Uber, Lyft, Doordash, Postmates drivers: URGENT PPP RULE CHANGES

In this 4-minute read:

  • Can app-based drivers (Uber, Lyft, Doordash, etc.) get PPP loans?
  • Are there any other eligibility requirements drivers need to know?
  • New updates to the Paycheck Protection Program could give app-based drivers more funding
  • Additional PPP loan resources for Uber, Lyft, Doordash, and Postmates drivers

As the coronavirus pandemic continues to loom over us, it is still impacting businesses’ operations and causing financial hardship for many throughout the country. Whether you live in a state that is still experiencing mandatory shutdowns or people are just continuing to be cautious to avoid catching COVID-19, we are all feeling it. 

Because of this, the Paycheck Protection Program has been renewed to provide funding to business owners, independent contractors, sole proprietors, and self-employed individuals. The extended application deadline is May 31, 2021. 

Throughout this entire program, there has been confusion as to whether or not Uber, Lyft, and other drivers qualify as independent contractors and if they should be eligible to receive PPP funds. 

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Can app-based drivers (Uber, Lyft, DoorDash, etc.) get PPP loans?

Most app-based drivers are classified as independent contractors and report their income with a 1099 and/or Form 1040, Schedule C. If you fall into that category, you are eligible to apply for forgivable PPP loan. 

There has been some recent confusion on this topic, particularly in California with a court order in August 2020 for Uber and Lyft to classify their drivers as employees. However, this order was reversed with the passing of Proposition 22 and app-based drivers remained independent contractors. Read more about Prop 22 and PPP loans.

If you are in a situation where you are a delivery or other type of driver that is classified as an employee (you receive a W2 from your employer), then you would not qualify for the PPP loan, unless you do other 1099/contract work on the side. Read more about the PPP loan for DoorDash drivers and other app-based drivers.

Are there any other PPP loan eligibility requirements drivers need to know?

Currently, business owners, independent contractors, and self-employed individuals have the opportunity to apply for first or second draw PPP loans. First draw loans are the first time PPP loans and second draw loans can be applied for if you’ve already received a first draw loan. 

For each of these loans, there are more requirements than just being a business owner or independent contractor. 

First draw loan eligibility requirements (this is not an exhaustive list):

  • You must be based in the U.S. and must have been in business as of February 15, 2020

Second draw loan eligibility requirements:

  • You have already received a PPP loan
  • Your first PPP loan funds are spent on approved costs by the time you receive your second draw loan disbursement
  • You can show a revenue reduction of 25% or more in any quarter of 2020 compared to 2019
  • (You also must have fewer than 300 employees)

We have some FAQs on PPP loan eligibility that include other special circumstances that may apply:

New updates to the Paycheck Protection Program could give app-based drivers more funding

Recent updates to the Paycheck Protection Program may give app-based drivers additional benefits as they apply for their PPP loans:

  • Applicants with student loan delinquency can now send in an application for the PPP loan
  • Non-citizen business owners who are lawful residents and have an ITIN can apply for PPP loans
  • Applicants who report their income with IRS Form 1040 Schedule C (i.e., most app-based drivers) will be able to use their GROSS (instead of net) profits to determine their max loan amount. This can make a big impact on the amount you can borrow, depending on how much you make and how you have reported your profits. Read more about the latest 1040 Schedule C/PPP loan rules changes, and see the new rules, and the new PPP application form for Schedule C applicants.

Additional PPP loan resources for Uber, Lyft, DoorDash, Postmates, and other app-based drivers

Learn more about the Paycheck Protection Program and how it can help you as an independent contractor. We’ve put together several resources to help small businesses and independent contractors alike:

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