expenses such as coffee. It also ensures that the food you eat is always healthy.

7. The Little Things Count

Ridesharing is better when you go the extra mile.
Photo courtesy of Flickr Image by Elvert Barnes

Think about opening doors for passengers, helping them with their luggage or meeting them with an umbrella if it’s raining. It’s these little gestures that show passengers you care.

8. Become the Customer

Believe it or not, one of the best things you can do to improve your skills as a driver is to first experience ride sharing as a rider.

By taking even a handful of rides, you can learn a lot. Aside from merely observing what you do or don’t like about how drivers work, you can also ask drivers questions and learn more about the profession before you begin.

Ask your driver what they’ve learned, what they like, specifics about driving in your city, and how much they make. Most drivers will be happy to discuss their experiences, and you’ll get information straight from the source.

9. Ensure Your Insurance Covers Everything

Insurance isn’t usually foremost in a driver’s mind when they begin, but it will matter a lot if you are in an accident. You want to ensure that you are covered if this happens.

While Uber and Lyft both provide insurance coverage for when you are driving, you’ll still want to verify with your insurance provider to make sure you’re adequately covered.

Once you’ve spoken with your insurance provider, you may want to contact some others as well for comparison.

10. Become a Tour Guide

All cities have major events happening now and then. A smart driver would be on the lookout for professional and entertainment events so that if in the course of a conversation a passenger mentions they are a visiting for professional purposes but won’t mind some distraction, you can alert them of the event.

This is an excellent way to develop a rapport with clients, which can be very beneficial for your bottom line.

11. Advertise Products during Rides

If you’re ready to take your driving to the next level, advertising products during your rides could offer you an opportunity to up your profits with minimal effort.

12. Understand the Surge Pricing and Prime Time

Surge pricing (Uber), or Prime Time (Lyft), are times when the demand for rides goes up, and supply of drivers goes down, meaning that the rate charged for a trip increases.

Taking advantage of these times can lead to the potential for higher earnings for drivers.

You’ll see varying opinions on this. Some say that surge and prime time end up wasting your time, as the flood of responding drivers make it even harder to find riders.

Some advice taking advantage of it if it’s occurring in the area you are already driving. Keep on experimenting with the Surge Pricing until you find a formula that works for you.

13. Concentrate on the City

You may not be driving in a bigger city, in which case this wouldn’t apply. But if you are, staying in the city, as opposed to driving out to suburbs, is a smarter move for drivers.

ore people are looking for rides in the bustle of the city, and you’ll get more riders, and thus earn more, by sticking with the more crowded areas.

14. Drive for More than One Ride sharing Service

Once you’ve got some experience as a driver, you may want to consider driving for both Uber and Lyft at the same time.

By making yourself available with both companies, you can increase your number of rides and thus increase earnings made through ride sharing.

15. Offer Complimentary Gifts

Wow the passenger by offering complimentary items. Successful ride sharing drivers have items like bottled water, snacks, gum, and chargers for mobile devices on hand.

By providing these to riders, you can improve the likelihood of a high rating.

16. Keep Good Records

A lot of what makes for a successful ride sharing driver has to do with strategy and impressing riders, but behind the scenes, you’ve got to be a good record keeper to do well.

As an Uber or Lyft driver, you are self-employed and come tax season you’ll want to be prepared.

Keep receipts for things like tolls and parking, track your miles for deductions, and track your earnings so you know how much you can expect to pay in taxes.

17. Never Drive Aimlessly

A common mistake made in ride sharing is driving too much. Every bit of fuel used counts against your earnings. Between rides, don’t drive aimlessly around.

Instead, find a location that works well for you and park there between trips to save money.

18. Avoid Driver-Heavy Areas Using The Passenger App

If you’ve taken a few rides with Uber or Lyft yourself, you know that the passenger app will tell you how many drivers are in your area.

If you’re driving, you can check the passenger app to find out if you’re in a driver-heavy area and go elsewhere if that’s the case.

This simple step can ensure that you aren’t waiting for riders in the company of 10 other eager drivers.

Lyft offers drivers a more significant sign-up bonus and higher rates, but an Uber driver has more customers, and its requirements are more relaxed.

Uber beats Lyft on vehicle options, coverage areas and innovation. But Lyft wins on pricing, customer support and brand image.

Some drivers cover all their bases and choose to drive for both Uber and Lyft. Ride hailing apps are getting a lot of business these days.

Two of the most popular ride sharing apps – Uber and Lyft – have exploded in growth over the last few years. It’s an exciting time for both riders and drivers.

Uber and Lyft are similar ride sharing companies. Their apps are downloadable on both Android and iOS devices.

The two companies keep on recruiting new drivers and if you are someone who loves driving, perhaps you should sign-up with both. If you are unsure of signing up with both companies, finding the following information will help you decide;

  • The amount of income you’ll make
  • The companies’ policies towards their drivers
  • The amount of experience you need to be hired

One other thing that you should consider to help maximise your income is a clever little gadget like GOFAR that monitors your car’s health and even your driving style.

The affordable device can also take the hassle out of car servicing. The technology will find the best mechanics for you, get the sweet spot of your car’s engine to help you save fuel, and log your mileage for tax deduction purposes.

As for Uber or Lyft, the following factors will help you choose between the two companies.

What are the Financial Incentives for a Lyft or Uber driver?

Lyft Has a Larger Signup Bonus than Uber

Typically, lift offers a bonus that ranges between $500 and $700. Sometimes it may even go as high as $1,000. Depending on the city you drive in, Lyft offers substantially higher bonus than Uber.

In fact, in some cities, Uber does not provide any bonus at all whereas, in others, it gives the bonus to drivers that have been on the platform for long.

To earn your sign-up bonus from Lyft, you’ll be expected to give a certain number of rides. Depending on the city, the trips can range from 25 to 100.

Lyft has Higher Rates than Uber

What a driver earns depends on the city he drives in, the time of the ride, and many other factors. While Lyft drivers can make as much as $17.50 per hour, their Uber counterparts earn an average of $15.68 per hour.

Another advantage of driving for Lyft is that the app allows the customers to tip the drivers whereas the Uber app does not.

This dramatically increases the take-home income of the Lyft driver as compared with his Uber counterpart.

Uber Has More Customers than Lyft

An Uber driver
Photo courtesy of Freepik Images by Alper Çuğun

Both Uber and Lyft offer similar services, but Uber has more extensive coverage than Lyft. Ubers broad customer base allows its drivers to have better opportunities offering the ride-sharing services.

Uber drivers are busier and get more consistent work compared to Lyft.

Unfortunately, just as Uber is the most common ride sharing app in the market today, so is also the driver competition stiffer.

If in a specific location there are many passengers to be picked up, expect that you will be competing for the customers with more drivers that would be the case with Lyft.

Join Both Lyft and Uber

Are you planning to earn your livelihood through a ride sharing job? It would be a great idea to work for both Uber and Lyft.

None of the two companies offers limitations as to whether the driver can drive for another company. This policy provides the drivers with the added job security needed since you can pick up customers from Uber when Lyft pings are not forthcoming and vice-versa.

Another advantage of driving for both companies the ability to avoid downtime. You can always respond to a ping from a customer from Lyft when you are already driving an Uber customer to his destination.

What will be Your Driving Obligations?

Lyft Gives a More Relaxed Start than Uber

If you want to start your career as a ride sharing driver in a less stressful environment, try working for Lyft where you are unlikely to get back-to-back customer pings.

Easing into ride sharing career as an Uber driver is a little bit more complicated as you get into a fast paced environment with cutthroat competition.

Uber is Stricter with Rating

Both Lyft and Uber have strict rating requirements for the drivers: if an individual driver’s rating slips below a 4.6, their position may be terminated.

Uber average’s a driver’s most recent 500 ratings, whereas Lyft only tracks the most recent 100 ratings. Older scores are no longer counted.

If as a rookie driver you attracted some lousy reviews from the customer, they’d only affect your overall score for a short time under Lyft. With Uber, low ratings earned in the first weeks of driving will bring down your average for much longer.

Uber’s Car Requirements are More Relaxed than Lyft’s

While both companies place specific vehicle requirements on drivers, Uber’s tend to be less stringent. Lyft only accepts drivers that have newer cars, while the Uber driver is permitted to have somewhat older vehicles.

Take note that it does not matter which company you start to work for. You will still be required to have your car checked and serviced before you start responding to customer requests from the app.

Check the Uber and Lyft websites for more information regarding the type of vehicle maintenance each requires.

What is the Company Culture in Uber and Lyft?

Lyft Culture is More Participatory

Lyft’s culture is warm and welcoming, and these benefits accrue to their drivers. An excellent example of this culture is the ability of Lyft passengers to tip the driver through the app, a functionality that is not available on the Uber app.

Another example of the participatory environment in Lyft is that if a customer rates a driver poorly, the app will make a note of this and will not match the driver and the customer again.

Further, Lyft offers what are called “Power Drive Bonuses” to drivers who exceed a certain number of rides a week. This bonus allows busy drivers to keep a higher percentage of their fares.

Uber’s Culture is More Professional

Uber runs its business like a big corporation where the staff, including the regular Uber driver, is expected to act with decorum. The Uber driver is expected to open doors, carry luggage for riders and even dress professionally.

Uber cars and SUVs are often black, and the company discourages personal accessories on or in the car.

Uber also encourages drivers to have a separate phone used exclusively for the ride sharing app. Conversely, Lyft does not discourage drivers from using their phones to run the Lyft app.

Lyft Has Better Driver Support

Many a former Uber driver say they experienced a strained relationship with the company’s staff. On the other hand, Lyft encourages great relationships within the company and also with the customers.

For example, Lyft sends drivers a “care package” consisting of a few small Lyft products after the driver has provided 1,000 rides to clients.

Uber vs Lyft: Who Wins?

Uber beats Lyft on vehicle options, coverage areas, and innovation. On the other hand, Lyft wins on pricing, customer support, and brand image.

It all comes to who you are as a person, what features would make you a more productive driver and what is valuable to you. You can use Uber for some things, but Lyft for others.

The Internal Revenue Service (IRS) has enforced the optional 2018 mileage rate right at the beginning of 2018. These are used to calculate the deductible costs of operating vehicles for business, medical, moving, and/or charitable purposes.

The standard 2018 mileage rate for the use of a car, van, pickup, truck, or any other sort of automobile are:

  • 54.5 cents per mile driven for business purposes (from 53.5 cents in 2017)
  • 18 cents per mile driven for moving or medical purposes (from 17 cents in 2017)
  • 14 cents per mile driven for charitable purposes (remains unchanged)

These rates change depending on an annual study on the fixed and/or variable costs of operating a vehicle. The fixed costs include repairs, maintenance, tires, insurance, depreciation, and the variable costs include gas and oil.

The 2018 mileage rate for businesses is based on both fixed and variable costs, while the rates for moving or medical purposes are based on the variable costs only.

How to Calculate the Rates with Easy Math

You can use more than one rate on your tax return, if you use your car for different purposes.

Let’s say for example, you drove 10,000 miles in 2018. 4,000 miles of your journey was for personal reasons (recreation, family, etc), 1,000 miles were traveled for charitable purposes, and 4,000 miles were traversed for business use, and the last 1,000 miles were for reasons of a medical nature.

The calculation for your deduction (which you will be filing in 2019) would be:

4,000 personal miles x 0 = 0

1,000 medical miles x .18 = $180

1,000 charitable miles x .14 = $140

4,000 business miles x .545 = $2180

The total mileage-related expenses that you can deduct would be $2,500, plus additional related charges such as toll fees and paid parking.

Under the law, taxpayers have the option to deduct their actual expenses of using their vehicle, rather than using the 2018 mileage rate. That, however, is a lot more work than you might be willing to bother with.

The 2018 Mileage Rate and the Past Years

The table below displays the rates for business miles for the past 8 years, from 2010 to 2017, and then 2018. Note that these rates were influenced by variable factors, most of which are uncontrollable, such as fuel prices.

Year Rate per Mile Dates Covered
2018 54.5 cents 1/01/18 – 12/31/18
2017 53.5 cents 1/01/17 – 12/31/17
2016 54 cents 1/01/16 – 12/31/16
2015 57.5 cents 1/01/15 – 12/31/15
2014 56 cents 1/01/14 – 12/31/14
2013 56 cents 1/01/13 – 12/31/13
2012 55.5 cents 1/01/12 – 12/31/12
2011 55.5 cents 1/01/11 – 12/31/11
2010 50 cents 1/01/10 – 12/31/10

How to Qualify for Mileage Deduction

There is no set limit for the amount of mileage you can claim on your taxes, given that you have followed the rules and that you can provide a compliant mileage log.

To qualify for the 2018 mileage rate deductions, your mileage log must include a thorough, accurate record of:

  • The dates of your trips
  • Your starting point
  • Your destination
  • The purpose of your trip
  • The person in need of medical care (medical deductions)
  • The recognized charity you are driving for (charitable deductions)
  • Your automobile’s starting mileage
  • Your automobile’s ending mileage
  • Tolls or other trip-related costs

The IRS will want to know the total number of miles you drove during the year for business, commuting and personal use, medical, and charitable purposes.

The best way to provide proof to the IRS how much you drove for business is to keep contemporaneous records. It means your records are created each day you drive, or at least soon afterwards.

Keeping receipts and a perfect record of your expenses is of the utmost importance.

The easiest way to log, calculate and export your business expenses is to use your smartphone and an app like GOFAR.

A better way to log for your 2018 mileage rate deductions

The Red Flags for the IRS

While there is no limit to the amount of miles you can reduce from your taxes, there are some claims that can send warning signals to the IRS.

These include:

  • Having a rounded-out number, like 30,000 miles
  • Claiming that all of your miles are for business
  • Claiming an irregularly high number of miles

Business Mileage vs Medical Mileage vs Charitable Mileage

If you are an employee, your commute to your regular place of business cannot be placed under the 2018 mileage rate for businesses.

If you are self-employed, any driving you do that is directly related to your business may be deducted in your taxes as business mileage.

These is the list of travel types that are considered under the business category by the IRS:

  • Travel between offices – the miles travelled between your office to another office or work can be written off. Commuting to work is not qualified, even if you are working while commuting.
  • Errands/supplies – travelling for business-related errands, such as purchasing supplies or going to the bank. These minor trips pile up, and many business owners fail to keep good track of these travels.
  • Business meals and entertainment – drives to meet clients or vendors are accepted by the IRS. This can include drives for dinner, drinks, etc. – as long as they are part of your business.
  • Trips to the airport – the miles you drive to and from the airport can be written off if the purpose is for a business trip.
  • Odd jobs – drives to and from odd job locations or side-gigs, such as babysitting, pet care, lawn work, etc., can be deducted as well.
  • Customer visits – trips from your office to another work location to meet with customers or clients also qualify.
  • Temporary job sites – driving from home to a temporary work location that would last less than a year can be written off.
  • Job seeking – miles driven to find a new job qualifies for mileage deduction. However, this only applies if you are looking for a job in a new industry for the first time.

Medical miles, on the other hand, can be claimed for drives with the purpose of receiving medical care – this includes you, your spouse, or your children.

The amount of this deduction is added to your medical deduction, which applies only if your total medical expenses exceed 7.5% of your adjusted gross income.

Finally, you can claim charitable mileage for the driving you perform in service of a recognized charitable organization.

Mileage Logs – Hard Copy or Soft Copy?

To quickly answer the question, IRS accepts both hard copies and soft copies, as long as the information you provided in your logs are complete.

It is advisable to keep your mileage sheets because you might need them up to five years after you file a deduction, in case the IRS has an inquiry on your records.

Bearing that in mind, a physical mileage book can get lost or damaged or misplaced more easily.

Keeping a digital copy on your PC, USB drive, mobile phone, or even a cloud-based storage system like Google Drive will ensure that you have access to your logs on demand, without risk of losing them.

If you find manually recording your logs too time consuming, try one of the better automatic mileage tracking apps like GOFAR.

GOFAR can help you kate note of how much your 2018 mileage rate deductions are

Deducting Using Your Actual Expenses Instead of the Standard Mileage Rate

As already mentioned, taxpayers have the option to deduct their actual vehicle expenses, but you will need a thorough record of all vehicle-related costs, including scheduled maintenance and emergency repairs.

From there, you will need to define what percentage of your total mileage is qualified as business mileage, medical mileage, and charitable mileage, and then deduct that percentage on your taxes.

Fact: When the check engine light comes on it spells bad news. There’s something wrong under the hood. You feel frustrated and paranoid. And often confused about your next course of action.

Could be a loose gas cap triggering on the check engine light – easy fix.

However, it could also mean that your catalytic converter is faulty (expensive to repair), or the oxygen sensors are broken, among other car issues.

Correctly identifying these car issues is crucial. And GOFAR should be your little buddy.

It checks your car and reports on over 300 common car issues – In. Plain. English. Which means you can make timely repairs and avoid unnecessary expenses.

Keep reading to discover these common check engine light issues.

Failed Catalytic Converter

A catalytic converter is a simple yet costly part of the exhaust system that converts carbon monoxide into carbon dioxide in the combustion chamber

To prevent your catalytic converter from failing, observe regular car maintenance. Also, drive your car on the highway as often as is convenient to prevent clogging the catalytic converter.

If you hear unusual sounds while driving or observe discoloured smoke from the exhaust, then your catalytic converter is most likely failing. Ultimately, the check engine light will come on.

Related: Car Warning Lights Resource Centre

Faulty Spark Plugs and Wires

Spark plugs and wires should be replaced after a few years of use or when you hit about 10,000 miles. They are very affordable.

Spark plug wires transfer electricity from the coil to the spark plug. Without them, the fuel and air mixture in the cylinders can’t ignite.

When the spark plugs and wires are faulty, you’ll notice a decline in your car’s performance, engine misfire, poor fuel economy, or even a declining throttle response.

Failure to address these warning signs can lead to the damage of expensive car parts such as the catalytic converter.

Loose Gas Cap

Your check engine light might be because of a loose gas cap
Photo courtesy of Pexels Images by Skitterphoto

A loose gas cap is a common cause for the check engine light to come on. Maybe you’ve just come from the gas station and you forgot to fasten the gas cap properly. It sure is a simple mistake but it will trigger your check engine light.

But why? Because your gas cap is part of your car’s fuel delivery system. It prevents gasoline fumes from escaping the fuel tank. And also maintains the correct pressure in the whole fuel system.

Therefore, if your gas cap is loose after fueling up, tighten it and keep driving. The check engine light will go off after about 15-20 miles of driving.

If it’s faulty, buy a new one in your nearest store. Many are universal-fit gas caps and they don’t cost much.

Failing Mass Air Flow Sensor

The mass air flow sensor is a small car part that could easily fit on the palm of your hand yet is very costly to replace. It is a key component of the engine and onboard vehicle computer.

The mass air flow sensor regulates and measures the amount of air the engine receives and the amount of fuel injected. Without a mass air flow sensor, your car can’t adjust to changes in altitude.

A faulty mass air flow sensor can cause a drastic drop in your car’s fuel economy, cause poor engine performance, and car bucking/hesitation while in motion.

Faulty Alternator

An alternator converts direct current alternating current – DC to AC. Besides a car battery in good working condition you also need a good alternator with properly functioning electrodes.

The two work together to supply power to your car’s entire electrical system including the instrument panel, interior lights, the heating and AC controls.

In a nutshell, the alternator helps to regulate the electricity necessary for the proper operation of your car.

A faulty alternator not only turns the check engine light on, it also risks your safety. If the alternator fails when you’re driving, the car radio will go off, the interior lights will dim, and you will experience extreme difficulty in driving.

The reason being all power is lost. Power brakes and power steering won’t function properly anymore.

Ignition Coil Issues

An ignition coil generates electricity that the spark plugs use to ignite the fuel and air mixture in the cylinders.

The number of ignition coils in a vehicle depends on the car model. Classic cars have one ignition coil, but for modern cars it depends. A V8, for example, has 8 separate coils, the Bugatti Chiron has 16 ignition coils!

Regardless of the number of ignitions coils a car has, if one malfunctions, the check engine light will come on.

Some of the symptoms your car will exhibit are engine misfires and car hesitation under heavy acceleration.

However, if you have a vehicle that runs on diesel, then it has neither ignition coils nor spark plugs.

Aftermarket Alarm Issue

A well-functioning alarm system comes with peace of mind. On the flip side though, if you have an aftermarket alarm or one that’s hasn’t been installed properly, havoc can set in.

A faulty alarm system will drain the battery, prevent your vehicle from starting, and ultimately turn on the check engine light.

Can you really tolerate the alarm going off at night when you are fast asleep just because a cat or possum leapt on the hood? Probably not!

Therefore, if you’re experiencing similar issues with your car alarm, have it fixed, installed again, or replaced by a certified auto electrician.

Vacuum Leak

Has your car suddenly began to surge or settle at an abnormally high RPM? Chances are you have a vacuum leak.

You see, each car has a vacuum system that helps to lower harmful emissions by directing fumes while gasoline evaporates through the engine. The vacuum also operates the brake booster.

The vacuum hoses often dry and crack over time, more so when exposed to extreme hot or cold conditions, causing leaks. Cracked fittings and loosely fitted connections also cause vacuum leaks.

The good news is that the vacuum lines don’t cost much. But, the process of tracing the source of the leak is time-consuming.

Bad Oxygen Sensor

A faulty oxygen sensor leads to bigger problems with your car. Apart from turning on the check engine light, your fuel economy may drop by a whopping 40%. Which means expensive mileage and poor performance.

Although a car with a faulty oxygen sensor will continue to run, you need to have it replaced ASAP. Failure to do so can damage crucial parts such as the catalytic converter and spark plugs.

The causes of a bad oxygen sensor are internal leaks, or using contaminated fuel with high concentrations of ethanol or burning oil.

Exhaust Gas Recirculation Valve (EGR) Failure

The exhaust gas recirculation system helps the car engine run more efficiently by lowering the quantity of nitrogen oxide exiting the engine.

It also lowers the number of harmful emissions leaving the combustion chambers and also directs back the hot exhaust gases.

If your EGR valve gets clogged or fails completely, you can clean it up or replace it. It takes a short time and doesn’t require mechanical expertise.

Dead Battery

A good quality battery lasts longer and needs no maintenance. But without a battery, you can’t start your car! It’s that crucial.

If the car battery is faulty, you will notice the check engine light has come on. Just buy a new one or charge it if it’s still in good working condition.

Ideally, this should fix the issue and turn off the check engine light.

My Check Engine Light Is on – Now What?

The easy, common yet expensive route to take is to call your mechanic and book an appointment at the repair shop, right?

But here’s the good news: you can often skip going to the repair shop by diagnosing all your car issues yourself. Even if you’re not mechanically inclined.

How? The answer is an affordable little gadget called GOFAR.

Spend a few dollars on GOFAR, an OBD II scanner, download the GOGAR app to your phone and you are ready to play detective!

GOFAR will alert you when there’s a problem with your car so that you deal with it BEFORE it becomes expensive.

Better still, all the car problems will be explained in Plain English.

So, GOFAR Tells Me When I Should Fix My Car?

Affirmative! GOFAR monitors faults in your car every 2 seconds. It is a reliable and safe solution.

You will receive error codes on over 300 common issues with your car.

Check whether your car is compatible or learn more about understanding your dashboard symbols and car warning lights .

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