Auto Operating Expenses

As every rideshare driver knows, in addition to direct vehicle expenses, there are a number of other costs you may incur operating your driving business. The good news is that all the money you spend that is directly related to your rideshare driving can be deducted when it comes time to file your taxes.


Speedy Wheeler used his personal cell phone for his Uber business last year. Speedy estimates 50% of his phone usage can be attributed to Uber. Accordingly, if he paid his cell phone carrier $1,500 last year for service, $750 would be deductible on his Schedule C.


Diana is a Lyft driver who uses a vehicle belonging to a fleet owner. She regularly purchases water bottles, mints and gum for her passengers. These costs are fully deductible operating expenses for Diana.


Mac received a speeding ticket while trying to maximize his fares during a 5x surge. Luckily for Mac he made enough money that day the ticket didn't matter. Unfortunately, he won't be able to deduct the ticket when he prepares his tax return.


Nicole delivers groceries for Instacart. Nicole fills up her tank every morning before she begins her day of shopping and deliveries. Regardless of whether Nicole is deducting her actual auto expenses, or using the standard mileage rate to calculate her deduction, her daily tank of gas would not be considered a deductible operating expense since these costs will be accounted for in either her mileage or actual vehicle expense deduction.


Eddie is an Author who works from home and occasionally uses his car to drive to book signing events. After reading 99deductions, he remembered that ride share drivers could deduct things like AAA membership fees and their cell phone plan, so Eddie figured he could do the same. However, since Eddie is in the business of writing, not driving, he would not eligible for these deductions.


  • Common operating expenses for rideshare drivers may include a mobile phone, wireless plan, drinks for passengers, car washes, AAA membership fees, parking, tolls, etc.
  • Keep in mind that any expenses you incur directly related to your vehicle, such as lease payments, car insurance, gas, repairs and maintenance, depreciation, etc. are not considered operating expenses and will be deducted as part of your $.56 per mile or as part of your actual auto expense deduction.
  • Operating expenses will only be deductible to the extent they relate to your business activities.
  • Unless you are in the rideshare business, or transporting customers in your business vehicle is a key component of your operations, these auto related operating expenses would not be deductible for your business.
  • Apps like Hurdlr help you easily track these expenses so you can minimize your taxes by maximizing your deductions.

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