BO S TO N
COLLEGE

LAW

BOSTON COLLEGE LAW SCHOOL
LEGAL STUDIES RESEARCH PAPER SERIES

RESEARCH PAPER 391
February 10, 2016

The Tax Lives of Uber Drivers: Evidence from
Internet Discussion Forums

Shu-Yi Oei
Hoffman F. Fuller Associate Professor of Tax Law
Tulane University Law School

Diane M. Ring
Professor
Boston College Law School

 SYO & DMR Working Draft 2/16/16. Subject to revision. Please ask permission before
citing.

THE TAX LIVES OF UBER DRIVERS:
EVIDENCE FROM INTERNET DISCUSSION FORUMS
Shu-Yi Oei * & Diane M. Ring **
ABSTRACT
In this Article, we investigate the tax issues and challenges facing Uber
and Lyft drivers by studying their online interactions in three internet
discussion forums. Using descriptive statistics and content analysis, we
examine (1) the substantive tax concerns facing forum participants, (2) how
taxes affect their driving and profitability decisions, and (3) the degree of user
sophistication, accuracy of legal advising, and other cultural features of the
forums.
We find that while forum participants displayed generally accurate
understandings of tax filing and income inclusion obligations, their approaches
to expenses and deductions were less accurate and more varied in
sophistication and willingness to comply with tax law. Forum participants also
frequently discussed whether driving was profitable and exhibited a range of
awareness concerning how taxes affected profitability. Finally, while the
forums contained a surprising degree of sophisticated and accurate tax and
legal advice, they also contained many examples of inaccurate or confusing
information. It is thus uncertain whether readers can successfully distinguish
between accurate and inaccurate advice dispensed in the forums.
Based on our findings, we make tentative recommendations for
effective tax administration in the ridesharing and related sectors, including
use of industry-specific guidance, clarification of how existing tax rules apply
to ridesharing, and guidance on Form 1099-K interpretation. We analyze the
implications of our findings regarding taxes and profitability for Uber’s
business model and its potential regulation. Finally, we discuss the possible
impacts of targeted tax compliance initiatives on internet communities.

*

Hoffman F. Fuller Associate Professor of Law, Tulane Law School.
Professor of Law & The Dr. Thomas F. Carney Distinguished Scholar, Boston College Law School.

**

 TABLE OF CONTENTS

Introduction ......................................................................................................................... 3
I.

Understanding the Ridesharing Sector: Background and Research Questions ........... 7
A.

Background: On-Demand Ridesharing Services.................................................. 7

B.

Research Questions ............................................................................................ 12

II.

The Study of Internet Forums: Research Methodology......................................... 13
A.

The Study of Internet Discussion Forums: Possibilities and Limitations .......... 13

B.

Selection of Internet Forums for Study: Reddit, Uberpeople, and TurboTax .... 15

C.

Selection of Tax-Related Discussion Threads for Analysis ............................... 18

D.

Coding of Discussion Threads ........................................................................... 20

III.

The Tax Lives of Uber Drivers: Statistical Analysis of Data ................................ 21

A.

Reddit ................................................................................................................. 21

B.

Uberpeople ......................................................................................................... 24

C.

TurboTax Intuit .................................................................................................. 26

IV.

The Tax Lives of Uber Drivers: Content Analysis of Data ................................... 26

A.

Tax Issues Confronting Ridesharing Drivers ..................................................... 27

B.

Role of Taxes in Decision Making ..................................................................... 43

C.

Tax Sophistication and Tax Compliance Culture .............................................. 54

V.

Analysis and Recommendations: Compliance, Money, and Community in the

Internet Forums ................................................................................................................. 63
A.

Compliance......................................................................................................... 63

B.

Money and Profit ................................................................................................ 66

C.

Community......................................................................................................... 68

Conclusion ........................................................................................................................ 70

2

 INTRODUCTION
The past few years have seen the meteoric rise of Uber Technologies Inc., a
company that allows consumers to request rides from registered peer drivers using the Uber
app. From its beginnings in San Francisco in 2009, Uber has grown to become one of the
most highly valued startups in the world. According to one study, more than 160,000
drivers were “actively partnering” with Uber in the United States as of the end of 2014,
and U.S. drivers received $656.8 million in payments from Uber in the last three months
of 2014. 1 As of December 30, 2015, Uber had provided one billion rides worldwide. 2
Uber, of course, is simply the most prominent example of a new model of
production and consumption of goods and services often referred to as “sharing,”
“collaborative consumption,” or “peer-to-peer consumption.” By employing internet and
mobile phone platforms that reduce transaction costs, this model enables individuals to
easily offer and enjoy goods and services—anything from homes and rides to bathrooms,
Wi-Fi, and even kittens. 3 As peer-to-peer consumption has proliferated, academics and
policymakers have begun to tackle the legal and regulatory questions that it raises. 4

1

Jonathan V. Hall & Alan B. Krueger, An Analysis of the Labor Market for Uber’s Driver-Partners in the
United
States
(Princeton
Univ.,
Working
Paper
No.
587,
2015),
available
at
http://dataspace.princeton.edu/jspui/bitstream/88435/dsp010z708z67d/5/587.pdf. “Actively partnering” is
defined as the provision of at least four trips via UberX or UberBLACK to passengers in a given month. Id.
According to the study, the rate of growth in drivers signing up to drive is rising exponentially. Id.
2
https://newsroom.uber.com/one-in-a-billion/.
3
See, e.g., http://www.airpnp.co/ (toilet sharing); https://www.airbnb.com/ (home sharing);
https://corp.fon.com/en (Wi-Fi sharing); https://newsroom.uber.com/uberkittens-are-back/ (kittens).
4
See, e.g., Jordan M. Barry and Paul L. Caron, Tax Regulation, Transportation Innovation, and the Sharing
Economy, 81 CHI. L. REV. DIALOGUE 69 (2015); Christopher Koopman et al, The Sharing Economy and
Consumer Protection Regulation: The Case for Policy Change, 8 J. BUS., ENTREPRENEURSHIP & L. 529
(2015); Stephen Miller, First Principles for Regulating the Sharing Economy (Feb. 20, 2015), 53 HARV. J.
OF LEGIS. (forthcoming 2016); Stephen Miller, Transferable Sharing Rights: A Theoretical Model for
Regulating Airbnb and the Short-Term Rental Market (Oct. 24, 2014) (unpublished manuscript), available
at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2514178; Shu-Yi Oei & Diane M. Ring, Can Sharing
Be Taxed?, 93 WASH. U. L. REV. (forthcoming 2016); Sofia Ranchordas, Does Sharing Mean Caring?
Regulating Innovation in the Sharing Economy, 16 MINN. J.L. SCI. & TECH. 413 (2015); Sofia Ranchordas,
Innovation-Friendly Regulation: The Sunset of Regulation, the Sunrise of Innovation, 55 JURIMETRICS 201
(2015); Daniel E. Rauch & David Schleicher, Like Uber, But for Local Government Policy: The Future of
Local Regulation of the ‘Sharing Economy,’ 76 OHIO ST. L.J. (forthcoming 2016); Kellen Zale, Sharing
Property, 87 U. COLO. L. REV. (forthcoming 2016); Brishen Rogers, The Social Costs of Uber, 82 U. CHI. L.
REV. DIALOGUE 85 (2015); Abbey Steimer, Betwix and Between: Regulating the Sharing Economy, (Ind.
Univ.
Kelley
Sch.
of
Bus.
Research
Paper
No.
15-6,
2014),
available
at
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2535656.

3

 An issue of increasing importance is the impact of the peer-to-peer economy on the
lives of those providing goods and services via these platforms. There is some evidence
that this new economy has affected the nature of work and has resulted in the expansion of
independent contractor jobs. 5 Commentators refer to the rise of work through these
platforms as the “1099 economy,” “independent contractor economy,” or “gig economy.” 6
Academics, courts, regulators, and commentators are just now focusing on the legal issues
confronting 1099 economy workers. 7 For example, courts and tribunals are struggling with
the question of whether ridesharing drivers should be classified as employees or
independent contractors for purposes of labor and tax law. 8
In this Article, we contribute to the growing legal literature on 1099 or gig economy
workers by studying the ways in which Uber and Lyft drivers navigate the tax system. We
investigate the tax issues and challenges faced by these drivers by examining the
discussions and interactions that take place among drivers and other participants in three
internet discussion forums: Uberpeople.net, the Uberdrivers subreddit on Reddit.com, and
the Intuit TurboTax AnswerXchange Forum. Internet discussion forums can provide a
timely picture of the tax and related issues that concern ridesharing drivers, particularly in
an environment where drivers are learning how to navigate an emerging sector and where

5

See, e.g., Eli Dourado & Christopher Koopman, Evaluating the Growth of the 1099 Workforce (Mercantus
Center, George Mason Univ. 2015), available at http://mercatus.org/sites/default/files/Evaluating-Growth1099-Dourado-MOP.pdf; Ian Hathaway, The Gig Economy is Real If You Know Where to Look (Aug. 13,
2015),
https://hbr.org/2015/08/the-gig-economy-is-real-if-you-know-where-to-look;
http://www.bloombergview.com/articles/2015-06-26/the-mystery-of-the-multiple-jobholder.
6
“Sharing economy” is the term most commonly used, but does not capture the commercial nature of the
exchange. The same applies to the term “collaborative consumption.” Alternative terms such as “1099
economy” or “gig economy” have been urged as replacements, but no single usage has prevailed. This Article
generally uses the terms “1099 economy” and “gig economy” to describe the sector.
7
See, e.g., Brishen Rogers, Employment as a Legal Concept (Temple Univ. Leg. Stud. Research Paper No.
2015-33) available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2641305; see also THE 2015 1099
ECONOMY WORKFORCE REPORT (May 20, 2015).
8
Cotter v. Lyft, Inc., Docket No. 3:13-cv-04065 (N.D. Cal. Sept. 3, 2013); O’Connor v. Uber Technologies,
Inc., Docket No. 3:13-cv-03826 (N.D. Cal. Aug.16, 2013); Berwick v. Uber Technologies, Inc., No. 11-46739
EK, 2015 WL 4153765, at *1-8 (CA. Dept. Lab. June 3, 2015), on appeal to Cal. Superior Ct. No. 15-546378
(June 16, 2015); Alatraqchi v. Uber Technologies, Inc., No. CGC13527887, 2013 WL 7201338, at *1-2
(Cal.Super. December 20, 2013). For Fedex and taxicab litigations, see Slayman v. Fedex, Inc., 765 F.3d
1033, 1042-1046 (9th Cir. 2014); Sebago v. Boston Cab Dispatch, Inc., 471 Mass. 321, 327-328 (Mass.
2015).

4

 there may be a lag in obtaining tax return and other data. 9 The anonymous nature of these
forums may cause forum participants to be more forthright than they might be in surveys
or in-person interviews. Substantive tax issues aside, online discussion forums are also
interesting as a socio-legal phenomenon themselves. 10 For example, they can serve as
primary source evidence of how the process of seeking and giving tax advice functions on
an internet discussion board.
We selected tax-related discussions from each of these internet forums using a
search methodology tailored to each forum. We then studied this self-assembled dataset
using a combination of descriptive statistics and qualitative content analysis, focusing on
three key research questions: (1) the main substantive tax issues and questions discussed
by forum participants, (2) the ways taxes factor into forum participants’ analyses of
profitability and their decisions to drive for ridesharing platforms, and (3) the dominant
cultural attitudes displayed by forum participants, including their levels of sophistication,
attitudes towards compliance and risk taking, and how they expressed disagreement and
corrected each other’s errors.
We find that forum participants displayed generally accurate understandings
regarding tax filing and income inclusion obligations. However, their approaches to
expenses and deductions (particularly mileage calculations, expenses on the businesspersonal borderline, and documentation) were less accurate and more varied in
sophistication and willingness to comply with tax law. Forum participants also engaged in
frequent discussions about whether driving was ultimately profitable and exhibited a range
of awareness of how taxes affected their bottom-line profitability. They used metrics
developed by tax law (in particular, the IRS standard mileage rate) as rough proxies in
estimating other expenses of driving. Tax burdens also played a role in shaping the broad
online consensus that it was preferable to drive part time rather than full time. Finally,
while the forums contained a surprising degree of sophisticated and accurate tax advice
(including tax advice marketed by forum users claiming to be experts and professionals),

9

See generally Tom Perez, Innovation and the Contingent Workforce (U.S. Dep’t of Labor Blog, Jan. 25,
2016) http://blog.dol.gov/2016/01/25/innovation-and-the-contingent-workforce/ (Bureau of Labor Statistics
and Census Bureau plans to study contingent workforce as part of May 2017 Current Population Survey).
10
See sources cited infra note 45.

5

 they also contained many examples of inaccurate, confusing, or misleading statements
about tax law. It is thus uncertain whether forum readers and participants are able to
successfully distinguish between accurate and inaccurate advice dispensed on the
discussion boards.
Based on our findings, we make three sets of recommendations and observations.
First, we make suggestions for effective tax administration in the on-demand ridesharing
and related sectors. 11 The conversations we observed suggest that industry-specific IRS
guidance, IRS guidance regarding which technologies and applications may be used to
document mileage and other expense deductions, and IRS clarification with respect to
Form 1099-K issuance and interpretation are fairly simple and uncontroversial steps that
might help alleviate confusion and tax compliance burdens for drivers and other 1099
economy workers. Second, we analyze the implications of our findings regarding how
forum participants assess driver profitability (and the role played by taxes in making this
determination) for Uber’s business model and for potential regulation of ridesharing. 12
Finally, we discuss the role played by internet forums in facilitating learning about tax law
and in disseminating legal information, and we discuss the promise and perils of
intervening in or using internet forums to advance tax administration goals. 13 For example,
we discuss how interventions in internet communities may have unintended impacts on the
culture of such communities. While our insights and recommendations are largely focused
on the on-demand ridesharing sector, many of these observations may be extrapolated to
other parts of the sharing economy as well.
This Article is the first in the legal literature to mine internet discussion forums for
detailed insights into how individuals learn about, interact with, and shape legal systems
through online channels. 14 It is also the first qualitative content analysis of online
interactions among sharing economy workers as they grapple with questions of tax law in

11

See discussion infra Part V.A.
See discussion infra Part V.B.
13
See discussion infra Part V.C.
14
For a non-legal, sociological study of sharing economy labor that investigates online forums, see Alex
Rosenblat & Luke Stark, Uber’s Drivers: Information Asymmetries and Control in Dynamic Work (Oct. 15,
2015) (unpublished manuscript), available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2686227;
see also sources cited infra note 45.
12

6

 an emerging sector. By thickly describing how tax law plays out “in action” on internet
discussion boards, our study opens a window into how ridesharing drivers and other 1099
workers interact and cope with complex tax and related regulatory regimes. 15 This is
particularly valuable because key decisions are being made about the legal and regulatory
fate of such workers based on assumptions about worker preferences and their experiences
with gig work, but these assumptions for the most part remain uninvestigated. By
illuminating the ways in which these small-scale gig workers talk about, engage with, and
confront the tax system, this Article contributes significantly to our understanding of the
realities of 1099 economy work.
In Part I, we describe on-demand ridesharing and state our research questions. In
Part II, we describe our research methodology, including how we chose the internet forums
for analysis, how we selected discussion threads, and how we coded and analyzed the data.
In Parts III and IV, we describe and analyze our findings. In Part V, we discuss the
implications of our findings for tax administration, Uber’s business model, and regulation
of ridesharing. We also examine the potential impacts of targeted tax compliance initiatives
on internet communities and other design considerations.
I.

UNDERSTANDING THE RIDESHARING SECTOR: BACKGROUND AND RESEARCH
QUESTIONS
In this Part, we describe the basic characteristics of the ridesharing sector and state

our research questions.
A.
1.

Background: On-Demand Ridesharing Services

Business Model
The on-demand ridesharing sector involves the hailing of a vehicle for hire using a

mobile app that relies on GPS technology to facilitate the pickup and ride. Uber is widely
acknowledged as the market leader in this sector. 16 The service is currently available in

15

See generally Roscoe Pound, Law in Books and Law in Action, 44 AM. L. REV. 12 (1910).
Uber, https://www.uber.com/; Erin Griffith, Uber v. Lyft: The Credit Cards Don’t Lie, Fortune (Sept. 11,
2014), http://fortune.com/2014/09/11/uber-vs-lyft-the-credit-cards-dont-lie/.
16

7

 approximately 170 U.S. cities and 58 foreign countries. 17 Uber’s basic business model
involves partnering with local owners of licensed private car companies and with
individuals driving their own personal vehicles. Uber does not own the cars, and the drivers
themselves decide whether and when to open the mobile application and accept ride
requests from customers. Drivers are responsible for their own expenses including gas,
equipment maintenance, and repairs.
Uber does, however, set fares, based in part on the level of service provided. UberX
is Uber’s best-known service and allows drivers to use their personal vehicles to offer rides
to customers at fares often significantly lower than taxi fares for comparable trips. 18 To
apply to become an UberX driver all that is required is a driver’s license, a car that satisfies
Uber’s requirements, proper insurance, and clearing a DMV and background check. 19 Uber
also offers other ride services in certain markets: UberBlack is a traditional “Black Car”
service that resembles limousine services. In many U.S. cities, Uber riders also have the
option of UberLUX, a luxury car service; UberSUV, a full-sized luxury SUV; UberTAXI,
a licensed taxicab; UberXL, a non-luxury SUV; and UberPool, a reduced-fare pooled ride
service. 20
A distinctive characteristic of Uber’s fare structure is its use of variable pricing
levels, depending on demand. 21 Under such dynamic or “surge” pricing, changes in fare
price are determined algorithmically when wait times increase and unfulfilled requests start
to rise. These fare increases may occur because of a demand surge during high traffic times
or because of special conditions such as a holiday or inclement weather. 22 Uber tells

17

Uber, https://www.uber.com/cities.
See Alex Wilhem, In Another Strike Against The Competition, Uber Lowers UberX Prices in San Diego,
LA, and DC, Tech Crunch (Oct. 3, 2013), http://techcrunch.com/2013/10/03/in-another-strike-against-thecompetition-uber-lowers-uberx-prices-in-san-diego-la-and-dc/.
19
Uber, http://newsroom.uber.com/drive-with-uber-earn-cash-with-your-car-6/.
20
See generally https://www.uber.com/.
21
Uber, What is Surge Pricing?, https://help.uber.com/h/6c8065cf-5535-4a8b-9940-d292ffdce119.
22
See
Nicholas
Diakopoulos,
How
Uber
surge
pricing
really
works,
http://www.washingtonpost.com/news/wonkblog/wp/2015/04/17/how-uber-surge-pricing-really-works/
(Apr. 17, 2015).
18

8

 customers that its fares include an automatic 20% tip and that there is no need for an
additional tip. 23
In exchange for creating and providing the app-based marketplace for rides, Uber
takes a portion of the gross fares (typically 20%, though this varies by city) generated by
drivers and also deducts a “safe rides” fee. 24 There is some suggestion that Uber may also
be keeping a percentage of the automatic tip amount, and there is an active lawsuit over
this issue. 25 Uber also charges drivers a weekly fee for the use of an Uber-ready
smartphone, although drivers may instead use their own phone and download the Uber
smart phone application. 26
Lyft is Uber’s foremost competitor in the ridesharing market. 27 Uber and Lyft are
similar services 28 and have nearly identical business models. 29 Like Uber, Lyft connects
passengers and drivers through Lyft’s smartphone application. 30 Like Uber, Lyft offers a
basic service (Lyft), a shared ride service (Lyft Line) and a six-passenger premium ride

23

Uber, https://help.uber.com/h/1be144ab-609a-43c5-82b5-b9c7de5ec073; but see Jay Barmann, Now Uber
Drivers
Want
You
To
Tip,
sfist
(Feb.
2.
2015),
http://sfist.com/2015/02/17/now_uber_drivers_want_you_to_tip.php. This tip policy has created some
dissatisfaction among drivers, leading to litigation. See Complaint, Cotter v. Lyft, Inc., Docket No. 3:13-cv04065 (N.D. Cal. Sept. 3, 2013); Complaint, O’Connor v. Uber Technologies, Inc., Docket No. 3:13-cv03826 (N.D. Cal. Aug.16, 2013); Maya Kosoff, Uber's Drivers Say They Don't Get Any Tip Money From
All-Inclusive Fares — And They're Furious, BUS. INSIDER (Sept. 7, 2014 at 3:09pm),
http://www.businessinsider.com/ubers-drivers-say-they-dont-get-any-tip-money-from-all-inclusive-fares2014-9.
24
Douglas MacMillan, Uber Tests 30% Fee, Its Highest Yet (May 15, 2015),
See
also
Uber,
http://www.wsj.com/articles/uber-tests-30-fee-its-highest-yet-1431989126.
https://help.uber.com/h/4fa83c50-ab30-434c-b911-f63ad11cd4d9 (explaining safe rides fee). There is active
litigation pending over the safe rides fee. Philliben et al v. Uber Technologies, Inc., Case No. 3:2014cv05615
(N.D. Cal.). See also Ellen Huet, Uber Fades Class-Action Lawsuit Over $1 ‘Safe Rides Fee’, FORBES (Dec.
27, 2014), http://www.forbes.com/sites/ellenhuet/2014/12/27/uber-class-action-lawsuit-safe-rides-fee/.
25
Caren Ehret et al. v. Uber Technologies Inc., Case No. 3:14-cv-00113, (N.D.Cal.) (customer/plaintiff
claims that Uber misled customers by charging 20% tip that does not go exclusively to the driver).
26
See Uber, https://help.uber.com/h/1eaa91f9-be2e-463d-809a-df7e4cdeb593; Luz Lazo, Uber gives its
drivers a choice to avoid $10 weekly fee for app use, WASH. POST (September 9, 2014) at
https://www.washingtonpost.com/blogs/dr-gridlock/wp/2014/09/09/uber-gives-its-drivers-choice-to-avoid10-weekly-fee-for-app-use.
27
See Jon Kelly, The Uber vs. Lyft War Has Been Won in Silicon Valley (Sept. 3, 2015),
http://www.vanityfair.com/news/2015/09/uber-vs-lyft-war-has-been-won.
28
Farhad Manjoo, Uber and Lyft Have Become Indistinguishable Commodities, N.Y. TIMES BITS (Aug. 28,
2014 at 2:27 pm), http://bits.blogs.nytimes.com/2014/08/28/uber-and-lyft-have-become-indistinguishablecommodities/?_php=true&_type=blogs&_r=1.
29
Lyft v. Uber: What’s the Difference Between These Two Dueling Apps, INQUISITR (Aug. 14, 2014),
http://www.inquisitr.com/1409677/lyft-vs-uber-whats-the-difference-between-these-dueling-apps/.
30
See, e.g., Lyft, https://www.lyft.com/help/article/1450425.

9

 service (Lyft Plus). 31 Like Uber, Lyft also elevates fares during periods when demand is
high, 32 and like Uber, Lyft provides a liability insurance policy for periods when a Lyft
driver is ferrying a customer, as well as contingent liability for the period the Lyft
application is on but the driver has not yet accepted a ride. 33 There are some differences,
however. For example, Lyft customers are prompted to pay within the Lyft application
after the ride, and are able to tip the driver using the app, though a tip is not required. 34 The
Uber application currently does not allow additional tipping. 35 Lyft, like Uber, takes a 20%
cut of the base fare; however, Lyft drivers keep 100% of all tips. 36
A third on-demand ridesharing service was Sidecar, a ridesharing service that
operated on a much smaller scale and was ultimately unable to compete. During 2015,
Sidecar modified its business model to focus on delivery of goods rather than passenger
rides but ultimately ceased operations in December 2015. 37 Sidecar’s closure illustrates the
changing landscape of the ridesharing sector, and leaves Uber and Lyft as the two main
ridesharing services.
2. Tax and Related Issues
Uber classifies its drivers as independent contractors for tax and other purposes. 38
As such, Uber does not withhold taxes on amounts paid to drivers and does not issue Forms
W-2, but instead reports amounts earned by drivers to both the IRS and to drivers on Forms
1099-MISC and 1099-K. Such “information reporting” helps the IRS identify and
corroborate income earned and reported by taxpayers on their tax returns. Studies suggest

31

Lyft, https://www.lyft.com/.
Lyft, https://www.lyft.com/help/article/1353884.
33
Lyft, https://www.lyft.com/drive/help/article/1229170.
34
Lyft, https://www.lyft.com/help/article/1003538.
35
Dana Kerr, To tip or not to tip drivers, that is Uber’s question, CNET Mag. (Feb. 16, 2015),
http://www.cnet.com/news/to-tip-or-not-to-tip-drivers-that-is-ubers-question/.
36
Lyft, https://www.lyft.com/help/article/1003538.
37
See, e.g., http://www.sfgate.com/business/article/Ride-sharing-pioneer-Sidecar-to-shut-down-ride6726144.php; Douglas Macmillan, Sidecar Succumbs to Uber and Lyft in Car-Hailing Wars, WALL ST. J.
(Dec. 29, 2015 at 5:35pm) http://blogs.wsj.com/digits/2015/12/29/sidecar-shuts-down-succumbing-to-uberand-lyft/.
38
Uber, https://get.uber.com/drive/; Uber, https://www.uber.com/legal/usa/terms.
32

10

 that in sectors where information reporting and withholding are difficult to impose (e.g.,
cash businesses), tax compliance declines. 39
Uber and Lyft currently report driver referral bonuses and other special direct
payments exceeding $600 on Form 1099-MISC. 40 They report gross driving payments
earned by drivers (which are the bulk of driver payments) on Form 1099-K. However, Uber
and Lyft currently take different Form 1099-K reporting positions due to a perceived
ambiguity in the law: The relevant statute requires that banks and other “merchant
acquiring entities” report all payments made to payees, no matter how small, while “third
party settlement organizations” must only report payments if they exceed $20,000 and if
there are more than 200 transactions with the participating payee. 41 Against this backdrop,
Lyft has taken the position that it is a “third party settlement organization” only required
to report payments above the $200,000/200 transaction threshold. Uber took this position
until early 2015, but then began issuing Form 1099-K to drivers for all driving payments,
no matter how small. The impact of Uber’s changed position and the resulting divergence
between Uber and Lyft in their Form 1099-K information reporting can be observed in
discussions on the internet boards. 42
The position taken by Uber and Lyft that drivers are independent contractors has
not gone uncontested. Developments in class action court cases against these platforms,
and rulings by state labor and employment tribunals that drivers are properly classified as
employees, have brought a new degree of uncertainty to this determination. 43 The IRS test
for independent contractor status in the tax context is drawn from the general common law

39
See, e.g., Leandra Lederman, Reducing Information Gaps to Reduce the Tax Gap: When is Information
Reporting Warranted?, 78 FORDHAM L. REV. 1733 (2010); Joel Slemrod et al., Does Credit-card Information
Reporting Improve Small-business Tax Compliance? (Jun. 16, 2015) (unpublished manuscript), available at
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2515630; see also generally Leandra Lederman,
Statutory Speed Bumps: The Roles Third Parties Play in Tax Compliance, 60 STAN. L. REV. 695 (2007);
James Alm, John Deskins, Michael McKee, Do Individuals Comply on Income Not Reported by their
Employer? 39(2) PUB. FIN. REV. 120 (2009).
40
I.R.C. § 6041.
41
I.R.C. § 6050W(e).
42
See discussion infra Part IV.A.4.
43
See sources cited supra note 8. A settlement was filed in Lyft v. Cotter on January 26, 2016 and is pending
approval by the court. See Lyft. v. Cotter, Class Action Settlement Agreement and Release (Jan. 26, 2016),
Case 3:13-cv-04065-VC, Doc. 169-1.

11

 test, 44 and classification of drivers for tax purposes will likely be affected by the outcomes
of these court cases and other rulings beyond the tax arena.
B.

Research Questions

In this Article, we examine three main questions:
1. Major Tax Concerns of Forum Participants.
First, we investigate the major substantive tax questions discussed by forum
participants. We identify the tax issues that are most relevant to forum participants and
examine the ways in which they manage gaps, ambiguities, and compliance challenges that
may arise. We also study the extent to which forum participants consult tax advisors, use
tax preparation software, or employ other methods and resources in meeting their tax
obligations.
2. Effect of Taxes in Decision-Making.
Second, we investigate how forum participants make decisions regarding whether
to drive at all and whether to drive part or full time, and we look at how taxes factor into
those decisions. This second research question arose somewhat organically, because the
data we collected contained many discussions of profitability and the role taxes play in its
calculation. In addition to examining how forum participants talk about profitability
overall, we specifically investigate when they begin to consider tax rates and administrative
burdens (i.e., at outset, when deciding whether to drive, or later), whether they change their
behaviors once tax and tax compliance burdens become salient, and whether their
estimations and understandings of tax and compliance burdens are accurate.

44

See, e.g., http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-ContractorSelf-Employed-or-Employee. See also IRC § 3121(d)(2) (defining employee for employment tax as “any
individual who, under the usual common law rules applicable in determining the employer-employee
relationship, has the status of an employee”). Although the tax law generally determines worker classification
based on the common law analysis, in some circumstances a common law independent contractor will
nonetheless be treated as a “statutory” employee for specific provisions of tax law. See, e.g., IRC §
3121(d)(3).

12

 3. Tax Sophistication, Tax Conduct, and Tax Compliance Culture.
Finally, we analyze the dominant cultural characteristics of the discussion forums,
examining features such as forum participants’ levels of sophistication in understanding
tax law, their attitudes towards tax compliance and risk taking, the accuracy of tax
information and advice exchanged in the forums, and the ways in which forum participants
express disagreement and correct each other’s errors. We also describe the activities of
non-driver forum posters on the discussion boards.
II.

THE STUDY OF INTERNET FORUMS: RESEARCH METHODOLOGY

In designing our study, we made a series of methodological choices. In this Part,
we discuss the key features of our research methodology: (1) the decision to study internet
forums, (2) selection of the forums and discussion threads for analysis, and (3) the
quantitative and qualitative analytical methods employed.
A.

The Study of Internet Discussion Forums: Possibilities and Limitations

The use of discussion boards, chat rooms, blogs, and other internet forums to create
community and exchange information is a well-established feature of contemporary life,
and academics have increasingly realized that these internet forums are rich data sources
that can be studied and analyzed. A growing body of literature in fields such as sociology
and public health examines how posters in internet communities interact with each other
and how information is conveyed through these online channels. 45 However, the study of
internet discussion forums has not, to our knowledge, been extended to exploring the
transmission of legal advice and information (including tax advice and information) online.

45

See, e.g., Aditya Pal et al., Early Detection of Potential Experts in Question Answering Communities,
LECTURE NOTES IN COMPUTER SCIENCE, 6787, 231-242; Rosenblat & Stark, supra note 14; Reijo Savolainen,
Requesting and Providing Information in Blogs and Internet Discussion Forums, 67 J. DOCUMENTATION 863
(2011); Winnie Shum & Cynthia Lee, (Im)politeness and Disagreement in Two Hong Kong Internet
Discussion Forums, 50 J. PRAGMATICS, 52-83 (2013); L. Jean Harrison-Walker, E-Complaining: A Content
Analysis of an Internet Complaint Forum, 15 J. MARKETING SERVICES (5) 397 (2001); Wolfgang Himmel et
al., Information Needs and Visitors’ Experience of an Internet Expert Forum on Infertility, 7(2) J. MED.
INTERNET RES. e20 (2005); Jyh-Shen Chiou & Jasi Lee, What Do They Say About “Friends”? A CrossCultural Study on Internet Discussion Forum, 24 COMPUTERS IN HUMAN BEHAVIOR 1179 (2008).

13

 More specifically, an in-depth content analysis of how online communities of 1099 workers
confront legal and regulatory systems has never been performed.
Analysis of internet discussion forums is an appropriate method for studying
ridesharing drivers and other sharing economy workers, particularly where other sources
of data may not be immediately available. First, ridesharing drivers and other sharing
economy workers make intensive use of internet and mobile technologies and are generally
comfortable with online interaction and communication. 46 Second, ridesharing drivers
operate in comparative physical isolation and may have little in-person contact with other
drivers. Thus, drivers have turned to the internet, converging in a number of online forums
to share ideas and information.
Third, the format and layout of internet discussion forums makes them an effective
way to share technical information such as tax advice, original sources (e.g., links to other
websites), spreadsheets, and legal material. Studying online forums therefore lets us
observe the types of detailed technical information that are actually shared, stored, and
possibly relied upon by forum participants and observers. Fourth, studying the online
forums allows a real-time examination, based on a written transcript consisting of questions
and comments, of what ridesharing drivers are contemplating and discussing. This has a
clear benefit over methods such as surveys and interviews, which rely on driver
recollections of past events. Fifth, the relative anonymity of online forums may encourage
honesty regarding tax conduct and compliance behaviors. Finally, thick description of
online interactions can add nuance and texture to our understanding of the research subject
that other methodologies—such as quantitative data analysis—may fail to capture.
Yet, study of online discussion forums, while it might yield interesting insights, is
subject to a number of limitations. Most obviously, only a subset of ridesharing drivers
post on the discussion boards. We have limited information about how forum participants
skew in terms of demographics, attitudes towards driving, or attitudes towards tax
compliance. Thus, it is important not to take the views expressed on the forums as
representative of the views of all drivers. Second, it is also difficult to know the impact of

46

A driver’s financial success may depend, in part, on her ability to manipulate and interpret online data (for
example, the ability to identify potential price surges and locations of other drivers).

14

 the discussion boards beyond the community of active forum participants. All of the boards
we studied can be accessed and read by the public without logging in, so there are likely a
significant number of “lurkers.” We did not obtain information about the number and
frequency of lurkers or about site traffic, so the impact of information and opinions shared
on the boards on such lurkers is unknown. Third, there may be a gap between what forum
participants say anonymously on the internet and what they actually do in terms of tax
compliance and other behaviors. We have no way to quantify that gap, if it exists. Thus,
one must be careful in drawing conclusions about the actual behaviors of rideshare drivers
based on what is said on the boards.
There are also necessary limitations in terms of study design and methodology. As
with any qualitative study, certain aspects of how we categorized the discussion threads
and coded the data might be subject to debate in close cases. In addition, our study is
bounded by the dates on which we conducted the search, by our search terms, and by the
search engines of the respective websites.
Notwithstanding these limitations, study of online discussion forums can yield
valuable information and data, particularly when supplemented by other research methods.
B.

Selection of Internet Forums for Study: Reddit, Uberpeople, and TurboTax
We analyzed three internet discussion forums: the Uberdrivers subreddit on

Reddit.com, the Uber drivers’ forum Uberpeople.net, and the Intuit TurboTax
AnswerXchange Forum. 47 The Uberdrivers subreddit is an important internet venue where
drivers interact, with over 5,000 subscribed readers, and Uberpeople is a leading online
forum for ridesharing drivers. While Reddit and Uberpeople are general interest sites,
discussions on TurboTax pertain only to tax. We found, somewhat surprisingly, that the
most substantive and sophisticated tax discussions were contained on Reddit and
Uberpeople, not on TurboTax.
All three websites are in discussion board format, which means that individuals can
post content in the forum by logging in under a username and writing an entry. Posted
content often takes the form of questions or commentary. Other users, who may be

47

We refer to these discussion forums as Uberpeople, Reddit, and TurboTax.

15

 members of the public, forum employees, or moderators, may respond to or comment on
posted content by logging in under a username, thereby generating a discussion. In this
Article, we refer to each discussion, which consists of the original post and subsequent
comments and responses, as a “discussion thread.” We refer to the initial poster for each
discussion thread as the “thread originator” or “original poster” and to subsequent posters
on a thread as “commenters.” In all three cases, the websites were viewable by the general
public without a username or a subscription; an account was required only to post content.
1. Reddit
Reddit, which describes itself as “the front page of the internet,” is a widely used
social networking and news website in which community members can post content by
registering under a username and password. 48 Reddit can be broadly characterized as a
“bulletin board” upon which users post text-based entries, links, videos, photos, and other
content. 49 Content on Reddit is organized by communities of affinity or interest, known as
“subreddits,” and subreddits range widely in tone, content, and topic. We observed a
number of subreddits relating to the sharing economy. The Uberdrivers subreddit was by
far the most significant and active subreddit for ridesharing drivers. 50
Reddit users may post content, comment on submitted content, and comment on
those comments, thus generating a conversation within each discussion thread. Reddit
operates a voting system, by which users (redditors) can vote up or down on (“upvote” or
“downvote”) submitted content and comments. 51 These upvotes and downvotes affect the
ranking of items in each subreddit. Content within a subreddit can be sorted based on the
“relevance,” “new,” “hot,” “top,” and “comments.”

48

See Reddit: A Beginner’s Guide, http://mashable.com/2012/06/06/reddit-for-beginners/. As of June 23,
2015, Reddit boasted 1,715,454,785 comments, 334,626,161 monthly page views, 190,227,552 posts, and
36,136,190 user accounts. See Reddit Blog, http://www.redditblog.com/2015/06/happy-10th-birthday-to-uscelebrating.html.
49
Id.
50
See Uberdrivers subreddit, https://www.reddit.com/r/uberdrivers/.
51
Maeve Duggan & Aaron Smith, 6% of Online Adults are Reddit Users (Pew Research Center July 3, 2013),
http://www.pewinternet.org/2013/07/03/6-of-online-adults-are-reddit-users/.

16

 A Pew research survey conducted in April and May 2013 52 found that 6% of
internet users surveyed use Reddit, and that men were twice as likely to be Reddit users
(8%) as women (4%). 53 Young people were more likely to use Reddit than older people:
11% of internet users ages 18-29 reported using Reddit while 7% of internet users ages 3049 reported Reddit use. Younger men were significantly more likely to be Reddit users
than older men. 54 Urban and suburban dwellers were more likely to use Reddit than those
living in rural areas. 55
By comparison, a 2015 study of Uber drivers commissioned by Uber concluded
that 19 percent of drivers are under age 30, and only 24.5 percent are age 50 or older. 56 In
contrast, taxi drivers and chauffeurs are substantially older. 57 Fourteen percent of Uber
drivers are women. 58 Although there is not a direct overlap between the demographic
profile of Reddit users and Uber drivers, both seem to be predominantly male and young. 59
Combined with the observation that Uber drivers are likely to be technologically savvy
enough to use internet forums, it is reasonable to conclude that Reddit might provide useful,
though by no means perfect, data on ridesharing drivers.
2. Uberpeople
UberPeople.net is an internet discussion forum that identifies itself as “an
independent community of rideshare drivers.” 60 It is perhaps the leading internet discussion

52

Id.
http://www.pewresearch.org/fact-tank/2013/09/12/its-a-womans-social-media-world/ (“reddit is the only
site we’ve measured in which men are significantly more likely than women to be users.”).
54
Duggan & Smith, supra note 51.
55
Id.
56
Hall & Krueger, supra note 1, at 7. The study was based on a web survey completed by 601 drivers (a
response rate of about 11%). The report states that Krueger has “full discretion over the content.” Id. at 1 n.2.
57
Id. at 7.
58
Id. at 8.
59
Note that the Reddit statistics are calculated as a percentage of internet users, that is, the survey asked
internet users questions about their demographic information and their Reddit use. A conclusion that 8% of
male and 4% of female internet users report using Reddit does not mean that two thirds of Reddit users are
men. In contrast, the Uber study was a study of Uber drivers themselves, and directly about their demographic
information.
60
Uberpeople.Net, http://uberpeople.net/. According to its Facebook page, Uberpeople was founded in April
2014.
53

17

 forum for ridesharing drivers and has been in operation since April 2014. 61 The volume of
discussion and the scope of ridesharing topics covered are extensive. 62 The site’s ownership
is unclear and has been the subject of some debate. 63 Like Reddit, Uberpeople consists of
discussion threads generated by a thread originator and commented upon by subsequent
posters. Because of the forum layout, however, the Uberpeople discussion threads seem to
have a slightly less conversational style than Reddit. It is generally accepted that some
forum participants are self-identified Uber employees, and it is assumed that others may
be unidentified Uber employees. 64
3. TurboTax
Intuit TurboTax AnswerXchange is an online question and answer forum created
by Intuit, a leading tax preparation software developer that offers the TurboTax software. 65
Users who have created an account can log into the forum and post questions about how to
prepare their taxes. 66 TurboTax employees, representatives, and other users provide
publicly available responses to these questions. In contrast to Uberpeople and Reddit, all
of the discussion threads on TurboTax concerned taxation, so we did not observe non-tax
conversations morphing into discussions of tax issues (and vice versa).
C.

Selection of Tax-Related Discussion Threads for Analysis

Because of differences among the three forums, we tailored the discussion thread
selection process for each forum to ensure that all relevant threads were identified. Both
Uberpeople and Reddit contain a large number of non-tax-related discussions, so our goal
was to isolate the tax-specific threads. The discussions on TurboTax all concerned taxation,
so the goal there was to identify the threads relevant to ridesharing.

61

As of October 2015, Uberpeople had over 26,000 members, over 33,000 discussions and over 486,000
posted messages.
62
See Nellie Bowles, The Uber-Loneliness of the Sharing Economy Driver (The Guardian, Feb. 4, 2016),
http://www.theguardian.com/technology/2016/feb/04/uber-protest-app-zello-sharing-economy (calling the
site “a sort of public water cooler” and noting that Uberpeople users have made over 750,000 posts to date).
63
See “Who owns Uberpeople-Net?,” http://uberpeople.net/threads/who-owns-uberpeople-net.18569/;
Uberpeople P438.
64
See
http://uberpeople.net/threads/this-needs-to-be-said-this-forum-is-run-by-and-worked-by-uberemployees.3643/ (thread titled “This needs to be said! This forum is run by and worked by Uber employees”).
65
https://ttlc.intuit.com/.
66
Id.

18

 1. Reddit
We searched for and downloaded tax-related threads in the Uberdrivers subreddit
using the following words and phrases: taxes, tax, 1099-K, 1099K, 1099-misc, 1099misc,
1099, deduct AND expense, deduct* AND expense*, deduction*, taxation, deduct* AND
mile*, deduct* AND cost*, mileage, IRS, “independent contractor,” and “independent
contractors.” 67 Our search methodology yielded 260 discussion threads.
2. Uberpeople
We searched for tax-related threads on Uberpeople by combining a search term
method and an individualized review of threads. The most pertinent section of the website
was the “Forums” section, which contains the bulk of the discussion threads. 68 “Forums”
was itself divided into five categories: Community, Garage, Information, Options, and
Geographical. These headings were further subdivided into subheadings.
We applied the following search procedure:
(1) The “Garage” category in the “Forums” section contained a subcategory “Pay”
which itself contained two subcategories: “Taxes” and “Tips.” 69 We included all
the discussion threads under “Taxes” in our study.
(2) We performed a global search for the word “taxes” across the entire “Forums”
section and included all hits in our study. 70
(3) We reviewed individually each remaining thread title in the “Forums” section
and included all threads relevant to taxation in our study. 71
Our search methodology yielded 261 discussion threads.

67

Reddit allows wildcard searching using an asterisk after a word. But sometimes wildcard searching was
ineffective. For example, a search for tax* yielded threads about “taxis,” and a search for deduct* yielded
threads about insurance “deductibles.” In those instances, we did not use wildcards due to over-inclusiveness.
68
Other sections included Resources, Members, Blogs, and Cities.
69
Some threads under “Pay” were in neither the “Tips” nor the “Taxes” sub-subheading.
70
All threads that contained the word “taxes” somewhere in the discussion were captured. Once the thread
was captured, all pages of that thread were saved for study. The word “tax” is not searchable on Uberpeople
because it is too short.
71
We did not review threads in the “Geographical” category because that category was city specific and did
not pertain to taxes at all.

19

 3. Turbotax Intuit
We performed searches in the Intuit TurboTax Live Community Forum, using the
terms “Uber” and “Lyft.” The search for “Uber” generated 85 threads, and the search for
“Lyft” generated 22 threads, for a total of 107 threads.
D.

Coding of Discussion Threads

We then subjected the selected discussion threads from the Reddit, Uberpeople, and
TurboTax forums (n=260, n=261, and n=107, respectively) to quantitative analysis using
descriptive statistics as well as qualitative content analysis. We sorted the threads in each
forum into broad topical categories to get a general sense of the dominant topics of interest
in the forums. We then analyzed the discussion threads under a system of 71 substantive
codes and a number of other structural and in vivo codes using the data analysis software
Atlas.TI. 72 The full list of codes is in the Appendix. Coding the data helped us identify the
most frequently discussed tax issues on the boards.
Substantive Codes. Our 71 substantive codes can be grouped into five broad
families (total number of codes in each family in parentheses): Substantive Tax issues (30),
Tax Policy Issues (6), Attitudes towards Tax Compliance (7), Tax-Related Strategies and
Rationales (14), and Feelings and Emotions about Taxes (14).
Structural Codes. To obtain a more nuanced understanding of forum dynamics and
composition, we employed a number of codes (between 7 and 11 depending on which
forum) designed to illuminate the structure and layout of the forum. Thus, for example, we
coded for thread-originating posts, posts by tax professionals and other marketing posts,
possible “plants” by Uber and Lyft or by taxicab competitors, and possible web bots. The
structural codes enabled us to tease out various features of the forums, such as number of
questions asked, most commonly asked questions, and most frequent posters.

72

http://atlasti.com/. In this Article, citations to our dataset are to the discussion threads that we analyzed
(referred to as “Primary Documents” or “PDOCs”). Some discussion threads spanned more than one PDOC.
Thus, there were a total of 487 Uberpeople PDOCs, 291 Reddit PDOCs, 85 PDOCs for TurboTax threads
with keyword Uber, and 31 PDOCs for TurboTax threads with keyword Lyft. For example, “Reddit P1”
denotes the first PDOC in Reddit dataset. Usernames and which forum a post came from have been
anonymized, where appropriate, to protect poster identities. The suffix “_TO” denotes a forum user’s threadoriginating post.

20

 Thread Originators and Respondents. We coded the names of all forum
participants. This allowed us to understand the number, frequency, and composition of
forum users.
Other In Vivo Codes. Finally, where there were distinctive comments or
interactions, we employed in vivo coding to capture precise language.
III.

THE TAX LIVES OF UBER DRIVERS: STATISTICAL ANALYSIS OF DATA

We first summarize our findings using descriptive statistics before discussing our
content analysis in Part IV.
A.

Reddit

The 260 discussion threads yielded by our search methodology were submitted
between 27 November 2013 and 1 May 2015, with 109 of the 260 threads posted in 2015. 73
Each thread (and each comment within a thread) is given a points score on Reddit, which
is the number of “upvotes” minus the number of “downvotes” received. 74 Each discussion
thread also contains information about the thread’s “percentage upvoted,” which is the
percentage of votes received that are upvotes.
We first classified each thread into one of seven basic categories based on its
primary focus. We then gathered data on (1) the date the thread was posted, (2) the number
of comments on each thread, (3) the thread’s point score, (4) the percentage of upvotes
received, and (4) the general composition of the forum users.
General Thread Topics. Based on our classification scheme, we found the
following numerical distribution of topics: 75

73

Each thread contains the date the comment was posted and the date of the original post.
https://reddit.zendesk.com/hc/en-us/articles/204511559-How-is-a-post-s-or-comment-s-scoredetermined-.
75
“Substantive Tax Issues” refers to threads addressing issues of substantive tax law. “Profitability” refers
to threads dealing with whether driving for Uber was profitable. “Driving Strategy” refers to threads
addressing methods, strategies, and decisions for most effective rideshare driving. “Independent Contractor
vs. Employee” refers to threads that deal with issues surrounding worker classification, such as labor law
issues or whether drivers should unionize. (Tax issues relating to independent contractor status (such as Form
1099 issues) were grouped in the “Substantive Tax Issues” category.) “Uber’s Business Model” refers to
threads pertaining to how Uber conducts its business. “Interactions with Uber” refers to discussions of
interactions between drivers and the platform. “Marketing” refers to posts by posters trying to market their
software or services. Where thread topics spanned more than one category, we assigned that thread to the
category that most accurately reflected its dominant theme.
74

21

 Thread Topic

Number of Threads

Substantive Tax Issues

103

Profitability

70

Uber’s Business Model

25

Driving Strategy

21

Interactions with Uber

15

Independent Contractor vs. Employee Issues

14

Marketing

12

Total

260

This suggests that the dominant topic in the discussion forum threads pertained to taxspecific issues. This is unsurprising given our search terms. It also shows that a significant
number of threads dealt with questions of whether rideshare driving was profitable and the
role taxes played in such profitability determinations.
Number of Comments. The discussion threads contained an average of 13.45
comments per thread, with a median of 9.5 comments. There were a relatively small
number of discussion threads that drew a large number of comments. Focusing on the 50
discussion threads that drew more than 20 comments per thread, the main topics of those
threads were as follows:

Topic

Number of Threads

Profitability

27

Substantive Tax Issues

6

Uber’s Business Model

5

Driving Strategy

5

Independent Contractor vs. Employee Issues

3

Interactions with Uber

2

Marketing

2

TOTAL

50

22

 This broadly suggests that even though there were more substantive tax threads than
threads concerning profitability, the thread topics that drew the most commentary from
redditors predominantly concerned whether rideshare driving is profitable, while
substantive tax questions drew less interest.
Points Score and Percentage Upvotes. The points scores of the discussion threads
ranged from 118 to 0, with an average of 4.73 points and a median of 2 points. The
percentage of upvotes received by each thread ranged from 100% to 18%, with an average
of 73.75% upvoted and a median of 75%. We analyzed point scores and percentage of
upvotes to figure out roughly which threads drew strong reactions and might have had a
wider readership or impact.
Compositions of Forum Posters. Reddit forum posters were a combination of
frequent, repeat posters and episodic or casual posters. The most frequent thread originator
originated 11 threads. The handle USER172, which belongs to a marketer marketing the
zen99.com website, was second with six threads originated. There was significant but
imperfect overlap between frequency of thread origination and frequency with which each
user commented or responded on the boards. For example, the most frequent thread
originator in our dataset was the second most frequent thread commenter (81 occurrences).
On the other hand, the most frequent thread commenter (86 occurrences) only originated
one thread in our dataset. The handle USER172, who was the second most frequent thread
originator, was the fifth most frequent respondent (63 occurrences). Thus, repeat
commenters had a strong presence on the discussion board. In addition, USER172’s
presence and frequent posts and comments supports our impression that the Reddit
discussion board is a shared space between actual drivers and other parties, such as
marketers, journalists, and suspected “plants” by ridesharing platforms and taxicab
competitors.
Episodic or casual commenters were also present in large numbers. We recorded a
total of 734 thread respondents (i.e., handles who actually responded to threads, rather than
originating threads) in the forum. Out of these 734 respondents, 596 had posted comments
on threads 5 times or fewer, 665 had posted comments on threads 10 times or fewer, and
710 had posted comments on threads 20 times or fewer. Thus, over 80% of respondents
had posted comments 5 times or fewer. Only six respondents posted comments on threads
23

 more than 50 times, and only 24 respondents posed comments on threads more than 20
times. This suggests that the vast majority of commenters were casual, infrequent
commenters, with a relatively small number of regulars.
B.

Uberpeople

The 261 discussion threads generated by our search methodology were initially
submitted in a 12 month period, between 10 April 2014 76 and 24 April 2015. Of the 261
threads, 179 were posted in 2015 and 82 were posted in 2014. The Uberpeople forum
includes a function that allows commenters to “like” a given post or comment, but this
feature played a minor role compared to the Reddit upvote, downvote, and points system.
As with Reddit, we gathered data on (1) the date of the original post, (2) the number
of comments on each thread, and (3) the general composition of forum users. We then
classified each thread into the same seven basic categories used with respect to Reddit, but
added an eighth “Miscellaneous” category because our search in Uberpeople.net yielded a
few threads unrelated to any relevant category.
General Thread Topics. Based on these eight categories, the 261 threads yielded by
our search methodology were distributed as follows:

76

Thread Topic

Number of Threads

Substantive Tax Issues

121

Profitability

57

Uber’s Business Model

25

Interactions with Uber

19

Driving Strategy

14

Marketing

10

Miscellaneous

8

Independent Contractor vs. Employee Issues

7

Total

261

This reflects the fact that Uberpeople.net appears to have been started in April 2014.

24

 Thus, as with Reddit, the dominant topic of discussion in the threads captured by our search
criteria related to tax-specific issues, followed by discussions about profitability
determinations. Discussions of Uber’s business model and driver interactions with the
company were a small but notable component, but discussions of driving strategy featured
slightly less prominently than on Reddit. There were slightly fewer marketing posts than
on Reddit.
Number of Comments. The Uberpeople discussion threads contained an average of
23.64 comments and a median of 11 comments. Thus, the mean number of comments was
significantly higher for Uberpeople than for Reddit, while the median was less dramatically
different.
Looking at the 77 discussion threads that drew more than 20 comments per thread,
the main topics of those threads (based on our eight category classification scheme) were
as follows:

Topic

Number of Threads

Profitability

24

Substantive Tax Issues

18

Uber’s Business Model

9

Driving Strategy

7

Interactions with Uber

7

Independent Contractor vs. Employee Issues

5

Miscellaneous

5

Marketing

2

TOTAL

77

Thus, as was the case for Reddit, even though tax-specific threads were the largest category
in the data (121 threads), they composed fewer of the frequently commented upon threads
than profitability discussions.
Composition of Forum Users. Uberpeople forum users, like Reddit users, were a
combination of repeat posters and casual or episodic ones. Of 261 discussion threads
analyzed, the most frequent thread originator originated seven threads, and the second most
25

 frequent originated five. There was imperfect overlap between frequency of thread
origination and frequency of comments: Out of the top 5 thread commenters in our dataset
(number of comments: 196, 154, 154, 98, 97), one of those commenters was the most
frequent thread originator (154 comments; originating 7 threads), but of the remaining four
top commenters, three only originated one thread while the fourth did not originate any.
The handle USER149 (owner of the zen99 website) originated three threads and made 67
comments.
While there were a fair number of repeat commenters (71 users made more than 20
comments in our dataset), the majority of forum participants were casual users. Out of 816
commenters, 581 commented 5 times of fewer, 673 commented 10 times or fewer, and 745
commented 20 times or fewer. Like Reddit, Uberpeople users appeared to consist of
ridesharing drivers, marketers, journalists, tax professionals, taxi drivers, and others.
C.

TurboTax Intuit

The search methodology outlined above yielded a total of 107 discussion threads.
Each discussion thread consisted of a question asked by a thread originator, answers to the
question, and comments. Some threads contained no answers and/or no comments. Unlike
the Uberdrivers subreddit, there were almost no repeat posters. Out of a total of 99 thread
originators, only eight of those thread originators posted more than one question, and all
of those eight posted twice each. Ultimately, this forum proved less relevant to our analysis
than Reddit and Uberpeople because of the limited number of answers and comments and
because the dominant issues were return preparation logistics 77 and software-specific
questions.
IV.

THE TAX LIVES OF UBER DRIVERS: CONTENT ANALYSIS OF DATA

Content analysis of the data reveals more detailed information about how forum
posters navigate the tax system, make determinations about profitability and driving, and
interact with each other on the discussion boards. 78

77

This refers to questions about how to prepare the tax return (e.g., where to enter income or deduct fees).
Our discussion reflects our broad sense of thread impact, based on the metrics (such as number of
comments and points scores) discussed in Part III.
78

26

 A.

Tax Issues Confronting Ridesharing Drivers

Forum participants discussed a number of substantive tax issues, with varying
degrees of depth and accuracy. The frequency with which codes occurred provides a rough
sense of the issues that were most discussed. In Reddit, some of the most commonly
occurring substantive tax codes concerned business expense deductions: “Expenses and
Deductibility” (437 occurrences), “Mileage” (388), “Documentation” (264), and “Method:
Standard Mileage vs. Other” (248). Issues surrounding drivers’ status as 1099 workers also
emerged as an important topic: “Employee or Independent Contractor” (182), “Form 1099:
Content and Accuracy” (69), “Form 1099: Different Reporting Positions” (18), “Form
1099: Receipt” (80), “Form 1099: Residual” (52), “Employment Taxes” (41), “Estimated
Taxes” (43), “Withholding” (57), and “Schedules” (39). 79
The frequency of codes was similar in Uberpeople. Codes related to business
expenses

included:

“Mileage”

(678),

“Expenses

and

Deductibility”

(649),

“Documentation” (280), and “Method: Standard Mileage vs. Other” (271). Codes related
to driver classification included: “Employee or Independent Contractor” (295), “Form
1099: Content and Accuracy” (142), and “Form 1099: Receipt” (126).
At a broad level, the incidence of codes suggests that when forum posters talk about
tax they are generally focused on questions and problems pertaining to business deductions
and to the implications of their status as small business operators or Form 1099 recipients.
To be sure, there were some discussions regarding the need to include income and some
instances of failure or unwillingness to report income. 80 For example, there were a few
cases where posters filed their tax returns for the 2014 tax year in January 2015, “forgot”
to include ridesharing income, subsequently received Forms 1099-K from Uber, and asked

79

Additional substantive topics that appeared in Reddit but with less frequency included “Entities and
Structuring” (28), “Interest and Penalties” (13), and “State Tax” (39).
80
USER6_TO (“so I don’t have to pay taxes if I gross less than $20k?”); USER98_TO (“I only made [XXX]
for the year. . . . Do I really need to waste time and file taxes over this bullshit? I heard something like if you
make less than $10,000 you don't have to file taxes but I made way more than that at my "real" job.”);
USER64 (“If they are not reporting it to the IRS then I’m not going to report it”); USER61_TO (“do you
have to report your earnings from Uber to the IRS, and is there any way around this?”); USER93 (“Do you
think since Lyft didn't give me form 1099 I should not bother declaring the income from their gig on my
2014 tax returns?”); see also infra note 125.

27

 how to amend their returns. 81 However, these income inclusions questions were relatively
few compared to questions about expense taking. 82 Most forum participants seemed to
understand the basic requirement that they pay taxes on rideshare income. 83 The
observation that most forum participants view rideshare income as reportable seems
broadly consistent with findings from existing tax compliance literature that third-party
information reporting (such as reporting on Form 1099-K) can improve taxpayer reporting
of income. 84 Drivers’ receipt of Forms 1099-K from Uber, combined with their knowledge
that the entire business is conducted via credit card, might explain the widespread
acceptance of the obligation to include driving income on the tax return. 85
On the other hand, examination of the discussion threads reveals that forum posters
struggled with how to handle their business expenses. Many posters were new to filing
taxes as independent contractors. Accordingly, issues surrounding Schedule C filing and
expense taking and documentation were often matters of first impression. Specifically,
drivers focused on the following core concerns: (a) determination of business miles and
deductibility of expenses, (b) the implications of the choice between the standard mileage
rate and the actual expenses method, (c) documentation, (d) understanding their Forms
1099-K, and (e) tax preparation issues and logistics.
1. Determining Business Mileage and Deductibility of Expenses
Most forum posters in the Uberpeople and Reddit forums seemed to understand that
certain types of expenses could potentially be deducted, readily identifying gas, bottled

81

USER174; USER175.
We coded 211 instances of the code “income inclusion” in Uberpeople and 99 instances in Reddit.
Interestingly, the code “Income Inclusion” appeared comparatively frequently in TurboTax (102 occurrences,
compared with 126 occurrences for “Expenses and Deductibility”), perhaps reflecting the fact that posters
were actually filling out tax forms when they posted in this forum.
83
See, e.g., USER58 (“Are you implying that Lyft drivers who don't get a 1099­K don't owe taxes on their
earnings? Because that's not how it works.”).
84
See discussion supra Part I.A.2; see also Oei & Ring, supra note 4; Leandra Lederman, supra note 39, at
1752 (noting that Form 1099-K reporting effectiveness may be harmed by high reporting thresholds, which
exclude many taxpayers from reporting); see also I.R.C. § 6050W(e).
85
Susan Cleary Morse, Stuart Karlinsky, Joseph Bankman, Cash Businesses and Tax Evasion, 20 STAN. L.
& POL’Y Rev.37 (2009) (finding, based on field interviews of 275 cash business owners, that most
interviewees regarded credit card receipts as taxable and reportable revenue). While it addresses a different
group of taxpayers, the study raises the possibility that the electronic nature of amounts earned in ridesharing
may incentivize drivers to report such income, regardless of Form 1099-K reporting.
82

28

 water for customers, and tolls as deductible. 86 However, posters displayed uncertainty
regarding: (a) line drawing between business and personal outlays, and (b) the timing of
deductions and whether expenditures had to be capitalized instead.
a. The Business-Personal Borderline: Mileage and Other Expenses
i.

Mileage
With respect to the business-personal borderline, a frequent issue was whether

miles spent driving without a passenger in the car counted as miles driven for ridesharing.
Some background information is in order: First, the tax law gives drivers a choice between
taking the standard mileage deduction (i.e., an IRS-specified deduction equal to $0.56 per
mile driven on business for 2014) or deducting actual expenses incurred in business
driving. 87 However, if there is any personal use of the vehicle, then the question of which
miles “count” is material no matter which method the taxpayer chooses, and she would
have to track and document miles driven for ridesharing as opposed to personal use. 88
Second, the rules for determining deductibility of business mileage are complicated.
Generally, only costs associated with miles driven for business are deductible. Miles driven
from “home” to work and vice versa, referred to as “commuting” miles, are generally not
treated as business miles. 89 However, once “at work” costs attributable to miles driven for
work, for example traveling between business locations, would be deductible. 90 As the

86

USER51; USER108. Other expenses identified by forum participants included business cards, cell phone
mounts for the car, and water and mints for passengers. See, e.g., USER131. Drivers discussed the best cars
for ridesharing, often with a focus on the vehicle’s expected miles per gallon. Hybrids were frequently cited
as a promising choice, at least on cost grounds, if not aesthetic appeal.
87
IRC § 274(d); Treas. Reg. § 1.274-5(j)(2). Notice 2014-79 (Sec.3), 2014-53 I.R.B. 1001; IRS News Release
2014-114. Rev. Proc. 2010-51, 201-51 I.R.B. 883; IRS Publication 463 “Travel, Entertainment, Gift, and Car
Expenses” (2013) at 17.
88
For example, if the driver uses the actual expenses method and the vehicle were used only 40 percent of
the time (based on mileage) for ridesharing (with the remainder constituting personal use), only 40 percent
of the vehicle expenses would be deductible.
89
Rev. Rul. 99-7, 1999-1 C.B. 361. There are three exceptions: (1) If the taxpayer has at least one regular
work location away from her home, then commuting expenses between her home and a temporary work
location in the same trade or business can be deducted. (2) Transportation expenses for going from home to
a temporary work location outside the metropolitan area where the taxpayer lives and works are deductible.
(3) If the taxpayer’s residence is her principal place of business, then she may deduct transportation expenses
for going between home and another work location in the same trade or business. Id.
90
Id.

29

 discussion below illustrates, a number of interpretative issues arise in applying these rules
to ridesharing.
Uninformed forum posters expressed surprise that they needed to keep track of
mileage information at all and frustration at having to do so. 91 Interestingly, however, not
many drivers appeared completely uninformed. A few drivers, who seemed to sense that
miles were important but had not given the matter much thought, anticipated relying on
Uber-provided statements regarding miles driven. 92 However, Uber’s statements only
include miles driven with a passenger. 93
More sophisticated drivers realized that the Uber statement numbers were likely
under-inclusive of legitimate business miles. 94 In that case, drivers would need to make
their own determinations of business miles. Many posters assumed that all miles driving
around with the Uber app on would “count.” 95 Some forum posters contended that if the
driver turned on the Uber app upon leaving home, then the driver had effectively started

91

USER93 (“Unfortunately, I didn't keep log. I didn't know the rules when I started and Uber doesn't tell you
shit.”); USER97 (“I started fares already without documenting this past week,”). See also the following
exchange:
USER10: “Just spoke with a CPA, he said you can count the distance between your drop off point
to your next ride. You'll need to use the uber trip history, trip by trip and find the mileage in google
maps.”
USER22: “Oh god what a pain in the ass that would be.”
USER10: “It's going to take me weeks”
92
USER40; USER39.
93
Uber’s 2014 Tax Summary itself states that “Additional mileage may be deductible.”
http://ridesharedashboard.com/2015/01/30/uber-taxes-2015-tax-summary-deducting-fees/
94
See, e.g., USER50 (“Uber will only record on your 1099 the number of miles you drove after the pax gets
in the car it you can absolutely deduct all business related miles- like driving around to a spot and driving to
the pickup point.”); USER128 (“I just thought I could use the miles logged in the waybill, summary, etc
statements, but I realize these don't track your miles spent on picking people up before the ride starts.”).
95
USER117_TO (“[i]f you’re not keeping track of every mile you drive, you are screwed because this is
where your tax savings will come from”); USER157 (“[i]t’s extremely important to track ALL of your
mileage, as it is all deductible.”); USER167 (“Once you get behind the wheel go on line in your driveway
you are on the job.”); USER88 (“Turn the app on when you leave your house and…now they are
deductible.”); USER59 (“Your place of business is your house, there are no commuting miles.”); USER81
(“I turn the app on before I start the engine. All miles are "work"”); USER143 (“You're not listening. YES
YOU SHOULD DEDUCT ALL THOSE MILES. Your home is your base when you're an independent
contractor. When you leave it, you are travelling for work and should deduct it.”); USER103 (“When you
leave your house..... The app is on. Period.... When the app is on.... you're officially working. PERIOD. The
only "commuting miles" that you should have as an uber/lyft driver.... are on the soles of your shoes when
you walk from your back door to your car.”).

30

 working and could count the mileage as business related. 96 Even more aggressively, at least
one commenter suggested that a driver is “working” whenever the app is on, regardless of
whether the driver was really planning to work. 97 These opinions might not be correct,
however, because the IRS might take the position that miles driven from home to the usual
place of passenger pickup constitute nondeductible commuting miles.
The most sophisticated discussions of mileage did not presume that simply turning
on the Uber app was sufficient to render the miles driven deductible. Instead, these
discussions focused on whether there was a notable personal component to the miles
driven. For example, some posters wondered whether miles driven from home to either the
first passenger pickup or the general pickup zone 98 were really business miles, or whether
those constituted nondeductible commuting miles. 99 But even in these discussions there
was confusion among some drivers as to the potential distinction between commuting miles
(e.g., driving from home to “work”) and “dead miles” (i.e., driving around between
passengers without a passenger in the car). 100 The latter are likely equivalent to miles driven

96

See supra note 95; see also USER22 (“There is no commute. I am working if the car is moving. There is
no set location to commute to. Uber rides begin and end everywhere.”)
97
USER32 (This poster notes that they have “made it a point to turn on [the] uber [app] every time [he] get[s]
in the car,” which makes all miles deductible. They also note that “[y]ou can always accept rides then cancel
if you really have somewhere to be urgently] and that “[t]ime on the clock is time on the clock.”).
98
This distinction was most relevant for drivers who, for example, lived outside an active urban area and
drove from home to that area to find passengers. For example, consider the following exchange:
USER125: “I'm wondering if you live outside of the Uber coverage area, can you deduct the miles
driven from your home to the coverage area? Or, should you consider that "commuter" miles. Any
thoughts?”
USER167: “There are people that work in one place regularly and then sometimes have to go to a
farther office. They minus out their normal commute from the total trip to the outlying office. With
livery you do not have to do that. Once you get behind the wheel go on line in your driveway you
are on the job. With the increased insurance coverage you get while you are on duty I would drive
to the hot zone being on duty from your home.”
99
USER100 (“I’ve heard from my Dad’s tax guy, and also read that: The commute is the first leg, and the
last leg of your work period. When you first leave to get to where you hang out, and when you are on your
way back home are considered your commute. Between fares is still working.”); USER93 (“H&R Block tax
pros specifically answered this question contrary to what you are saying. NO, you cannot deduct commute
miles. This is verbatim what they said: "You, an IC, or self­employed driver are no different from a W­2
employee commuting from San Jose daily to San Francisco to work in his office. He (the W­2 employee)
cannot use his travel, or commute expenses from home to work, neither can you.”); USER158 (“Well... be
careful on that one. Commuting miles are never deductible. If its from first job to second job, then yes. There
is a fancy chart in the IRS about it.”).
100
The following exchange reflects this confusion:
USER148: “Dead miles don’t count. That’s fraud. Find me where you can legally claim
dead miles.”

31

 between clients, which are deductible under current law, but this was not obvious to all
forum participants.
In some cases, the forum debates took on a style familiar to legal reasoning–
analogizing the current case to established, more familiar ones. 101 One commenter offered
a broader vision of the underlying tax principle at stake:
The question the IRS will want you to answer is whether those miles were
driven primarily for business purposes. Practically speaking you can do whatever
you want and just count on not being audited. But if you are audited and you've
been fudging your mileage the IRS will not be amused. If you want to do your
taxes honestly, consider the following examples: 1. Driving to do an errand with
the Uber app on. Your primary purpose is running on [sic] errand. This mileage
should not be deducted. 2. Driving to a busy part of town with the intent to pick up
Uber passengers (even if you get no fares). Deduct this. 102

Interestingly, the debate over which miles count never seemed fully resolved (regardless
of the legal accuracy of any such resolution) on the discussion boards. 103 Moreover, it also
did not appear resolved among advisors and self-identified experts: Among posters who
had sought professional tax advice, there seemed to be variation in the tax advice given (or
at least variation in how the drivers understood that advice). 104 We note also that the handle

USER121: “If you drive around looking for fares that’s a valid business purpose. Show me
where it’s not.
USER148: “Show me where it is. You are not actively engaging in commerce unloaded.”
USER95: “No. Dead Miles is called cost of doing business and/ or commuting to work.
See also USER9 (“You also you can only deduct mileage en route to a pick up, on a run, or returning to the
start of a run. You cannot deduct mileage driving around while on line.”).
101
For example, some participants engaged in such reasoning by analogy:
USER131: “If you drive your car to meet with a client for sales or go to a business meeting your
miles are deductible. So what’s the difference in driving to pick up a rider?”
USER148: “In the case you described the business owner has a home office that is ‘brick & mortar.’
You don’t. It’s the same as if you had a paper route. You can count your miles on your route and
that’s it. If you have questions like this, you should consult the IRS publications. The only way you
can claim dead miles is if you have a commercial reason to count them. The reason you can’t count
the miles is because you don’t start the meter until they get in the vehicle….”
USER131: “I don’t see the difference between driving around hunting down fares and a salesman
driving around looking for sales. If I am on the close, burning gas in the process of my job, it’s a
business expenses plain and simple….”
102
USER75.
103
See, e.g., USER19 and USER75; USER95 (“Dead miles is called cost of doing business and /or
commuting to work”); USER131.
104
See for example the following exchange:

32

 USER172, a former CPA who was offering tax advice to drivers on the forums and through
his website and startup, at one point took the position that commuting miles could be
deducted,

105

though he appeared to back off from this position slightly in posts on

Uberpeople. 106
Finally, forum discussions revealed that some drivers adopted a strategy of driving
home to wait between passenger rides. 107 Regardless of whether miles driven between
home and the city center to begin or end the driving workday, or miles driven from home
to the first passenger pickup, are deductible, the analysis might be more complicated for
drivers who repeatedly head home within the period of their self-designated driving shift.
ii.

Other Expenses
Another less significant topic of discussion was the deductibility of clothing and

related costs. Several posters mentioned deducting clothing and dry-cleaning costs,
particular for UberBlack, a limousine-like service. 108 However, other posters would usually

USER10: “I just spoke to a Accountant, you need to be able to prove you started at your house. He
said I can count point A to B to A and so on, Everything but you mileage before you first and after
your last ride.”
USER152: “Yeah that is what I thought. Ill have a hard time documenting that, so Ill ask my guy to
see what the thinks. In years past we have just come to an agreement with the auditor on things like
this, so Ill keep logging all my miles.”
Following this exchange, another driver chimes in.
USER9: “Not according to my tax man. Any time you are not attached to a run (the point you accept
the ping), or returning to the starting point of a run, it is considered commuting time and is not
deductible.”
See also generally discussion between USER93 and USER8 regarding conflicting advice given by their
respective accountants.
105
See, e.g., USER172 (“Former CPA here – fyi, you can write off any business mileage, which includes
driving from home to your area of work, as well as driving around looking for passengers. Uber will only tell
you mileage while you have passengers, which is often a lot less than the mileage you can write off.”).
106
See discussion infra note 242 and accompanying text.
107
See, e.g., USER163_TO (“My strategy…was to stay online at my house until pings came in. I live very
close to two popular bars in town, as well as relatively affluent residential area. After completing trips, I
would look to return home and if I got a ping on the way from either of the bars or houses around I would
take it. . . . I drove Friday and Saturday night, and was online on the driver app for about a total of 8.5 hours.
My total time where I was earning money during trips was about 3:25 minutes. I would say the rest of the
time was spent between driving get pickups or watching TV at my house waiting.”).
108
See, e.g., USER83; USER147; USER3; USER147 (stating that they deducted “driver ‘uniform’”;
USER134: stating that they would deduct haircuts and clothes “to ‘keep me professional’”); USER40 (writing
off clothes and internet).

33

 reply to inform them that clothing was not deductible. 109 The same dynamic occurred with
respect to meals. For example, one driver inquired whether meals would be deductible if
the taxpayer opted to use the standard mileage method (essentially a question of whether
meal expenses were subsumed under the standard mileage safe harbor deduction or could
be additionally deducted). 110 The first reply stated:
“Meals do not seem like they would qualify: According to the IRS, “travel
expenses are the ordinary and necessary expenses of traveling away from
home for your business, profession, or job.” However, for these expenses to
be deductible, you must be away from your tax home (the town where your
business is located) for a period longer than one day’s work, and you must
be away overnight . . . .” 111
The process by which forum posters corrected each other’s errors and misunderstandings
is discussed further below. 112

Notably, most of the discussion of mileage and other expense deductions was found
in the Uberpeople and Reddit forums. With few exceptions, TurboTax contained a more
limited discussion of expenses and less extensive debate regarding which miles counted. 113
The questions posted were generally quite basic, and there were fewer nuanced questions
about expenses and mileage. 114 Some of the answers were more sophisticated, but many
were vague or contained standard or form language that did not adequately tailor the advice

109

See, e.g., USER68 (“Haircuts and clothing are generally not deductible. Clothing can be if it is specifically
required for the job – think welding helmet or fire retardant jacket.”).
110
USER142; USER164 (deducted meals).
111
USER167; see also the following exchange: USER86 asks “Can I claim my daily coffee as a deduction”?
USER67 and USER43 say yes; USER63 says no.
112
See discussion infra Part IV.D.
113
But see USER145 (“My understanding is that all mileage while ‘on the clock’ can be deducted, not just
that while driving a passenger.”); USER139 (responds: “The first pickup, last drop-off, and being at a ‘busy
area’ are definitely a ‘business location’. It's a big ‘gray area’ if you can count miles before your first
pickup/arrival at a ‘busy area’.”1.
114
See, e.g., USER80 (“I’m not claiming to have the answer, but from what I’ve read, we . . . are supposed
to use schedule C to report this income. This apparently is also where we report our expenses (ex: mileage)”);
USER79_TO (“I drove for Lyft for a couple of months last year. I was wondering what if anything I was
allowed to write off. Gas, Service on my car, Miles.”) One response to USER79 was particularly technical,
but merely contained a restatement of the rules and failed to help the driver understand their nuanced
application. See also USER24.

34

 to ridesharing. 115 In one case, for example, in response to a question about what can be
deducted, the answer provided offered a good overview of the law, but did not address the
law’s specific application to ridesharing. 116 In another, a “TurboTax Tax Pro” simply stated
that drivers could rely on the statement provided by Uber to the effect that “your mileage
may actually be more as you drove around waiting for a hit.” 117 Elsewhere, that poster
recommended a method of estimating miles driven whereby the driver “keep[s] track of
your mileage for one month starting from when you go available to when you go offline.” 118
The fact that forum posters struggled with expenses and deductions— but were
relatively compliant regarding income inclusions—may dovetail with the predictions of
the economics literature on tax compliance. That literature suggests that that even if Form
1099-K reporting prompts taxpayers to accurately state income on their tax returns, such
compliance may be partially eroded by inaccurate or excessive expense taking by the same
taxpayers. 119 We discuss the possible implications in greater detail in Part V. 120
b. Timing Issues
Mileage and other expenses aside, some forum participants also displayed a limited
understanding of timing issues and cost recovery. Specifically, to the extent that the
financial expenditure involved something other than a classic recurring outlay (e.g., gas,
tolls, etc.), some comments suggested that posters did not appreciate the difference between
current deductibility of the entire outlay and depreciation or capitalization over time. For
example, some posters erroneously raised the possibility of deducting the purchase price
of the vehicle. 121 Overall, this was not a dominant problem, perhaps because most drivers
115

See, e.g., USER151; USER150. We counted 29 instances of formulaic language in TurboTax.
USER24.
117
USER73.
118
Id.
119
Slemrod et al., supra note 39. That same study observed that Form 1099-K might incentivize taxpayers
who had not previously filed Schedule C (Profit or Loss from Business) to file that schedule. Id.
120
See infra Part V.A.
121
See, e.g., USER47 (“You can write off a work vehicle purchase in full the year you buy it, or you can
deduct a partial amount each year via depreciation.”); USER6 (“but what if I were to deduct out of my income
the cost of a vehicle? say I make $15,000 this year and buy the car I'm driving for $15,000. is that any
different than buying gas and bottled water? it's done for business purposes.”); USER116 (“I'm not a tax
expert either, but I think it depends on how much you use the car for business versus personal use. If you use
the car half and half, say, I imagine at best you could deduct half the cost as a business expense, not the full
cost.”).
116

35

 were using a preexisting personal vehicle for ridesharing. However, in cases in which
drivers were contemplating the purchase or lease of a car to use for ridesharing,
misunderstandings regarding deductions versus capitalization of outlays may present a
bigger problem.
2. Choice of Method: Standard Mileage vs. Actual Expenses
Another common topic of discussion concerned the choice, provided by tax law, of
the standard mileage method as opposed to the “actual expenses” method of recovering the
costs of using a vehicle for business. 122 As described above, the standard mileage method
allows a set per mile deduction ($0.56/mile for 2014) for the costs of automobile operation
while the actual expenses method requires tallying up allowable actual costs allocable to
business use. 123 If the driver takes the standard mileage deduction, certain non-automobile
business costs may also be deductible if the requirements of the relevant statutes are
satisfied.
Once again the questions and answers reflected a significant range in awareness
and sophistication. Most posters on Reddit and Uberpeople appeared familiar with at least
the basic idea of the standard mileage option. 124 Those new to driving and the forum were
immediately informed of the method and the need, regardless of method, to maintain
mileage logs. 125 In a few cases, the description of the method was sufficiently sophisticated
so as to include a discussion of limitations on the driver’s subsequent ability to switch

122

See supra note 87 and accompanying text.
Id.
124
See, e.g., USER20 (explaining standard mileage rate); but see USER161; USER62 ("Can you explain the
‘standard mileage reduction method’? And how much of it is a tax write off? I’m so new to this, it’s scary
what I don’t know. Thanks in advance for explaining like I’m 5.”).
125
See, e.g., USER169_TO (“How do you guys handle your 1099 tax status? Totally new to this. No idea
how it works, never been an independent contractor. I don't really have a ‘tax guy,’ Im just a ‘go to Liberty
taxes and get em done every year.’ Im in LA, if that makes any difference. Any stories/ideas/tips? Anyone
ever not just file?”; response by USER75: “Not filing is a terrible idea. It’s pretty easy. Liberty, H&R Block,
Turbotax, will be able to handle the taxes without batting an eye. Make sure you track your expenses and
take all the deductions you’re entitled to. Obviously consult a qualified professional, but generally, the
following are deductible: *IRS mileage rate for all the miles you drove related to Uber, including mileage
between passengers.”).
123

36

 methods. 126 Posters in both Reddit and Uberpeople generally agreed that drivers were better
off using the standard mileage method as opposed to deducting actual expenses.
A more nuanced question concerned which deductions a driver could additionally
deduct if they selected the standard mileage method. Forum posters generally agreed
(correctly) that some other expenses could be deducted. There was even general agreement
regarding the ability to deduct outlays such as tolls, fees to Uber, Uber phone rental, and
water and mints for passengers. Beyond that, however, posters argued over whether a wide
variety of additional expenditures could be deducted in addition to the standard mileage
deduction, including car washes, driver meals, driver clothing, and car detailing. For
example, in response to one poster’s question as to whether the decision to deduct car
washes was appropriate, another observed: “I’m fairly sure it as [sic]. As I understand it
anything not directly mileage related can be deducted in addition to the standard deduction.
SO no oil change deductions because it’s mileage related but washes and water for example
are OK.” 127 In contrast, another poster observed: “I like to have an idea of how much I'm
actually making. The 56 cents per mile is a reasonable estimate of my expenses in terms of
fuel, vehicle depreciation, and wear­and­tear, washes, etc.” 128 Still other posters appeared
divided on whether car washes could be deducted. 129
3. Documentation
Perhaps one of the most dominant refrains through the Reddit and Uberpeople
forums concerned the need to keep track of and retain documentation for expenses taken,
most importantly mileage. As noted above, most forum posters understood that mileage
numbers were important in preparing their tax returns, and many realized that the mileage
numbers provided by Uber and Lyft would understate permissible business miles and limit

126

See, e.g., USER74 (“If you choose to use itemized expenses in order to deduct those costs, you have to
use it every year for the duration of the lease. You could also forgo all of that and just use the Standard
Mileage Rate. But with a leased car, you have to use the SMR every year for the duration of your lease. You
can't switch to itemized in a later year like you can with a car you own.”); USER94.
127
USER50.
128
USER15. Although the comment suggests that the poster is using the standard mileage rate as a benchmark
for calculating profitability (which many posters seems to do), it also implies that the poster does not
anticipate additional deductions for cash washes, and that such outlays are included in the $.56/mile.
129
See, e.g., USER5 (“I would think you could argue car washes are not part of standard mileage and therefore
deductible.”); USER117_TO (deducted car washes and took standard mileage).

37

 their tax deductions. As a result, posters devoted a substantial amount of time to discussing
documentation, best practices, and technology that might facilitate good documentation.
Although a few outliers indicated that they would “estimate” the needed numbers, 130 most
posters were concerned with determining the best way to contemporaneously document
mileage and other expenses. This suggested a relatively compliant ethos in the forums. The
risk of IRS audit was a palpable concern in forum discussions, 131 though one that posters
might have overestimated. Forum participants actively considered what would constitute
adequate documentation if one were audited. 132
Forum participants liberally shared information and suggestions regarding the use
of various apps and spreadsheets to help track, store, and document mileage and
expenditures. The Reddit and Uberpeople datasets each included over 100 coded references
to third party apps including Exspensify, MileIQ, metromile, Google Sheets, GasBuddy,
Sherpashare, Dash, and triplog. The discussions about using these apps reflected worries
about audit risk. Thus, for example, thread participants discussed evidence that, upon audit,
the IRS might prefer paper records for mileage documentation. 133

130

USER22 (noting that there if one gets audited, one can “create [one’s] own documentation”; stating that
drivers should “estimate” and that “the chance of being audited…is very slim.”).
131
We counted 83 instances of the code “audit risk” in Reddit, and 160 instances in UberPeople.
132
See, e.g., USER124: (“Just as a side note, make sure your logs include:
­Starting odometer reading for each trip
­Ending odometer reading for each trip
­Start and End addresses of each trip if applicable
­Total mileage driven for the trip
­Purpose of trip
Less information than that, and your logs might not be usable in an audit, Ibelieve. IANAL [I am not a
lawyer]”); USER158 (“Technically you could recreate a written mileage log. The uber app shows your first
trip of the day. You can calculate the start location and determine the distance from when you first click 'on'
which is probably at your home or office (if you have a regular job). You could reconstruct your mileage that
way. But the better plan is to have a mileage­in, mileage­out log, with the beginning/ending odometer
readings. I typically use one of these in excel, and have multiple columns in the middle to allocate the mileage
between various categories (uber, work­reimbursable, work­non­reimbursable, commuting, charitable,
etc).”)
133
For example, consider the following exchange:
USER172: One other note ­ the IRS doesn't accept mileage that is tracked in a spreadsheet, so the
spreadsheet wouldn't hold up as proof if you were ever audited (meaning potential back taxes and
penalties).
USER162: “how does the irc accept mileage then???”
USER172: “Their preferred method is actually a paper log (yes, very outdated). We have basically
made an electronic version of this that tracks your odometer over time. They haven't explicitly
commented on if mileage tracking apps are sufficient proof or not.”

38

 As noted, what is not discernable from the forum discussions is the profile of and
effects of these discussions on the lurking reader who does not post. For example, it is
uncertain whether such readers comply with documentation requirements at the level
described by forum posters. We also cannot tell whether posters themselves actually
comply in the manner they publicly describe. Nonetheless, at least the public conversation
viewable by members of the ridesharing community (both posters and lurkers) devotes a
notable amount of time and attention to issues of tax compliance and documentation.
4. Issues Surrounding Form 1099-K Receipt
Drivers also showed varying levels of understanding of how income was reported
on the Forms 1099-K received from Uber in early 2015. As discussed above, this was the
year in which Uber changed its reporting position on Form 1099-K to report all driving
payments regardless of size. 134 This change generated confusion across all three forums. A
few posters were puzzled that they received Form 1099-K from Uber in 2015 at all, because
this was a departure from Uber’s prior reporting position. 135 Additionally, some posters had
questions about the numbers reported on Form 1099-K. Some understood that the Forms
1099-K listed gross amounts, including the safe rider fees, tolls, Uber fees, and split fare
fees, and that such fees should be deducted on Schedule C, Line 10 of the tax return to
generate the appropriate net number. 136 Others were confused about why Form 1099-K
included gross amounts and thought that the forms contained errors. 137 In all three forums,
a number of posts debated the accuracy of amounts reported on Form 1099-K and how to

USER74: “Thats exactly why my excel document contains a printable weekly log to be kept in your
car and filled out daily....You would then transfer that data into the Mileage & Expense Log on a
weekly basis, so the other worksheets in the document can pull the data needed for other calculations
(so you dont have to do it yourself). You would also keep the handwritten log as backup in a safe
place. however, the IRS directly states that "You must generally prepare a written record for it to be
considered adequate. This is because written evidence is more reliable than oral evidence alone.
However, if you prepare a record on a computer, it is considered an adequate record."
See also USER135: (“At the end of the year you only need the business miles. If you need to defend the
return, the daily log is priceless. You can also use My Tracks or whatever Google calls it, this will log an
entire route and default to saving it by date and time. But I think writing it down is still the best way, so far.”).
134
See discussion supra Part I.A.2.
135
See, e.g., thread entitled “Basically...does Uber screw us?”; USER16; USER110.
136
See, e.g., USER75.
137
See, e.g., USER74; USER52. USER75 and USER74 get into a fight about whether the fact that the Form
1099-K lists gross amounts matters in the end. USER75 gets it. USER74 does not).

39

 adjust for fees and commissions.138 Eventually, more knowledgeable forum participants
(including marketers like USER172/USER149) intervened to explain correctly how to
interpret the Forms 1099-K. 139 However, the impact of such interventions is not certain. As
we discuss in Part V, these data raise the possibility, not previously explored in the
information reporting literature, that some Form 1099-K recipients may actually have overreported earnings by failing to understand that amounts earned from Uber were gross
amounts. 140
Relatedly, some posters who drove for Lyft seemed unsure of how to report income,
given that they did not receive Forms 1099 from Lyft. 141 Others were also confused as to
why they received Form 1099-K from Uber but not from Lyft. 142 Some of these posters
raised questions of how and whether to include income from driving for Lyft. 143
5. Worker Classification Issues
While not predominantly related to taxation, driver opinions regarding worker
classification warranted attention due to their tax implications. 144 As discussed, the
threshold decision by the ridesharing platforms to classify workers as independent
contractors rather than employees gave rise to the issuance of Forms 1099-K and 1099MISC and to accompanying issues such as expense taking and Schedule C filing. Despite
this causal connection between independent contractor classification and the receipt of
Forms 1099 and related tax compliance and reporting issues, forum posters did not

138

See, e.g., posts entitled “Anyone else received a screwed up tax summary?”; “Check your 1099s”; “1099K and 1099-Misc WTF???”; “1099-K has incorrect numbers”; “Check your 1099­K **carefully** – they
screwed mine up”; “You will get 2 forms! 1099­MISC and 1099­K”; “Here, From The IRS, Is The Link
Detailing What a 1099­K Is, And What To Do With It”; “Text post about my 1099 form and IRS”, “1099­K
and Taxes.”
139
See, e.g., USER149 (“How to read your Uber 1099”); USER172 (“We wrote a blog post on how to read
your Uber 1099 - check it out here! https://tryzen99.com/blog_posts/read­uber­1099”); posts entitled “How
to read your Uber 1099”. There are numerous instances of commenters explaining that drivers have to report
the gross Form 1099-K amounts and then deduct fees. See, e.g., USER75 (“Uber now reports all your
earnings except for referral bonuses and a few random things on the 1099­K. You have to report that income
and then deduct the various Uber fees from that.”)
140
The literature on Form 1099-K reporting focuses on how increased expense taking may offset revenue
gains but has not discussed the possibility of overreporting. Slemrod et al., supra note 39.
141
TurboTax Lyft P5, P6, P11, P12, P16, P17, P18, P19, P21, P23, P25, P27, P30.
142
See post entitled “1099­Ks Uber vs. Lyft”.
143
USER7; USER55.
144
We discuss our findings regarding worker classification issues in other work.

40

 typically associate their opinions about worker classification with these tax compliance
matters. There were one or two notable exceptions, which we discuss below. 145
Some forum participants were enthusiastic about the prospect of being classified as
independent contractors rather than employees while others were not. But in both cases,
tax reporting and compliance issues were not the dominant reasons for their expressed
preferences; rather, their opinions were based on non-tax reasons. For example, on one
discussion thread dealing primarily with the employee-independent contractor debate, out
of 37 posts, we saw 13 comments by 7 different posters expressing a preference for
independent contractor rather than employee classification. 146 Reasons for preferring
independent contractor classification ranged from no stated reason 147 to concerns about
being liable for back taxes, to preferences for “not having a boss” to flexibility and
independence and not having to report to a superior. 148 Other than the thread originator,
there was only one poster who expressed enthusiasm for classification as an employee. The
thread originator cited ability to make claims for back taxes and other benefits (including
overtime and unemployment benefits) as upsides of employee classification. 149
These data suggest that there is heterogeneity in classification preference but also
a range of underlying rationales for those classification preferences. 150 Notably, however,
conversations about the potential tax compliance and reporting implications of independent
contractor vs. employee classification were generally absent. The meaning of the posters’
references to back taxes was unclear, but such concerns about back taxes were raised by
posters on both sides of the debate. We speculate that some forum posters were worried
that authorities would pursue them for self-employment taxes that had not been paid. Other
than the back taxes reference however, forum posters did not causally associate worker

145

See sources cited infra note 178-181 and accompanying text.
Of the 13 comments, the handle USER160 was responsible for 7.
147
USER122 (“But…I don’t want to be an uber employee”).
148
USER160 (“…you can also be held liable for back taxes”; “[t]he best part of this Uber thing is not having
a boss”); USER49 (“…”employers will always pay as little as they can legally get away with. The difference
is that they can now dictate your work schedule and behavior on the clock”); USER31 (“there are no managers
we dont’ report to anyone”).
149
USER126. The other poster pointed out the ability to unionize as an upside. See USER105.
150
See sources cited infra note 178-181 and accompanying text.
146

41

 classification with the tax compliance and reporting issues they were facing, but rather
based their preference on other non-tax factors.
6. Tax Preparation Issues
Forum participants discussed and debated how to prepare and file taxes and what
modalities and instruments to use in doing so. Several forum posters consulted, thought
about consulting, or encouraged others to consult a tax preparer or advisor. 151 We counted
115 coded references to tax preparers or advisors on Reddit and 196 on Uberpeople. One
poster summarized hilariously the types of concerns that might have motivated some
drivers to seek professional tax help:
“…Get yourself a good accountant, that's what I did. Cost me $300 a year
but saves my butt. Remember, the IRS is the only agency where you are
GUILTY and must prove yourself INNOCENT! No other government
agency has that power, it's the one agency that I won't screw with.
NSA, CIA, FBI, ATF. go jump off a cliff. IRS, yes sir, how can I help you
sir, yes sir I'll do that sir, you bet sir . . . . .” 152
Other posters expressed frustration regarding the costs of such tax preparation help or were
otherwise sensitive to the costs of hiring an adviser or preparer. 153 Among forum
participants who used a tax preparer or advisor, there was some appreciation of variation
in the quality and skill of such preparers or advisors. 154

151

See, e.g., USER50 (“Your best strategy is to consult with a tax accountant a few months before your taxes
are due and track and keep ALL your receipts until that time.”); USER41 (“I would, highly, and I MEAN
HIGHLY suggest you go with a real tax professional while working for uber.”); USER166 (“Get a reputable
tax person and do exactly what they tell you.”); USER45 (“I have an accountant that will be reviewing my
taxes before filing….”); USER5 (“…I would advise getting a tax professional….”); USER154 (“…Talk to
your tax person,…”); USER74 (“Consult a professional.”); USER82 (“Get a CPA. Use reddit advice for
asking your CPA questions, but don't take tax advice from people so bad at math they drive for Uber.”);
USER136 (“It is very much worth your time and money to speak to a Certified Public Accountant.”)
152
USER111.
153
USER144 (“…absolute bullshit how much they charge for someone to input numbers.”); USER60 (“HR
Block and other similar 3rd party tax preparers are getting the best $ from this paid $200 for a $111 return”);
USER132 (“How much does H&R Block charge to do your taxes?”); USER46_TO (“Ok so I am looking for
what name, address, and EIN that appears on the 1099's Uber sends out. I know that you don't need it to file
but you do if you don't want your account/tax software to charge you a higher price.”).
154
See USER52 (“ill contact my accountant and see his thoughts. I work in a business with many types of
write downs and have to go to a special accountant because of it. A few years back I switched accountants
and my current guy told me he could have saved me an extra $3000 if i had written this and that off. Saving

42

 Other forum posters stated that they prepared their own taxes using tax preparation
software. 155 We counted 44 references to tax preparation software on Reddit and 104 on
Uberpeople. One issue that was evident from TurboTax was the question of what version
of TurboTax software was appropriate. 14 out of 107 discussion threads in TurboTax dealt
with the question of which version of the software to use and whether rideshare drivers
needed to upgrade to the TurboTax Home and Business version to prepare their tax
return. 156 Some posters appeared surprised that they needed to upgrade from TurboTax
Deluxe to Home and Business to file Schedule C. Interestingly, a factor in their surprise or
confusion seemed to be the “soft” sense held by some forum posters that they were not
“running a business” and so should not be using the Home and Business version. 157 The
discussions about software versions and upgrades tracked the well-known TurboTax
product controversy of January 2015, in which TurboTax customers were displeased at
having to pay to upgrade to TurboTax Home and Business desktop software to file certain
Schedules (including Schedule C). 158 TurboTax reportedly backtracked and offered Deluxe
customers who had to upgrade a $25 rebate. 159 However, the fact of the rebate was not
reflected in the TurboTax forum.
B.

Role of Taxes in Decision Making

Another important theme was how taxes factored into forum posters’ assessments
regarding profitability of rideshare driving and decisions whether or not to drive. Taxes
factored into driving decisions and profitability in two ways: (a) decisions whether to drive
at all, and (b) decisions about possible driving strategies.

thousands is as simple as being with a guy who has the knowhow versus being at the wrong guy. Maybe this
works the same.”); USER113 (“Of course im not tax person and even the tax person I went to didn't seem
that bright”).
155
USER50, USER165, USER57, USER117, USER75, USER76_TO); USER140; USER130.
156
TurboTax Uber P20, P42, P43, P44, P45, P47, P53, P60, P61, P65, P67, P76.
157
TurboTax Uber P53, P76. See also TurboTax Uber P6, P42, P60, TurboTax Lyft P4, P9, P18.
158
See generally Laura Northrup, Changes to TurboTax Lead to Consumer Revolt, Opportunity for
Competitors (Jan. 23, 2015), http://consumerist.com/2015/01/23/changes-to-turbotax-lead-to-consumerrevolt-opportunity-for-competitors/; Janet Novack, Intuit Cries Uncle, Will Reverse TurboTax Deluxe
Changes (Jan. 29, 2015), http://www.forbes.com/sites/janetnovack/2015/01/22/intuit-offers-25-refund-toturbotax-deluxe-users-hurt-by-software-changes/. Deluxe users could fill out Schedule C as a form, but the
Home and Business upgrade was required to file it as part of the TurboTax package.
159
Id.

43

 1. The Decision to Drive
As discussed in Part III, profitability was among the most frequent discussion topics
in the threads we examined, and threads discussing profitability drew some of the largest
numbers of comments. Some participants posed the profitability question prior to deciding
to drive. Others, having driven, sought advice on how to assess their own profitability. Still
others shared detailed calculations of their profitability computations. Forum posters
considered several different elements in their computations of profitability, including
expenses, fees, tolls, taxes, and wear and tear on the vehicle. 160 The debates regarding how
to evaluate profitability were never fully resolved, in part because different participants
appeared to use different assumptions, facts, and terminology.
Taxes fit into these conversations in three ways: (1) as taxes per se, (2) as a proxy
for the costs of rideshare driving, and (3) as an indirect framing device that affected whether
drivers viewed profitability on a per mile or a per hour basis.
a. Taxes as Taxes
Although most posters understood at least at a broad level that taxes would reduce
their year-end take-home cash, a few did not appreciate the full potential impact of taxes
on profitability. 161 Some, for example, did not fully understand their obligation to
“withhold” taxes for themselves (both income tax and employment taxes) and the possible
need to file estimated taxes on a quarterly basis during the year. 162 One poster summed up

160

See, e.g., USER101 (“I once made a spreadsheet to figure in depreciation, insurance, gas, oil changes,
tires, etc...and it costs me like $.20 a mile to drive.”); USER114 (considering price of car, gas, tires, insurance,
brakes); USER106 (“You know that Uber never considers driver expenses such as fuel, maintenance or
depreciation”); USER56 (considering gas, wear and tear, and taxes).
161
See, e.g., USER25 (“This is emberassing, but I've never really had a job, hence income. What does it mean
to ‘write off taxes’? Can someone ELI5? I've no experiences in taxes either. Considering becoming a
driver.”); USER112_TO (“I just recently became a driver and didn't read over the 1099 tax form because I
needed to make money quickly. How do I know if I have to pay into taxes or not?”); USER21: (“3.) When
does Uber pay the driver? Are taxes are taken out of the payment to the driver?”); USER99 (“Do you drivers
usually owe (pay taxes) to the IRS, or do you get money back? (Tax refund).”).
162
See, for example, the following exchange:
USER171_TO: “So I'm trying to figure out how this 1099 thing works with Uber. To my
understanding, if I were to make $20,000 and had more than 200 transactions, then I would be sent
a 1099-K. If Uber paid me $600 or more directly, then I would get sent a 1099-MISC. Does this
sound correct? Does this mean if I make less than $20,000 then I don't need to file? Also, what direct
Uber payments count towards the 1099-MISC? Does anyone in CA have experience dealing with
1099's from Uber?”

44

 the point succinctly: “I wonder how many people will stop driving for Uber once they get
their 1099 and do their taxes? I'm guessing quite a few will once they realize how much
money they're actually making. Thoughts?” 163 Other forum posters seemed to appreciate
the need to set aside taxes. 164 Still others opined (sarcastically) that given the low Uber rates
and expense deductions, they would not have to worry about owing taxes. 165 Thus, there
was a range in forum poster awareness of tax burdens.
The fact that some posters did not appreciate the full impact of taxes on their
profitability may reflect an instance of what the literature on tax salience calls taxpayer
“spotlighting” on gross prices. That literature broadly suggests that how a tax is presented
or perceived will affect taxpayer behavior in ways different from what one might expect in

USER40: “of course you have to file taxes if you make less than $20k!! lol talk to a tax account in
your area.. dont believe what you read on reddit about taxes.. seek a professional.. i do know you
should mail 20% of your gross every 3 months using the 1040EZ form and in NJ 5% to the state
but thats it..”
USER157: “Correction especially for part-timer Uber drivers, you only have to pay the estimated
quarterly tax if you believe that you will owe more than $1000 in taxes at the end of the year. With
all of the mileage deductions, car washes, and rate cuts, unless you are Ubering full-time you might
not owe more than $1000. Remember it's not $1000 in Taxable Income, it's OWING $1000 or more
at the end of the year.”
USER40: “yea but most of us are gonna owe more than $1000.”
See also USER96_TO (“I just got approved to drive a week ago, so I have yet to figure out the tax implications
of my shiny, new part­time employment as an Uber driver....I know that full­time Uber Drivers are typically
classified as independent contractors and are required to pay quarterly estimated taxes once they pass a certain
profit threshold ­ however, is that still the case for someone who has a full­time, 40+ hour job and is just
doing Uber on the side for extra cash?...I'm currently planning to set aside 30% from every Uber paycheck
in a separate account so I can settle up at tax time, but as for whether I should be paying quarterly estimated
taxes or whether I should just be reporting this as additional income and paying what I owe come April 15th
­ I'm at a loss. I also have no idea how it will affect my filing for my regular full­time job. (Why must the tax
code be so stupidly complicated?”); USER90 (“Guessing a majority of Uber drivers are going to have an
extremely unhappy tax season. Guys driving a new Prius through uber finance and driving uber full time,
they've likely been living off of money that should have been withheld for taxes. I bet we'll see a large wave
of driver defections in the next few months because of this.”).
163
USER132_TO.
164
USER71 (“My thought is to just toss 20% in a savings account until I file taxes next year, but will this be
enough?”); USER74 (“I am currently preparing to put away about 30% of my total uber income for taxes.”);
USER88 (“I saved 25% of my uber payouts anticipating taxes.”).
165
See, e.g., USER54 (“You only need to pay taxes if you make a profit. With Uber's wonderful rates I don't
need to worry about that one”); USER155 (“If you are paying taxes on Uber income, you're doing it wrong.”).

45

 a perfectly rational world. 166 The spotlighting 167 hypothesis suggests that taxpayers may
underestimate the full tax burden and simply focus on the immediate price schedule in front
of them. 168 Spotlighting can arise when the imposition of the tax is separate from the market
decision, 169 for example, where the decision to drive occurs before receiving the tax bill. 170
Scholars hypothesize that spotlighting might also affect job choices and work decisions. 171

166

See Gamage & Shanske, Three Essays on Tax Salience: Market Salience and Political Salience, 65 TAX
L. REV. 19 (2011); David Gamage, On the Future of Tax Salience Scholarship: Operative Mechanisms and
Limiting Factors, 41 FLA. ST. U. L. REV. 173 (2013); Brian Galle, Hidden Taxes, 87 WASH. U. L. REV. 59
(2009); Deborah H. Schenk, Exploring the Salience Bias in Designing Taxes, 28 YALE J. ON REG. 253 (2011);
Jacob Goldin, Sales Tax Not Included: Designing Commodity Taxes for Inattentive Consumers, 122 YALE
L.J. 258 (2012); Lilian V. Faulhaber, The Hidden Limits of the Charitable Deduction: An Introduction to
Hypersalience, 92 B.U. L. REV. 1307 (2012); Andrew T. Hayashi, The Legal Salience of Taxation, 81 U.
CHI. L. REV. 1443 (2014); Susie Cleary Morse, Using Salience and Influence to Narrow the Tax Gap, 40
LOY. U. CHI. L.J. 483 (2009).
167
This terminology comes from Liebman and Zechkauser. Jeffrey B. Liebman and Richard J. Zeckhauser,
Schmeduling
(2004)
(unpublished
manuscript),
available
at
http://www.hks.harvard.edu/jeffreyliebman/schmeduling.pdf.
168
Id. (“Spotlighting occurs when consumers identify and respond to immediate or local prices, and ignore
the full schedule, even though future prices will be affected by current consumption.”); Gamage & Shanske,
supra note 166.
169
Gamage & Shanske, supra note 166, at 27.
170
Spotlighting behavior has been empirically demonstrated primarily in the sales tax, excise tax, personal
property tax, toll charge, and tax incentive contexts, Chetty, Looney & Kroft, Salience and Taxation: Theory
and Evidence, 99 AM. ECON. REV. 1145, 1165 (2009) (showing grocery shoppers were less likely to purchase
when tax information was posted than when only pre-tax prices were posted, despite having accurate
knowledge of sales taxes. Also demonstrating that tax increases included in posted prices reduce alcohol
sales more than taxes applied at the checkout); Richard Ott and David Andrus, The Effect of Personal
Property Taxes on Consumer Vehicle-Purchasing Decisions: A Partitioned Price/Mental Accounting Theory
Analysis, 28 PUB. FIN. REV. 134 (2000) (“Although respondents opined that [vehicle personal property taxes]
were too high, they had little effect on their decision to purchase a vehicle.”); Kelly Sims Gallagher & Erich
Muehlegger, Giving Green to Get Green? Incentives and Consumer Adoption of Hybrid Vehicle Technology,
61 J. ENVTL. ECON. & MGMT. 1, 9 (2011) (finding that “[c]onsumer response is greater to a sales tax
exemption, which is immediate and automatic at the time of purchase, than to an income tax credit, for which
a consumer must understand, apply for, and eventually collect as part of their tax return”); Amy Finkelstein,
EZ-Tax: Tax Salience and Tax Rates, 124 Q.J. ECON. 969, 970 (2009) (finding that when using electronic
rather than hand toll collection, “driving becomes less elastic with respect to the toll and toll setting becomes
less sensitive to the electoral calendar”). See also Tomer Blumkin, Bradley J. Ruffle & Yosef Ganun, Are
Income and Consumption Taxes Ever Really Equivalent? Evidence from a Real-Effort Experiment with Real
Goods, 56 EUROPEAN ECON. REV. 56 (2012) (finding that “the temporal separation between an individual’s
labor market allocation and subsequent consumption decisions leads individuals to work longer when faced
with a consumption tax than with an equivalent wage tax”); Gamage, Hayashi & Nakamura, Experimental
Evidence of Tax Salience and the Labor-Leisure Decision: Anchoring, Tax Aversion, or Complexity?, 41
PUB. FIN. REV. 203 (2012) (finding that “[s]ubjects are most willing to work when their net wage is
transparent. Any additional complexity in the wage description in the form of either a low base wage plus a
surcharge or a high base wage less a tax, decreases work participation”).
171
Gamage & Shanske, supra note 166, at 29 (“If workers make job choices based primarily on posted pretax
salary information, rather than on their aggregate post-tax salaries, then even the income tax may have lowmarket-salience”); Jacob Nussim, To Confuse and Protect: Taxes and Consumer Protection, 1 COLUM. J.

46

 The question of how taxpayers respond to perceived tax burdens may be particularly
important for the sharing economy because of the presence of new entrants and because
labor supply in this sector may be relatively elastic. 172
Relatedly, we observed estimating/guesstimating of the overall federal and state tax
burdens, with little analysis of marginal rates. Several forum participants seemed to pick a
feasible sounding average number in “guesstimating” how much to put away over the
course of the year to pay the eventual federal and state tax bills. 173 When used in this
manner, an estimated average tax rate can be a useful financial planning heuristic.
However, to the extent drivers are relying on calculations of after-tax returns in making
labor supply decisions, their decision making process may be broadly consistent with
another prediction of the salience literature, the “ironing” hypothesis. 174 Ironing predicts
that when faced with a progressive income tax or complex rate schedules, taxpayers may
focus on average rather than marginal tax rates when assessing the profitability of an
economic activity (such as consumption or supplying labor). While is it important to
distinguish appropriate financial planning uses of average rates from actual ironing
behavior, most posters did not employ the concept of a marginal tax rate at all and did not
appear to intentionally choose average versus marginal rate analysis in reaching certain
decisions.
In addition to the role of actual tax burdens in determining profitability, tax
compliance costs were not lost on forum participants. 175 One participant posted the
following detailed analysis regarding compliance costs in the ridesharing sector:
“There are costs associated with doing all this tax compliance correctly and
they are a deductible expense, but an expense and tax filing obligation that
does not scale well for a one car fleet. Uber has turned the game
upsidedown. When I owned and managed businesses, I had an accountant
on retainer and a fulltime book keeper. I had assets, tow trucks and rental

TAX L. 218, 253 (2010) (noting workers may be misled by gross salaries and may choose to oversupply labor,
but arguing that this may be an optimal outcome).
172
Oei & Ring, supra note 4; Barry & Caron, supra note 4.
173
See, e.g., sources cited supra note 164.
174
See sources cited supra note 170.
175
See supra note 153.

47

 cars at risk. Uber has put its independent contractor drivers in the situations
of assets at risk and tax compliance obligations and expenses while it keeps
the reward potential that went hand in hand with assets at risk and
compliance expenses, mostly in the lap of its drivers, without considering
the disincentives for drivers to invest and put the assets invested in at risk.
Uber sets the pricing. The driver cannot work harder to increase income
because his costs mostly rise proportionately with extra miles driven to
gross higher income. Drivers are attracted by a near instant direct deposit
and avoid considering all of the risks and costs vs. the reward potential. It
is an unsustainable business model, great for Uber and Uberx riders as long
as the service is available anywhere near current pricing.” 176
Thus, at least a few drivers thought about the costs of tax preparation and compliance for
independent contractors as a factor in determining whether rideshare driving was
profitable. 177
One final point bears noting: As discussed above, most posters did not directly
connect worker classification issues with tax filing and compliance obligations. 178 But
some did indirectly raise a connection between the status of drivers as employees or
independent contractors and the potential impact on the ridesharing business model and its
ultimately profitability (with taxes being a component of such profitability). Mixed feelings
and opinions about worker classification were evident in various discussion threads and
often seemed tied to uncertainty about the actual economic implications of one
classification over another. 179 For example, some posters questioned whether litigation
would force Uber to treat drivers as “true” independent contractors by shifting more costs

176

USER161.
See generally supra Part IV.A.
178
See discussion supra Part IV.A.5.
179
See, e.g., USER123 (“So now what? Uber and Lyft are going to be hit with a shitload more expenses, and
it’s coming straight out of your fares, because they’re certainly not going to raise the rates.”); USER12
(“Personally am not a fan of unions, would not join or pay dues, I am an independent contractor.”); USER44
(“We’re independent contractors running our own businesses. We’re management, not labor.”); USER84
(“Personally, I have no interest in being an Uber employee”); USER113, USER165 (discussion of possible
effects on Uber business model if drivers are held to be employees). One commenter noted, “I hate that we
have a distinction, which is what’s driving my disdain in the first place.” USER123.
177

48

 to drivers, while others maintained that even a finding that drivers were employees would
have an indeterminate economic effect on actual driver costs. 180 Some posters expressed
doubt that employee status would improve their situation because the costs would
ultimately be borne by drivers anyway. 181 Thus, even though the posters’ worker
classification comments did not pertain directly to tax law, the indirect economic
implications (which encompasses tax burdens) did not escape forum posters.
b. Tax Numbers as Proxies
Tax numbers also played a role as proxies in how forum posters estimated other
expenses of driving. A major source of difficulty for forum posters was how to calculate
and evaluate the costs of using personal property for business, including costs associated
with vehicle wear and tear. 182 In this context, many drivers used the tax system’s standard
mileage allowance ($.56/mile for 2014) as a proxy for calculating economic costs of
driving the vehicle, especially in accounting for the impact of depreciation. 183 Several
posters appeared not to understand that the standard mileage allowance was a tax number

180

USER54, USER13, USER173, USER105, and USER155.
USER146 (“Uber is exploiting a one sided coercive contract that favors Uber over the drivers”); USER77
(“…freelance workers would end up taking the biggest hit”).
182
As an example of a poster not appreciating the impact of vehicle wear and tear, see USER35_TO (“just
got my 1099k and for the 4 months I was driving I made $3200. I haven't added up my receipts for gas yet
but I'm figuring around 500 or so spent. When I first started driving my car appraised for $18000. I later sold
my car for $16000. Because of the mileage. They wouldn't give me the same amount as the original offer. So
all said and done after taxes I'll actually end up loosing money driving for Uber.” In response to comments
from other posters who questions why this forum participant was surprised that driving would likely decrease
the value of the car, USER35 clarified: “I knew it would but I didn't expect a depreciation of $2000. Once I
get my taxes in line I'll have a final number. I'd be happy coming out even. I needed the money when I was
driving. It helped out a lot when I needed it but not worth it to me anymore. I got a new job making
significantly more money.”); see also USER53 (“There's no doubt that drivers have higher costs than your
typical salaried 9­5'er, but that is the price we pay for having much greater freedom than the other guy. . ..
On top of that, it's not exactly equal because I didn't take into account the much more frequent oil changes
that I perform than your average 9­5'er, and car maintenance in general, but all of this goes back to the original
question that I posed ­ Is the flexibility important enough for you to take on these expenses?”).
183
See, e.g., USER1 (“That's $160 after commission. So assuming that's 200 miles and operating cost is
.57/mile as IRS deduction states, that's $114 operating cost, and you'd be taxed on $46 (difference in revenue
­ operating costs) which is $11.5. So net after commission, operating costs, and tax your take home is $34.5
for 10 hours of work.”); USER17_TO (“The IRS deduction rate of $0.575/mile for 2015 is pretty accurate
in terms of the actual cost per mile to drive a vehicle after depreciation, gas, oil, maintenance, and other
expenses.”); USER89 (“The standard mileage deduction (which I used ALL of the mileage that I clocked
when the app was ON and ready for ride requests) worked in my favor. It showed that driving for Uber was
a money loser for me.”).
181

49

 and not necessarily a reflection of economic reality. 184 Others criticized the use of the
standard mileage allowance as irrelevant for purposes of determining economic
profitability, arguing that it actually costs nobody $.56/mile to operate their vehicle. 185
More generally, forum participants displayed confusion and disagreement
regarding the relationship between tax losses and economic losses. Some posters expressed
satisfaction at incurring a tax loss, not seeming to realize that the tax loss might reflect a
true economic loss. Conversely, others failed to appreciate that tax losses might be
generated through aggressive tax reporting by drivers experiencing actual economic
profits. Consider the following exchange:
USER120: “The milage [sic] deduction to me was a huge item. I used Turbo
Tax and Quickbooks to enter all items and as far as I'm concerned I made
money just by not having to pay a large tax bill like I did last year before I
started driving Uber.”
USER90: “Only Uber drivers are dumb enough to be excited about pulling
a loss on their operations.”
This exchange illustrates how one poster is excited about tax losses, believing that those
losses are disguising economic gains, but the other presumes that those tax losses reflect
actual economic losses. Of course, there is no way of knowing who is right without
additional information.
c. Taxes as a Framing Device for Profitability Computations
Tax concepts also influenced whether forum participants measured and discussed
profitability on a per-mile or a per-hour basis. Forum participants frequently made
profitability calculations on a per mile basis. 186 The per-mile framing was likely prompted

184

See sources cited supra note 183.
See, e.g., USER42 (“The IRS mileage deduction isn't ‘operating costs.’ It's solely for the depreciation of
the value of the vehicle due to mileage driven, and it's only relevant at tax time for purposes of "reducing"
your tax bill. It certainly doesn't cost me (or anyone else) $114 to operate a car for 200 miles.”); USER153
(“be careful. Many people in here will say they made $10 for a 10 mile ride, then subtract gas, then subtract
57.5 cents per mile, and tell you they made $2 an hour. They think the 57.5 cents is their "cost to operate
their car" because the "IRS says so.””); USER81 (“I run my vehicle for way less than .56.”).
186
In both Reddit and Uberpeople, the code “Profitability: Per-Mile vs. Per Hour” was among the most
common (361 occurrences in Reddit; 359 in Uberpeople).
185

50

 by how two key costs of driving are measured: (1) tax law’s standard mileage deduction,
which is frequently used as a proxy for assessing profitability, and (2) gas and vehicle
mileage, which is computed on a MPG basis.187 However, sometimes drivers also described
their profitability in dollars per hour, reflecting their frequent comparisons of the decision
to drive with alternative low wage employment, e.g., Walmart, which pays on a per-hour
basis. 188 There were fewer references to per-week or per-month computations.
2. Decisions on How to Drive
a. The Role of Taxes in Deciding “How” to Drive
Beyond the binary decision of whether to drive at all, drivers face a secondary
decision of “how” to drive, that is, whether to drive on a part-time or full-time basis. 189
Here, again, taxes played a role in decision making both in their own right and as proxies
for other important measurements. There seemed to be a general consensus that it is more
likely to make sense to drive for Uber part time than full time. 190 This consensus was
supported by a number of non-tax factors including: (1) driving part time enables the driver
to select the most profitable times of day to drive 191 whereas full-time drivers need to drive
at suboptimal times and are more likely to experience burnout, 192 (2) forum participants

187

The fact that vehicle wear and tear may ultimately be a bigger cost in ridesharing may be less salient to
drivers because gas purchases constitute a daily or weekly purchase.
188
See, e.g., USER138 (“since uberx decided to drop prices by 70% last year drivers are making less than
minimum wage. when you work for walmart you are guaranteed you will make 9 dollars for every hour you
showed up. with uberx sometimes you can come back home empty handed.”); USER94 (“Uber is now the
walmart of rideshare/transportation, they do not care if the drivers make livable wages, if you want a better
job, look somewhere else.”); USER65 (“A Walmart checker may gross $2,000 an hour at their register, but
what do they get to take home each hour?”). Of course, such comments do not reflect the greater flexibility
in setting hours for Uber drivers than for substitute low-wage employment. See, e.g., USER129 (“I am not
obligated to work Uber which is the bonus. Doing this and my full time job I work 6 days a week. It's tiring
and fortunately I can drop one whenever I feel like it.”); USER94 (“I would rather drive Uber than work
behind the counter of a McDonalds”).
189
Another choice discussed was whether to drive for UberX or UberBlack, or to do both.
190
See, e.g., USER22 (“Uber's meant to be a part­time, supplemental income gig. making it a full time, main
hustle is where I see people get bitter about it.”).
191
See, e.g., USER11: (“I like being able to pick and choose the times I drive. I only drive during surges now.
i work like 8 hours a week usually making 200­250. I tried driving 8 hours straight one day and I was do
bored out of my mind. I like to think that I can just stop after one or 2 good rides.”); USER159: “There's just
not enough weekday daytime business in Richmond to make Uber a viable full­time gig.”.
192
See, e.g., USER66 (“My advice: you work full time at this, you burn out. Everyone who does this part
time enjoys it. Those who don't...”); USER165 (“Also, in order to really make it work full time, you'd need
to work a crazy schedule. It just doesn't make sense to drive between 9 and 5 when everyone else is at work

51

 perceive vehicle wear and tear as less significant and feel more justified in ignoring these
costs when driving part time, 193 and (3) the instability of Uber’s pricing/rate structure and
the risk of relying on Uber to make a living. 194 Tax factors also played a role. Forum
participants judged obligations for quarterly filing and payment of estimated taxes to be
less onerous for part-time drivers with other full-time employment because such drivers
could avoid estimated tax obligations by simply increasing wage withholdings from their
W-2 jobs. 195 Forum participants also seemed to appreciate, implicitly, the value of untaxed
benefits (e.g., paid vacation) received from alternative wage employment. 196
Although part-time driving was viewed as preferable to full-time driving, some
forum participants noted that even part-time driving might not be profitable. One poster
wrote:
. . . I see people as being in 2 categories either: a) You are trying to make
Uber a full time job b) You have a job and use Uber to supplement your
income . . . If you are in category (b), you will probably make around $12
an hour if you live in a decent city, or more if you time your hours so you
only work during the most profitable times (full timers don't have this
luxury obviously). But if you live anywhere else you will be making below
minimum wage. At that point it would only make sense to continue driving
if you literally can't make ends meet and you can't find another job to do on
the weekends.

so you'd have to do a few hours in the morning, go home, come back out, do several more hours in the
evening, then work every weekend. I don't know about you but that's not something I'd be willing to do.”)
193
See sources cited supra note 182; see also USER70; USER170.
194
See, e.g., USER165 (“IMO, Uber isn't reliable enough to turn it into a career. It's great for cash on the side
or to help you out if you're in between things but, as we've seen in most parts of the country, rates can drop
at a moment's notice whenever Uber feels like it.”); Uberpeople P470-476 (various posts about rate cuts).
195
See, e.g., USER42 (“I agree, and the fact that I have regular work/don't need to worry about setting aside
35% for taxes is why it still pays for me.”); USER66 (notes that you can adjust job withholding to avoid
paying quarterly taxes on Uber income); USER36 (“If you are part­time, I assume you have a W­2 job.
Instead of doing estimated tax payments, you can adjust the W­2 tax withholding to cover both jobs.”).
196
Although forum participants did not explicitly state that these benefits were untaxed compensation, the
point was implicit. See, e.g., USER165 (“It really depends on what your current job is. If you're making a
living wage, have job security, benefits, time off, vacations, etc... Then stick with it even if you think you
could make a little more in the short term with Uber.”); USER133 (“Because of the fact that just about any
entry level, full­time job pays better than Uber and has actual benefits, no person who is qualified for and
able to acquire such a job would drive for Uber full time.”).

52

 Uber knows this and exploits the fact that its part­time drivers are either
desperate for money or say "it's for beer money" and don't bother to do the
calculations to realize they are making below minimum wage. And if that's
the case, you would be better off working at McDonalds. At least that job
is here to stay, you know exactly how much you are making, and you aren't
putting miles on your car. 197
The sentiment here is that part-time drivers may not have the incentive to pay attention to
taxes and other expenses in determining whether driving is profitable.
b. The Labor-Leisure Trade-Off in Part-Time Driving
Discussions among forum posters regarding their decisions to drive part time reveal
interesting insights into the labor-leisure trade-off, a frequent subject of economic
analysis. 198 Forum posters generally did not explicitly discuss leisure as something that they
traded off against driving. However, they seemed to weigh leisure time implicitly, as
reflected by: (1) discussions about the flexibility of driving for Uber, (2) descriptions of
driving as having both business and pleasure components for a subset of forum
participants, 199 and (3) descriptions of the incentive to drive as the opportunity to earn some
money for “extras” or “beer money.” 200 These descriptions are suggestive of driving being

197

USER133.
See generally GEORGE BORJAS, LABOR ECONOMICS (7th ed. 2016).
199
See, e.g., USER23 (“As a result I have taken a view to only drive for pure sport and entertainment…and
as a loan until I have to file for taxes.”); USER78 (“…the hourly rate isn't bad for a part time job. I also get
to know my city better and I can meet and talk with all kinds of interesting people while on Uber time.”);
USER2 (“Uber is like gambling. Some people do it for a full time job but most just do it for fun.”); USER37
(“…regardless I'm not doing it entirely for the cash. I don't get to drive as part of my daily routine, so 5­8
hours a week behind the wheel is kind of fun. Plus I'm going to enjoy getting to know other parts of the city.
And finally, I hope to meet some interesting people. I think it's a win/win.”); USER156 (“Same. I do it for
"fun". I enjoy the people I have given rides to, the stories I have and the rush of picking up a fare. It gives
me a few extra bucks some weeks with the flexibility to do a ton of driving or zero. Would I ever do Uber
for a full time job? Heck no.”); USER165 (“I enjoy driving and meeting people and the social aspect of Uber
as well, but based on what I've seen around this sub, I suspect I'd feel differently if I put 40+ hours in every
week instead of ~10.”).
200
The term “beer money” occurred frequently as shorthand for driving for extra cash. See, e.g., USER104
(“Because most UberX Drivers are like myself. People who just do this part time while family is asleep to
make some extra beer money.”); USER133 (“ . . .Uber knows this and exploits the fact that its part­time
drivers are either desperate for money or say "it's for beer money" and don't bother to do the calculations to
realize they are making below minimum wage.”); see also USER42 (“For me, it's exactly what it was
supposed to be when uberX first came out ­ extra pocket money, not a career.”)
198

53

 a choice, to be weighed against other alternatives, such as “free time” on the weekend. As
discussed above, it is possible that forum posters made these choices while mismeasuring
the true costs of their earnings (through the failure to fully account for expenses, taxes, and
wear and tear). 201
3. Summary
These observations about forum posters’ profitability assessments, driving
decisions, and labor-leisure trade-offs help illuminate how cognitive limitations and market
considerations (including tax considerations) combine to shape their labor supply
decisions. For example, to the extent that mismeasurement of driving costs affects driver
decisions, it is unclear whether having a full year’s experience driving is enough to
completely mitigate the mismeasurement. Some costs might become visible during the tax
return preparation process and allow drivers to revise their profitability assessments or
implement new strategies (e.g., setting aside money to pay taxes) the following year. But
other costs may remain hidden longer or may never be fully appreciated. For example,
vehicle wear and tear may accelerate the need for repairs and replacement, but these costs
may not be visible for several years, and drivers might not associate them with their
ridesharing activities when they occur.
C.

Tax Sophistication and Tax Compliance Culture

Finally, we examined broader questions of how sophisticated forum participants
are in their understanding of tax law, how they conduct themselves (or, at least, talk about
conducting themselves) in terms of tax compliance, and how other cultural characteristics
of the discussion boards may shape the transmission of tax knowledge online.
1. Overall Level of Sophistication.
As discussed, we observed a range of sophistication in how well forum participants
understood taxes. Discussions on Reddit and Uberpeople seemed more sophisticated than
those on TurboTax in several respects. Discussions on Reddit and Uberpeople often used
tax terms and concepts more accurately. Participants in the TurboTax forums asked more

201

See discussion supra Part IV.B.1.a.

54

 basic questions about where and how to enter income, whether they had to file taxes, what
software to use, and what to do with Form 1099. There were a number of questions that
did not make sense on TurboTax. 202 Admittedly, however, it was difficult to get a robust
sense of poster sophistication on TurboTax because there was much less back-and-forth
conversation: participants tended to pose a question, and then a TurboTax employee,
professional, or “superuser” would answer that question.
2. Process of Error Correction and Disapproval.
Another interesting feature was the process by which disagreement was expressed
and errors corrected on Reddit and Uberpeople. When a poster said something wrong (e.g.,
took a wrong tax reporting position or gave an inaccurate answer to some else’s question),
the error was often, and often quickly, corrected by other posters. For example, in one of
the forums, where several posters said they would deduct uniforms and haircuts, others
chimed in to say that these items are not generally deductible. 203 When one poster expressed
an intent to deduct meals, another immediately countered that meals are not generally
deductible. 204 Where one poster opined that taxes would not be owed if grossing less than
$20,000, other forum participants were swift to correct the error. 205
We observed error correction in the other forum as well. When some forum
participants suggested that they might not report income because they did not receive a
Lyft Form 1099-K, others (including some marketers of tax services) pointed out the audit
risk and the obligation to include income. 206 On one discussion thread, the thread originator

202

See, e.g., USER27 (“how do I add mileage to my return? I am an Uber driver and need to add mileage to
my return”); USER33 (“Does Uber count as public transportation for tax purposes?”).
203
USER147 (attempts to deduct uniform); USER134 (will deduct haircuts and clothes); USER26 and
USER68 correct USER147 and USER134, saying that these items are not deductible; USER40 (says he will
deduct clothes); USER102 (sarcastically corrects USER40).
204
USER164 (says they are going to deduct meals); USER75 (tells USER164 “You can’t generally deduct
meals”); USER4 (tells USER164 “you must be a really shitty uber driver if youre deducting meals from your
tax. FRAUD”). See also the following exchange: USER3 claims that he deducts one meal a day; USER75
informs him that “Meals in this circumstance are absolutely not deductible.” USER82 also says meals are
not deductible..
205
USER6 (thinks he does not have to pay taxes, other forum participants correct him).
206
USER7 (asks whether income not reported on Form 1099 needs to be “claimed” and USER64 suggests
that “[i]f [Lyft is] not reporting it to the IRS then I’m not going to report it; USER149 (USER172 founder)
alerts them to compliance obligation and audit risk).

55

 posted an image of his tax return and the expenses he wrote off, which showed a net loss. 207
The poster reported filing that tax return with the help of a “reputable tax agent.” Other
posters were quick to point out problems with his return, making statement such as:
•

“$[XX] for waters and snacks? On just $[XXXX] in gross fares? Gotta say that
is some creative accounting.” 208

•

“How did you take into account what were personal expenses vs. business
expenses? In other words was all that gas used for Uber only? How could you
differentiate it? IRS may want to know in an audit.” 209

•

“I agree with other posters...think you will be in big trouble if audit. at $[X] gal
(not sure what you pay) you used [XXX] gallons of gas for only [XXX] trips???
No wonder you drank so much water! I will bet you did not keep track of actual
miles, right? Share them if you did. I drove [XXXXX] miles in [X] months!!
about [XXXX] was trip miles.” 210

•

“I would be worried about this tax person, and would not recommend him. (I'm
a former CPA, by the way.) I would also immediately ask him about a few very
obvious issues…” 211

•

“I can tell you that the numbers you have seem way out there to me and I agree
completely with the poster who is a CPA that there are some very questionable
things going on with your return.” 212

These comments represent an instance of robust and unequivocal error correction. 213

207

USER30.
USER119.
209
USER168.
210
USER14.
211
USER149.
212
USER63.
213
See also the following exchange:
USER109; “If you have another vehicle in the family available for personal use (I.e. for me my wife
has a truck) then you can claim every mile you drive your user vehicle as business whether it's
actually for business or not. You may want to fabricate a mileage log to back that up though just in
case”
USER158: “Um…False”
USER109: “Yes you can claim 100% business usage on a vehicle if is not your only vehicle ...why
would that be false?”
USER158: “That is true ­ but you said: You can claim every mile you drive your user vehicle as
business whether it's actually for business or not. The "or not" makes it false.”
208

56

 Disapproval by Upvoting and Downvoting. A notable feature of Reddit was that
even if an error was not explicitly corrected or contradicted, disapproval or disagreement
sometimes occurred by upvoting and downvoting. For example, where one poster stated,
with respect to whether “dead miles” count as business mileage, “If you drive around
looking for fares that's a valid business purpose. Show me where it's not,” that statement
received 8 points (upvotes minus downvotes). 214 When someone else responded “Show me
where it is. You are not actively engaging in commerce unloaded,” that comment received
-6 points (i.e., six more downvotes than upvotes). 215 When another poster wrote “I think
we should simply not pay the IRS anything. Fuck them. Fuck the United States. This
country can seriously choke on a gay cock,” that statement received -4 points. 216 (In the
latter instance, it is unclear whether the downvotes were triggered by the tax noncompliance or the phrasing.)
Thus, on Reddit, there was arguably more than one mode of error correction, and
we speculate that, among some Reddit users, upvoting and downvoting might be another
powerful signal of community sentiment, in addition to outright disagreement. But
upvoting and downvoting is not a perfect signal of accuracy. We observed instances where
Reddit users sometimes upvoted popular but not totally accurate advice. For example,
where someone wrote, “They only track your miles while on a fare. It's extremely important
to track ALL of your mileage, as it is all deductible,” that comment, while not necessarily
completely accurate, received 5 points. 217

In sum, we observed that error correction was surprisingly robust and frequent. This
created an overall impression of a compliant culture on the threads, at least in the case of
correcting egregious errors. Error correction, however, might be less a matter of
compliance and more a matter of asserting and maintaining status and respect in an online

USER158: “...And fabricating a mileage log is fraud. Play by the rules. You would be surprised
what information comes out when IRS CI investigates a TP. Crazy the stuff people will say on an
open forum.”.
214
USER75.
215
USER148.
216
USER18.
217
USER157.

57

 community. Error correction was, of course, an imperfect process. It did not always
happen, and even when it did happen was not always effective. We observed instances in
which errors, misstatements or misunderstandings of the law, or expressed intent not to
comply went uncorrected. 218 We also observed instances where, even if corrected,
corrections were subsequently undermined by recalcitrant commenters who perpetuated
the error. 219 For example, on one thread, accurate commenter statements of which miles are
deductible were drowned out by repeated restatements of more aggressive/wrong tax
positions by other commenters, such that by the end of the thread, it may have been
impossible for the lay reader to tell which was the correct rule. 220 Finally, in all of this, it is
unclear whether posters were compliant or accurate in their actual tax behaviors,
notwithstanding the existence of error correction on the boards. However, to the extent
forum readers may be influenced by their perceptions of the conduct and norms of their
peers, the tenor of the forums would likely be influential.
3. Accuracy of Tax Advising and Commentary on the Forums
Related to the question of how errors get corrected in the forums is the question of
how tax advice is given and received. As our discussion above shows, there was a notable
amount of accurate tax advice and commentary given on the discussion boards. In many
instances, forum participants on Reddit and Uberpeople stated the tax law accurately,
correctly characterizing for example, the rules with respect to which miles count, whether
certain items can be deducted, whether income had to be reported, and where on the tax
return to report it. 221 Forum participants also often referred directly to IRS websites and
publications in formulating advice. 222 Several forum participants were also generous in
sharing spreadsheet and third party applications that they used in filing taxes, documenting
mileage, etc. 223

218

See, e.g., Uberpeople P11.
Id.
220
On one thread, for example, USER149 and USER93 warn about commute miles not being deductible, but
USER81, USER59, USER88, USER8, and others persists in claiming that all miles driven with the Uber app
on are deductible and that there is no commute.
221
See, e.g., USER158; USER100; USER50; USER141.
222
See, e.g., USER141; USER87; USER58; USER75, USER38.
223
See, e.g., USER74_TO; USER85; USER92; USER69; USER48; USER34.
219

58

 However, instances of accurate tax advising were interspersed with inaccurate,
vague, or misleading statements about the tax law. As a consequence, while we were able
to identify good advice when it occurred, we also took note of many instances of
oversimplified, confusing, or just wrong tax advice. To take just a few examples:
•

“Be careful, if you lose money 3 out of 5 years, you become not-for-profit and
cannot count those losses against other income.” 224

•

“If you don't make a taxable income, then your business is considered a
HOBBY by the IRS and every penny is taxable.” 225

•

“If the time comes when you get audited, you can create your own
documentation at any time.” 226

•

“You cannot deduct .56 cents per mile if your vehicle generates income from
even an ‘informal’ taxi service. You must deduct actual expenses and
depreciaton [sic] incurred, unless you are leasing your vehicle.” 227

•

“I deduct one meal a day, it’s been awhile since I looked it up. Just don’t eat at
a fancy restaurant.” 228

•

“This is what I do and I don't know if it's going to work. I know my average
MPG is almost exactly 30, so I just take that and look at my receipts and find
the total gallons I bought. 30x11 gallons for example = 330 miles. Boom
done.” 229

•

“Once a month my bride and I go out for a decent meal out to discuss such
topics as Uber, our rental properties, and how I'm running my consulting
business. We also talk about our kids, what's happening on Veep, and where we
want to vacation next summer. I've been expensing these outings for better than
10 years. Never been a problem. Just make sure you hold onto receipts and don't
abuse the privilege.” 230

224

USER157. This statement and the next are oversimplifications of the hobby loss rule. I.R.C. § 183.
USER115_TO.
226
USER22. This comment does not comply with the substantiation requirements.
227
USER161. This is wrong. Rideshare drivers are use standard mileage.
228
USER3. Meals are not deductible.
229
USER18. This is obviously not the correct way to track mileage.
230
USER43. Meals are not deductible.
225

59

 Given that good advice was intermingled with vague, misleading, or inaccurate statements,
it is difficult to know whether readers of the discussion boards were able to appreciate and
understand the good advice, or the extent to which they were misled by bad advice
drowning out the good.
We also observed a fair amount of cautioning or disclaiming that accompanied the
tax advice dispensed on the discussion boards. For example, forum participants urged each
other to consult with professional tax advisors, and told each other not to rely on the tax
advice they themselves gave on the boards. 231 Posters frequently referred each other to IRS
websites and publications (either by linking to them or by excerpting and quoting text) in
supporting statements they were making. 232 We wondered whether this might either reflect
some sense of responsibility for the dispensing of tax advice, or a perception that there was
some risk or consequence to themselves (either legal or social) from dispensing inaccurate
advice to other forum readers, or some other community norm in the forums. We have no
idea whether such disclaimers were effective in terms of encouraging readers to seek
professional tax help.
4.

“Marketed” Tax Advice in the Discussion Forums.
In addition to ad hoc comments and advice by various posters, we also observed

instances of CPAs, former CPAs, and other self-identified experts answering or
volunteering to answer questions. Some of these posters used the forums as a platform to
market their businesses or web and mobile applications they had developed. 233 Others just

231
See, e.g., USER116 (“I’m not a tax expert either …. But if you get audited don’t look at me. You’re better
off Googling stuff or asking a tax adviser.”); USER66 (“As I said, this is what I’ve gleaned, but I’m not a tax
professional. Feel free to correct me if I’m wrong”); USER82 (“Pro tip: Don’t take advice from this sub”);
USER137 (“I start [tracking miles] from the time I go online to accept calls. If I get no action, and need to
move closer to a busy area, I include those miles too. However, I’m not a tax professional.”). See also the
signature block of USER72, a well known forum member. (“I am a geologist; not a CPA, attorney, or
anything else that means my work should be taken as the gospel. I provide information/advice to the best of
my knowledge from my personal experience driving for UberX & Lyft and business knowledge”); USER102
(“Asking for tax advise on this (or any) forum is a recipe for disaster and an unpleasant audit. Plenty of bad
advice will be given. It is best to ask a tax professional (hint: They'll just say to take the IRS standard $0.56
per mile)”).
232
See sources cited supra note 222.
233
See, e.g., USER149; USER127; USER91; USER118; USER172.

60

 seemed to be offering free advice and sharing their experience, expertise, and spreadsheets,
though perhaps with the anticipation of future profit. 234
The most prominent example of “marketed” tax advice in both the Reddit and
Uberpeople forums was the poster USER172/USER149. 235 This poster was the owner of
the now-defunct tryzen99.com website. He originated 7 separate threads on Reddit and
commented 63 times, making him the sixth most frequent commenter. On Uberpeople, he
originated three threads and commented 67 times. The threads he originated pertained to
receipt of Forms 1099 from Uber and Lyft, how to read the forms, other issues confronting
ridesharing drivers, and general issues relevant to independent contractors (such as best
cities for independent contractors, and health insurance). This poster’s comments spanned
several issues, including which miles “count” as deductible business miles, how to
understand the Forms 1099-K received from Uber, deductibility of items such as meals,
choice of method (standard mileage vs. actual costs), and other issues facing independent
contractors. He also posted a number of links to his website, blog, and ridesharing tax
guides he had published. 236 He would sometimes interject in discussion threads posted by
other marketers to steer the conversation in different directions.
Overall, we found that USER172/USER149’s advice was in the ballpark of
accurate, but there were some problem areas. For example, at one point he claimed that
drivers could only deduct 50% of water or snacks provided to passengers. But that advice
was subsequently recanted in the ridesharing guide published on the zen99 website. 237 In
addition, prior to January 2015, he advised readers that they would not receive Forms 1099K unless they met the 200 rides/$20,000 threshold. This turned out not to be the case, as
Uber decided to issue Forms 1099-K to all drivers.
Perhaps most importantly, USER172/USER149 consistently took the position in
one of the forums that all miles driven on Uber business, including miles driven from home

234

See, e.g., USER74; USER100; USER50; USER107.
This poster used two separate usernames in each forum.
236
As of August 2015, tryzen99.com shut down its business. http://www.businessinsider.com/why-zen99closed-its-doors-2015-8.
237
https://tryzen99.com/1099-tax-guides/ridesharing (“You can ... write off any snacks or amenities
purchased for clients (e.g., water).
235

61

 to one’s area of work, counted as deductible business miles. 238 As we have noted, this is a
fairly aggressive position and it is possible that the commute miles (i.e., miles driven from
home to area of work) may not be written off, unless driving to a different metropolitan
area. 239 Other forum posters challenged him on this point but he persisted in taking this
position. 240 Interestingly, USER172/USER149 is far less specific in his description of what
miles count as business miles in his guide published on the zen99 website. 241 In addition,
his posts in the other forum were much more equivocal and less aggressive about whether
commute miles can be deducted; here, he cautioned against deducting miles from home to
area of work, and acknowledged that this is an open issue. 242
Finally, we noted that even where the advice given by USER172/USER149 was
not outright wrong, the nature of posting in an internet forum meant that his advice was
sometimes given in overly general terms and could appear ambiguous or confusing. For
example, in one case, he gave advice about deducting mileage but did not adequately
distinguish between the standard mileage and actual costs methods. We know that he was
correctly advising forum readers of the difference between the two methods in other posts,
but taken out of context, his statements in this instance could be interpreted as inaccurate.
Ultimately, we have no way of knowing whether the incidence of error and the quality of
tax advice is higher on the boards as compared to in-person peer advising or just bad tax
preparer advising.
Apart from USER172/USER149, we also counted numerous other instances on
both Reddit and Uberpeople of marketed tax advice and promotion of applications and

238
“[Y]ou can write off any business mileage, which includes driving from home to your area of work, as
well as driving around looking for passengers.”; “Since you are an independent contractor, you can write off
any business related mileage. This includes driving from your home to area of work, or driving around
waiting for passengers.”
239
See supra note 89 and accompanying text.
240
This user said in response to critiques of prior posts, “Most of those commuting rules are for employees
who travel to the same office. If they travel to a client office, they can write that off as business mileage.
Technically, since you don't have an office, every time you drive to the area is for “client” business. The IRS
hasn't specifically commented on ridesharing, so some accountants will say ‘yes it's fine’ and some will say
‘no it's not’. Most ridesharers write it off though.”
241
https://tryzen99.com/1099-tax-guides/ridesharing.
242
It is possible that this position might have evolved over time, but we cannot tell the exact dates of some
of the Reddit posts.

62

 websites designed to help with tax compliance. 243 Forum participants posted tax and
ridesharing guides, links to advising websites, and mobile applications that they were
building to help with tasks like expense or mileage tracking. These posters sometimes
requested that other participants test or fund such applications. 244 On one thread, a poster
professing to be a tax attorney offered to answer general questions, and even provided a
Circular 230 disclosure. 245
V.

ANALYSIS AND RECOMMENDATIONS: COMPLIANCE, MONEY, AND COMMUNITY IN
THE INTERNET FORUMS

The internet forums that we studied contained a treasure trove of information about
how ridesharing drivers encountered the tax system and interacted with each other online,
yielding a rich set of insights. Three notable motifs were apparent from the data: (1) forum
posters’ struggles with tax compliance issues, (2) ongoing questions about whether driving
was profitable or made economic sense (and how this analysis changed over time), and (3)
the unique nature of communication, culture, and community in the internet forums. As
this Part discusses, each of these motifs suggests a particular set of normative insights,
which may be in tension with each other.
A.

Compliance

One of the most dominant themes we observed running through the forums was
that of expense taking and its attendant difficulties. From calculating mileage to
determining which miles are deductible business miles to deciding which expenses are
deductible, the question of how and whether to properly recover expenses was a recurring
refrain. 246 Relatedly, the question of how to properly document and keep track of expenses

243

We coded 90 instances on Reddit and 86 instances on Uberpeople of “marketing posts.”
Reddit P14 (Hurdlr rideshare guide); P62 (app for freelancers), P72 (expense tracking excel file), P73
(feedback on whether to write ridesharing guide), P76 (sherpashare tax guide), P79 (feedback on starting tax
firm focused on ridesharing), P83 (marketing for Shared Economy CPA), P94 (kickstarter project for
automated trip logs app), P157 (seeking feedback on mobile expense tracking, etc. app for drivers); P255
(advertising app to combine fuel with mileage); P265 (sherpashare time/mileage/fare comparison feature
between Uber, Lyft, Sidecar).
245
USER158; IRS Circular 230, 31 C.F.R. Subtit. A. Part 10, https://www.irs.gov/pub/irsutl/Revised_Circular_230_6_-_2014.pdf.
246
See generally Part IV.A.
244

63

 was a key challenge for forum participants, as was the question of how to understand and
interpret numbers on Form 1099-K when filling out the tax return. In these questions, we
saw a good deal of confusion and disagreement regarding the proper application of tax law
to ridesharing. For example, forum participants disagreed about whether “dead miles”
could be deducted, which apps suffice for documentation purposes, and which expenses
could be deducted.
The debates we observed suggest that inaccurate expense taking may be occurring
in the ridesharing sector, a result roughly consistent with findings in existing tax
compliance literature. 247 Thus, IRS clarification in this area could be a helpful and realistic
option. As a first step, it would be relatively simple for the IRS to clarify how the existing
rules for deductibility of commuting and other miles apply by extension to ridesharing and
to clarify which internet and mobile applications are acceptable for documentation
purposes. 248 It would also be easy to issue guidance on how the Form 1099-K rules apply
to the ridesharing (and other sharing economy) platforms by clarifying, for example,
whether the Form 1099-K reporting positions taken by Uber and Lyft are correct, both with
respect to choice of form and also choice of reporting threshold. 249 Guidance targeted at
sharing economy workers has already been issued or is being considered by other
jurisdictions. 250

247

Slemrod, supra note 39; see also discussion supra Part IV.A.
App providers such as MileIQ have claimed that their GPS tracking application will be acceptable upon
audit. https://www.mileiq.com/blog/mileage-log/; see also James Alm & Jay A. Soled, The Internal Revenue
Code and Automobiles A Study of Taxpayer Noncompliance, 14 FL. TAX REV. 419 (2013) (arguing that GPS
technology could be used effectively in ensuring accuracy of automobile deductions in general).
249
See discussion infra Part I.A.2; see also Oei & Ring, supra note 4 (proposing some of the same
suggestions).
250
See,
e.g.,
Australian
Taxation
Office,
The
Sharing
Economy
and
Tax,
https://www.ato.gov.au/Business/GST/In-detail/Managing-GST-in-your-business/General-guides/Thesharing-economy-and-tax/; see also HM Government Response to Independent Review of the Sharing
Economy
(March
2015),
7-8
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/414111/bis-15-172government-response-to-the-independent-review-of-the-sharing-economy.pdf (expressing UK HMRC’s
intent to “mak[e] it easier for people participating in the sharing economy to understand their tax obligations
and report their income to HMRC”); see also Tackling the Hidden Economy: Extension of Data-Gathering
Powers
(HMRC
Consultation
Document
(July
2015),
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447718/Tackling_the_hidde
n_economy_-_Extension_of_data-gathering_powers.pdf. Denmark’s taxing authority is also looking into
how to more effectively tax the sharing economy. See http://cphpost.dk/news/business/skat-looking-into-taxchanges-for-airbnb-uber-and-other-sharing-economy-services.html.
248

64

 Assuming Uber’s Form 1099-K reporting position is correct, the IRS might also
perform driver education—or require the platforms to educate drivers—regarding the need
to deduct on their tax return Uber’s commission and other expenses from the gross income
number reported on Form 1099-K. 251 As discussed, conversations on the discussion boards
raise the possibility that some first-time Form 1099-K recipients may actually have overreported earnings on their tax returns because Uber reported gross earnings on that form,
including tolls, fees, and the Uber commission. 252 The correct approach, as noted by various
posters, is for drivers to report the gross income amounts from Form 1099-K on Schedule
C of their tax return and then total up tolls and fees (including the split rides fee, the safe
rider fee, the Uber commission, and any device subscription fee) and deduct them on
Schedule C Line 10 (Commissions and Fees). 253 But this exercise is complicated. The tolls
and fees that must be subtracted are not listed on Form 1099-K itself but must be looked
up separately on the year-end Tax Summary sent by Uber to each driver. 254 To even
discover the gross nature of the Form 1099-K numbers, drivers would have to compare two
documents—Form 1099-K and the Uber Tax Summary. While savvier posters seemed to
eventually get it right, we do not know whether less savvy ones did. Comparable grossbasis (i.e., fee and commission inclusive) reporting positions may have been or may be
taken in the future by other sharing economy platforms, with similar consequences.
Part of the unstated problem is that rideshare drivers may conceptualize themselves
as receiving “$100 dollars less 20%” at the outset from Uber, rather than perceiving
themselves as independent business owners receiving a gross payment ($100) and then
having to pay an expense (the Uber commission and fee) to earn that amount. Thus, in part
because ridesharing drivers may not see themselves as operating a small business, grossbasis information reporting may be particularly dissonant in this sector and may give rise
to tax reporting mistakes. Clarification or driver education—whether done by the IRS or
by the platforms—may help alleviate confusion.

251

This assumes that the Form 1099-K position taken by the ridesharing businesses is correct.
See supra note 140 and accompanying text.
253
See sources cited supra note 139.
254
For an example of the 2014 Uber Tax Summary, see http://ridesharedashboard.com/2015/01/30/ubertaxes-2015-tax-summary-deducting-fees/. On the Tax Summary, the Uber fee and device subscription fee are
not set out in the same column as the gross Form 1099-K amount. Uber merely states in parentheses and in
a footnote in its Tax Summary that the Uber fee was included in the gross amount.
252

65

 Content aside, there are also different methods by which the IRS might intervene,
advise, or clarify. A less invasive approach would be to issue regular publications or
statements on the IRS website. A more invasive approach might be to directly intervene on
the discussion boards by having a representative post content in the forums. A possible
middle ground would be to use social media channels, such as the IRS’s existing Twitter
and Tumblr accounts or its Facebook page, to do driver outreach. 255 As further discussed
in Part V.C, each of these methods may reverberate through internet communities in
different ways. 256
B.

Money and Profit

Another important theme was the question of whether driving was profitable and
how to evaluate profitability. Even though we had initially focused on tax-specific themes,
we saw many discussions of how various non-tax expenses, including gas, water, car
washes, costs of cleaning up vomit, and vehicle wear and tear affected profitability. Forum
posters also discussed how trends in profitability (as affected by surges, guarantees, and
changes in base rates) affected their driving decisions and expressed significant anger and
frustration at declines in profitability. They often compared the money they would make
driving with the likely hourly rate they would earn at low-wage jobs such as Walmart.
Taxes entered these discussions as a component of driving expenses, which would
reduce gross fares earned. The IRS standard mileage rate also served as a proxy for what
posters thought the expenses of driving might be, though there was disagreement about the
accuracy of this proxy. In these discussions, we saw confusion, guesstimation, and
disagreement in how to evaluate profitability and how to estimate the ultimate tax burden.
There were significant differences in how various posters estimated driving expenses,
anticipated federal and state tax burdens, and made provisions for payment of taxes (e.g.,
by setting aside money to pay taxes, or increasing withholding on W-2 income). As noted,

255

See
http://www.irs.gov/uac/IRS-New-Media-1;
http://internalrevenueservice.tumblr.com/;
https://twitter.com/irstaxpros; https://twitter.com/IRSnews; https://www.facebook.com/IRS/timeline. Social
media interventions have been suggested in other jurisdictions as well. See sources cited supra note 250.
256
See infra Part V.C.

66

 some of these behaviors could be consistent with the spotlighting and ironing hypotheses
of the salience literature. 257
Thus, although we had not explicitly sought to investigate the topic of money and
profit, this was a resoundingly pervasive theme in the forums that suggests several
normative insights. First, there is the question of whether there should be outreach or driver
education with respect to questions of profitability. The rideshare industry is one in which
many of the operating costs, and the burdens of estimating such costs, are borne by drivers.
The online conversation suggests that some of these costs (including tax costs) may not be
particularly salient to drivers at the time of their labor supply decision. If this is so, then
driver outreach might be advisable in the face of a new business model that shifts hidden
costs to drivers. Any such driver awareness or education initiatives could take different
forms. For example, the platforms might be required to disclose estimated costs of driving
to drivers. Alternatively, outreach might be conducted by government agencies to help
drivers understand the true costs of driving. Incidence and magnitude of driver costs should
also be carefully considered in the current debates over worker classification: Legislators,
courts, and regulators might consider how employee classification—which would mean
wage withholding and other non-tax benefits but also more limited ability to deduct certain
business expenses for tax purposes—might play out in an industry where the bulk of costs
would likely remain on drivers. 258
More broadly, if driver sophistication in assessing profitability were to increase,
this could affect Uber’s business model going forward. Uber’s model is predicated on
attracting a large base of drivers and passengers to the platform. If drivers change their
driving behaviors as they become more aware of expenses and tax burdens, this realization
may affect the viability of the core business model. If, however, drivers do not change their
labor supply choices over time, their continued willingness to drive may suggest that the
business model is actually profitable for them. But it may also suggest that drivers’ ability
to accurately assess profitability remains limited and that more robust driver protections
are necessary.

257

See discussion supra Part IV.A.1.
This result may vary by state. See, e.g., Cal. Labor Code § 2802 (requiring an employer to indemnify
employee job expenses).

258

67

 C.

Community

A third theme that ran through the data was the nature of communication and
culture in the online communities we studied. The tax talk contained on the discussion
boards was a messy conversation that went back and forth, was sometimes rude, pointed
and angry but was at other times supportive and communal. Forum users corrected each
other’s errors (sometimes imperfectly), gave each other advice (much accurate, some
inaccurate), expressed approval or disapproval in various ways (explicitly, as well as by
upvoting and downvoting on Reddit), argued with each other, and liberally shared
information about their tax return preparation, documentation, fudging, and other practices.
Forum posters marketing commercial interests, suspected plants, members of the press,
researchers, taxi drivers, and other interlopers interjected in these conversations, and a few
(like USER172/USER149) became recognized and familiar contributors on the boards. At
the same time, Reddit and Uberpeople are communities with porous boundaries. While
there were some repeat posters, there were many infrequent users and likely an even larger
number of lurkers. Forum posters seemed aware that there was a possibility that others
(including Uber employees, non-drivers, and the IRS) were reading the forums and, in fact,
constantly discussed and referred to the presence of these outsiders, but worries about
information being read by outsiders did not seem immensely salient. While we saw a few
subsequently deleted posts, they were a minority.
These distinctive characteristics of the internet forums raise questions about the
impacts of potential interventions in the forums or regulation of forum content. Here, there
are tensions that need to be managed: First, there clearly is a process of learning about tax
law that is taking place in the forums through conversations and advising among peers and
through correction of each other’s errors. Second, however, this learning process occurs in
fits and starts and may be muddied and interrupted by error propagation due to advice that
is confusing, poorly stated, or just wrong. Third, self-proclaimed professionals or experts,
who may be trying to grow their businesses or may be seeking status due to claimed
expertise, also give advice in these forums. Fourth, this whole messy conversation can be
read by anyone with internet access. And finally, with the exception of a few marketers
operating under their real identities, there is little likelihood of imposing ex post
consequences on posters through lawsuits or other non-legal means because of poster
68

 anonymity. While we did observe “soft” peer sanctions in the form of error correction or
telling each other off, it is unclear whether these were a sufficient consequence to
effectively discipline or regulate the conversation in terms of accuracy.
Any attempts to intervene in or regulate peer legal advising on the internet boards
would need to consider and manage these tensions. With respect to regulation of peer
advising, for example, it is possible that such regulation is not advisable because the gains
from peer learning on the forums outweigh the downside of confusion or error propagation.
Of course it is difficult to know if this is actually the case, especially once positive and
negative externalities on lurkers are considered. Another possibility is that marketers and
other professionals ought to be subject to regulation while peer advisors should not.
However, such an approach would create obvious line-drawing issues.
Outright regulation aside, other interventions or monitoring of the discussion
forums by a taxing authority would also likely have impacts that should be carefully
considered. As we suggested in Part V.A, for example, the IRS might issue guidance with
respect to tax issues concerning rideshare drivers and might disseminate such information
in online forums where drivers assemble. The IRS could also monitor the forums to obtain
information about emerging tax compliance issues, or it could intervene directly in internet
forums to correct error propagation and stake out agency positions. Each of these
approaches raises questions about what the impacts of such interventions might be on
internet communities. For example, if it became apparent that the IRS was monitoring
discussion boards to keep apprised of likely major tax compliance issues, this knowledge
might have a chilling effect on discussions and might compromise the openness of
information sharing on the boards, disrupting the peer learning process. If, instead, the IRS
was actively engaging and answering questions on internet forums (e.g., “Q&A Hour with
the IRS!”), this may encourage more open discussion, but it could also expose the IRS to
risk if advice is misinterpreted or misperceived.
Development of a full theory of government regulation of or intervention on
internet discussion boards is a project for another day. We note, for now, that there are
promising ways for taxing authorities to use information discussed online, and to intervene

69

 and do taxpayer outreach on internet forums and via social media. 259 The use of social
media for tax administration in the sharing economy is also being considered in other
countries as well. 260 In designing such outreach, a variety of formats might be explored,
with some approaches more interactive than others. For example, running a website that
allows users to pose questions and then selecting which questions to answer is an example
of a less interactive approach that might nonetheless be effective. 261 Ultimately, the issue
is one of design choice, in which potential costs, benefits, and tradeoffs would need to be
balanced.
CONCLUSION
In this Article, we investigated the tax issues and challenges faced by ridesharing
drivers by analyzing their interactions in three internet discussion forums. Our study of
user interactions in these internet forums is the first of its kind in the legal literature. It
offers a timely and nuanced picture of how the nascent encounter between ridesharing
workers and the tax regime has played out “in action” on internet discussion boards.
We presented a series of findings about the tax compliance challenges encountered
by ridesharing workers, examined the ways taxes factor into their profitability
determinations, and discussed cultural aspects of how tax advising and information
exchange operate in these internet discussion forums. Based on these findings, we made
normative recommendations for more effective tax administration, spelled out the
implications of our study for Uber’s business model and for potential regulation of
ridesharing, and discussed the potential impacts of various tax compliance initiatives on
online communities of drivers and other 1099 workers. These recommendations may be in
tension. For example, the need for taxpayer education, which may be accomplished through
online forums, raises the risk that IRS intervention in the forums may change the nature of
community and communication currently present in such forums. Therefore, any such

259

See sources cited note 255.
See sources cited supra note 250.
261
The Consumer Financial Protection Bureau runs this type of Questions and Answer service.
http://www.consumerfinance.gov/askcfpb/
260

70

 interventions would need to be carefully considered in order to arrive at the optimal policy
choice.
In addition to yielding specific insights concerning ridesharing drivers, our study
also has potentially broader application to other gig economy workers. Careful analysis of
internet forum discussions can provide much needed texture to our understanding of how
1099 workers deal with taxes and interact with the tax system and of how taxes factor into
their decision making. Thus, our analysis provides a roadmap for identifying issues that
may be important in the broader 1099 economy and may merit more in-depth research.

71

 APPENDIX: LIST OF CODES
ATTITUDES TOWARDS TAX STRATEGIES AND
COMPLIANCE
RATIONALES
Aggressive
“Beer money” vs livelihood
Carefree
Driving Techniques
Careless
Insurance
Compliant
New Year’s Eve
Indifferent
Profitability: Before and After
Noncompliant
Tax
Uninformed
Profitability: Decision to Drive
Profitability: Expenses
Profitability: Per Mile vs. Per
SUBSTANTIVE TAX ISSUES
Audit Risk
Hour
Tax Advice
Profitability: Tips
Profitability: Trends
Bad Advice
Good Advice
Regulars
Leasing
Depreciation
Documentation
Tesla
Employee or Independent
Uber Financing
Contractor
Employment Taxes
TAX POLICY ISSUES
Entities and Structuring
Administrative Burden
Estimated Taxes
Distortion
Expenses and Deductibility
Fairness and Equity
Fees
Risk Preference
Filing Obligation
Salience
Form 1099: Content and Accuracy Tax Morale
Form 1099: Different Reporting
Positions
EMOTIONS `
Form 1099: Receipt
Anger
Form 1099: Residual
Anxiety
Income Inclusion
Confusion
Interest and Penalties
Frustration
IRS Website and Publications
Happiness
Method: Standard Mileage or Other Hopelessness
Mileage
Irritation
Schedules
Relief
State Tax
Resignation
Tax Prep Software
Sarcasm/Disdain/Insulting/Rude
Tax Preparer or Advisor
Satisfaction
Tax Rates
Surprise
Third Party Apps
Sympathy or Commiseration
Water and Snacks
Trepidation
Withholding

72

THREAD STRUCTURE
Reddit
External Website
Link to External Website
Marketing Post
Plants
Question
Web Bots
Uberpeople
Disclaimers
External Website
Link to External Website
Marketing Post
Plants
Question
Web Bots
TurboTax
Duplicate Posts
External Website
Link to External Website
Form Language
Instructions
Marketing Post
Plants
Question
Unanswered Detail Request
Unanswered Question
Web Bots