As a rideshare driver for Uber, Lyft, or DoorDash, you’re technically running a small business. And just like any business owner, you’re eligible to deduct certain expenses from your taxes to reduce your taxable income. Understanding these deductions can help you keep more of what you earn and ensure that you’re not paying more than you owe at tax time.
Here are some key tax deductions every rideshare driver should be aware of:
1. Mileage and Vehicle Expenses
One of the biggest deductions available to rideshare drivers is related to the mileage and vehicle expenses you incur while driving for work. You have two options to calculate this deduction:
Standard Mileage Rate
The IRS sets a standard mileage rate each year, which you can apply to the miles you drive for business purposes. This rate includes gas, oil, maintenance, and wear-and-tear on your vehicle. In 2025, the IRS standard mileage rate is 58.5 cents per mile for business driving.
Actual Vehicle Expenses
If you prefer, you can deduct the actual costs of operating your vehicle, including:
- Gas
- Repairs and maintenance
- Insurance
- Depreciation
- Registration fees
- Tolls and parking fees
Be sure to keep accurate records of your mileage, including mileage logs and odometer readings, to back up your deductions.
2. Mobile Phone and Service
As a rideshare driver, your smartphone is essential for navigating, accepting rides, and communicating with passengers. The IRS allows you to deduct a portion of your cell phone bill if you use your phone for business purposes.
If you use your phone 80% of the time for rideshare work and 20% for personal use, you can deduct 80% of your phone bill as a business expense. Just make sure to keep records and be realistic about the percentage of time you use your phone for business.
3. Tolls and Parking Fees
As you drive passengers from place to place, you may encounter tolls or need to park in metered spots. Fortunately, these expenses are deductible.
You can deduct the cost of tolls and parking fees that are incurred while working, as long as the trip is related to your rideshare business. Keep track of receipts and payment records, as these expenses can add up over time.
4. Car Washes and Detailing
If you’re a rideshare driver, it’s important to keep your vehicle clean for your passengers. Fortunately, car washes and detailing services are tax-deductible as part of your vehicle maintenance.
If you pay for a car wash or detailing to keep your car looking its best for riders, these expenses can be deducted as vehicle-related expenses.
5. Supplies for the Car
Small supplies you keep in your car for your rideshare passengers—like water bottles, chargers, or snacks—can also be deductible. While these might seem like small expenses, they can add up throughout the year, especially if you’re driving full time.
For example:
- Phone chargers for passengers
- Water bottles or other refreshments for riders
- Car seat covers, air fresheners, and other comfort items
Keep a detailed log of these expenses, and make sure they’re specifically for your business.
6. Rideshare Fees and Commission
Both Uber and Lyft charge fees and commissions for the service they provide. These are typically automatically deducted from your earnings, but you can still deduct these fees as part of your business expenses when you file your taxes.
7. Health Insurance (If Self-Employed)
As an independent contractor, you’re responsible for your own health insurance. Fortunately, you may be able to deduct the cost of your health insurance premiums if you’re self-employed. This can include coverage for your spouse, children, and other dependents.
8. Home Office Deduction
If you use part of your home to manage your rideshare business, you may be eligible for a home office deduction. This is available if you have a dedicated space in your home used exclusively for business purposes, such as tracking income, scheduling rides, and organizing finances. You can deduct a portion of your home expenses like rent, utilities, and internet based on the percentage of your home used for business.
Conclusion
As a rideshare driver, keeping track of your tax-deductible expenses can make a big difference in your bottom line. Be sure to keep detailed records of your mileage, expenses, and receipts, and consult with a tax professional to make sure you’re maximizing your deductions.
At EcoDriven, we support drivers by providing eco-friendly hybrid rentals that help you save on gas and reduce your environmental impact. Driving for Uber, Lyft, or DoorDash has never been more cost-effective or sustainable.