Delivering meals with Skip the Dishes can be a source of decent income. But exactly how much can Skip the Dishes drivers earn? This is a constant topic of debate among gig drivers! Here we sketch out ways to calculate anticipated income from Skip driving.
Skip the Dishes pays its Couriers on a trip-by-trip basis. Each trip’s payment is a sum of 3 parts:
- Transit Pay: The driver receives a core amount tied to delivery fee, time & distance. (And there is sometimes a Top-Up amount added to the base Transit Pay, especially when there is no tip.)
- Bonuses: Skip sometimes offers drivers an extra amount for specific times & places.
- Tips: Most Skip customers add a tip, which Skip passes on 100% to the driver.
So: Skip pays its drivers Base Fare + Bonus + Tip for each trip.
Here are some recent fare examples from Toronto. (Uber’s formula can vary slightly from one province to another):
- 3.5 km: Transit Pay $4.50 + Tip $2.00 = $6.50
- 4.4 km: Transit Pay $3.99 + Tip $4.33 = $8.32
- 5.8 km: Transit Pay $4.19 + Tip $5.66 = $9.85
- 11.5 km: Transit Pay $7.10 + Tip $3.00 = $10.10
For convenience, drivers often use a quick method of measuring income in dollars per hour. This is computed by dividing the total amount paid by Skip in a single day/week by the number of hours online (logged into the app).
(Day) Skip pays me $135. I was online for 6.25 hours. So I “earned” $21.60/hour.
(Week) Skip pays me $955. I was online for 47.5 hours. So I “earned” $20.11/hour.
True “Work-Hours”: In reality, some online time is often used for non-work activities (e.g. sitting reading email, doing a small errand, or posting in the Gig Café). In the above example (where I earned $135 on one day), let’s suppose I used about 30 minutes between orders for various other tasks. And I consumed another 30 minutes going to/from my regular starting location (the gig equivalent of commuting). So even though I was online for 6.25 hours, I was actually “working” for only 5.25 hours. We think this is a more realistic way to measure “work-hours”. In this case, I actually earned $25.71/hour.
Of course, this method oversimplifies the estimation of income. For one thing, it does not factor in expenses. Nevertheless, calculating average “income per hour” is a useful way to understand comparative earning rates.
To arrive at net (actual) income, I must subtract all gig-related expenses from my total Skip income. These expenses fall into 4 general categories:
- Operational Expenses: Costs directly tied to my Skip mileage. In other words, the more I drive, the more I pay. This is mainly fuel. (Remember, delivering meals usually involves more kilometers than delivering groceries, but less than driving passengers.) I probably should allocate 10-15% of what Skip pays me to cover fuel (unless I drive a hybrid!)
- Fixed “Overhead” Expenses: Costs which remain the same regardless of how many kilometers I drive (e.g. monthly data plan, annual vehicle registration, private car insurance).
- One-time Expenses: Costs such as purchase of a smartphone. Also, there will be car repairs along the way. And if I get a ticket (or even worse, have an accident), I must include this as a one-time expense.
- Depreciation: The more I drive my car, the less it is worth. I must be realistic about this significant hidden expense.
Business/Personal Balance. It is essential to analyze my car’s total kilometers, and determine what percentage is for gig driving and what percentage is for personal use. Assuming the balance is 50/50, then all amounts for fixed expenses, one-time expenses and depreciation should be reduced by 50% before subtracting them from my Skip income.
Let’s apply all of the above factors to calculate the net (actual) income of an average part-time Skip the Dishes driver.
- I drive about 20 “work-hours”/week
- I drive the same work-hours for 50 weeks/year
- Skip pays me 50 x $450 = $22,500
My total annual Skip income = $22,500
- I use my car 50/50 for Skip/personal
- Fuel: 12.5% of my Skip income = $2,813/year
- Fixed Expenses (monthly & annual): Average $400/month x 50% = $200/month = $2,400/year
- One-time Expenses (e.g. tickets & repairs): $1,000 x 50% = $500/year
- Depreciation: I bought my car for $15,000. I will sell it in 3 years for $6,000. Depreciation is $9,000 ($3,000/year) x 50% = $1,500/year
My total annual gig-related expense = $2,813 + $2,400 + $500 + $1,500 = $7,213
My net annual Skip income (total income minus expense) = $22,500 – $7,213 = $15,287
At tax time, I can write off many of my expenses, reducing my income tax:
- Without deducting expenses, if my Skip income is $22,500, my income tax might be $4,000.
- But by smartly deducting expenses, I might reduce my taxable income to $15,287, and then pay only $3,000 income tax.
- That’s a tax saving of $1,000 – which theoretically I can then “add” to my net income.
My final net annual Skip income (for 20 work-hours/week) = $15,287 + $1,000 = $16,287
All of these computations may be a bit oversimplified. But if they are accurate for my situation, here is how I would calculate my actual hourly income (after covering all gig-related expenses):
- I drive 20 work-hours/week x 50 weeks = 1,000 hours
- My final net income (before paying income tax) = $16,287
- My average income = $16.29/hour (BETTER THAN MINIMUM WAGE)
Of course, in every situation there may be some variables which increase/decrease this average hourly amount. Each driver must do their own calculations based on their own realities.
However, at Gig Drivers of Canada, we believe many Skip the Dishes drivers can earn MORE than $16.29/hour. As time goes by, you will gain experience and benefit from useful strategies in the Gigapedia and Gig Café, and your hourly income will increase.
Once you are confident Skip the Dishes may be a good fit for you, then you might as well go ahead and take the next step: SIGN UP! It only takes a few minutes to set up your Skip Account, providing basic information to establish your driver profile.
Don’t worry – Skip the Dishes does not require fees or deposits, and there are no binding obligations or legal traps. At any point along the way, you can pause to get answers to your questions. But if you’re ready to move forward, the sooner you sign up and launch the registration process, the sooner you’ll be out on the road earning money.
(Note: When you click the link to go to Skip’s sign-up page, the sign-up address will automatically include a Referral Code W6JDRA. This tells Skip the Dishes you were referred by Gig Drivers of Canada. We would be grateful if you will use that sign-up page (or enter that Referral Code in a sign-up box), so Gig Drivers can receive recognition and a small referral reward to help cover our expenses. Thank you very much!)