Uber drivers are independent contractors, which means higher taxes. Income tax, plus the 15.3% self-employment tax, plus any relevant state and local taxes, add up to roughly 25-35% of self-employment income going to the IRS.

That means every bit you can save in tax deductions counts. (Deductions lower your taxable income, and business expenses are deductible.)

And for Uber drivers, mileage is by far the biggest expense. Tracking every business drive can net you thousands of dollars in tax savings, depending on how much you drive.

Which drives are considered business for Uber

Only drives that are related to business activity with Uber can be deducted. These can include:

Driving to a passenger's location
Driving a passenger to their destination
Travelling to a vehicle inspection, if required by Uber
Supply runs for your Uber or other rideshare work (to purchase water bottles, air fresheners, etc)
Trips to car washes or a mechanic, if you only use the car for Uber

Some drives can't count toward your tax deductions. Make sure you keep them out of your mileage log:

Drives you can't deduct

First and last drive of the work day: The drive from home to your first pick-up and from your last pick up to home are considered commute drives.
The IRS considers these a personal expense, so you can't deduct them.
Personal errands: Trips in between Uber work (e.g. picking up groceries or getting your child from school to home), as well as other personal drives can't be deducted.

Any drive that's not directly related to your rideshare business is likely not deductible.

How to track work mileage

There are two ways to track your business mileage for the IRS. You'll need to use one or the other to fill out your Schedule C form.

Standard mileage method

The standard method is straightforward and likely the easiest for most Uber drivers. All you need to do is track business mileage for the year.

When you're ready to file taxes, multiply the number of business miles by the government mileage rate (70 cents for 2025) to calculate your deduction amount.

Actual expenses method

To use the actual expenses method you'll need to track mileage, plus other vehicle-related expenses for the year (fuel, maintenance, repairs, insurance). Then figure out the business use percentage and multiply your expenses by it to get a deduction number.

If you decide on the actual expenses method in your first year of reporting expenses, you'll have to keep using it for that specific vehicle without being able to switch. So choose carefully!

If you drive for Uber in your own car, figuring out business use percentage can be difficult, which is why many Uber drivers end up using the standard mileage method.

Mileage rules for Uber drivers

To get the maximum deduction you can, follow these best practices:

Stick to one mileage tracking method for each vehicle
Record drives as they happen
Note down dates, addresses, location names, and total mileage for each drive
Stay consistent, don't record drives one week and then forget
Keep personal drives out of business mileage records

If this is starting to sound like a lot of additional work, you're right. That's why a lot of Uber drivers end up using a separate mileage tracking app which logs their drives automatically.

Other expenses Uber drivers can deduct

You can deduct these expenses no matter which mileage tracking method you use (standard or actual expenses). The IRS considers them a separate deductible expense.

Parking fees incurred while waiting for passengers
Tolls paid while driving for Uber

If you happen to track drives with MileIQ, you're able to add these expenses in the app. They will show up in your mileage report at the end of the year, making filing super easy.

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