What is a Ride-Sharing Operating Business?
December 3, 2021
Uber and Lyft!
Uber and Lyft drivers are considered self-employed. Therefore, they are required to report their self-employment (opens in a new tab) income on form T2125 - Statement of Business or Professional Activities.
Are food delivery services self-employed?
Uber eats, SkipTheDishes and many others are considered self-employed businesses that must be reported for taxes.
How to prepare Income Taxes as a Ride-Sharing (opens in a new tab) Driver
To prepare, you should gather documents related to your income, mileage and other tax-related expenses, such as:
- The Annual Tax Summary from Uber, Lyft, or your Ride-share partner
- Receipts, bills, and statements for all tax-deductible expenses
- The total vehicle mileage that was driven for the year (E.g., Odometer reading from the beginning of the year and at the end of the year)
- Number of Kilometres driven for business and personal
- The GST/HST number (business number)
What kind of expenses can be claimed as a Ride-Sharing Driver
The annual statement will include costs such as:
- Booking fees
- Service fees
- Ride sharing fees
You can also report other related expenses such as:
- Meals (food or water services provided for clients)
- Parking fees during pick-up and delivery
- Telephone (air-time for business use only)
- License fees to work as a driver
Regarding vehicle expenses:
If you own the vehicle, you cannot deduct the total cost of the car as expenses. Instead, you will need to determine the Capital Cost Allowance (CCA) you may claim. Instead of claiming the price as an expense, you depreciate the value over the years. Choose the depreciation class type (opens in a new tab) depending on the type of vehicle - a passenger vehicle, a motor vehicle, or a zero-emission vehicle.
Ride-Sharing is a great way to create income. Know what tax rules apply when declaring this business to make the most of your new occupation!