The mileage deduction is, by a wide margin, the largest tax break available to rideshare and delivery drivers. Done correctly, it can erase most or all of the income tax on your driving — though not the self-employment tax. Done sloppily, it's the line item that gets audited.
Standard mileage rate vs. actual expenses
You have two methods and you have to pick one per vehicle, per year. Switching back and forth from year to year is allowed only if you use the standard rate the first year you drive the vehicle for business.
Standard mileage rate: A flat per-mile amount that covers gas, depreciation, maintenance, insurance — everything. For 2026 it's projected at around 70 cents per mile for business use (the IRS adjusts annually). 10,000 deductible miles = $7,000 deduction.
Actual expenses: You add up every gas receipt, oil change, repair bill, insurance premium, registration fee, depreciation schedule, car wash, lease payment. Then you multiply that total by the percentage of total miles that were business miles. Bigger paperwork burden, sometimes bigger deduction.
For most rideshare drivers in newer fuel-efficient cars, standard mileage wins. For drivers in older, expensive-to-maintain SUVs or luxury cars, actual expenses can win. Run the numbers both ways the first year.
What counts as a deductible mile
The IRS classifies driving miles into three buckets for rideshare:
- P1 / Online, no passenger — you have the app on, you're waiting or driving toward a request. Deductible.
- P2 / En route to pickup — you've accepted a ride and are driving to the rider. Deductible.
- P3 / On trip — passenger in car. Deductible.
What's not deductible: driving from home to your "first" online-period of the day, or from your last passenger drop-off home, if you treat your house as your principal place of business and you have no other office. The commuting rule is murky for rideshare; the safe stance most CPAs take is that miles between rides count, miles from home to the start of your shift do not.
App-reported miles from Uber and Lyft only include P3 (on-trip) miles. They're missing 30–50% of your actually-deductible miles. Track your own.
What records you have to keep
The IRS standard is "contemporaneous" — kept at the time, not reconstructed from memory in April. The required information:
- Date
- Starting and ending odometer (or total miles for the trip)
- Business purpose
- Destination
In practice, a daily log with start/end odometer and platform (Uber/Lyft/DoorDash) is enough. An app like NeighCheck that timestamps each shift and lets you enter start and end odometer per shift satisfies the standard.
You also need to record your total miles driven for the year, business and personal combined. That number goes on Schedule C, Part IV.
What people get wrong
Three mistakes that show up over and over:
Double-dipping. If you take standard mileage, you cannot also deduct gas, oil, repairs, or depreciation separately. Standard mileage already covers them. You can still deduct tolls and parking on top.
Reporting only the app's mileage. Uber's tax summary shows P3 miles. Your actual deductible total includes P1 and P2 — usually a significant chunk more. Tracking your own log is the only way to capture it.
Going from W-2 commute miles to "deductible." If you drive to a W-2 job, those miles are never deductible. Only your rideshare miles count.
A worked example
You drove 14,000 business miles for Uber and Lyft in 2026. Standard mileage at 70 cents = $9,800 deduction. That number goes on Schedule C, line 9.
If your gross rideshare income was $32,000, your deductible expenses including mileage were $11,500 (mileage + phone + tolls + supplies), your net self-employment income is $20,500. That's the number you owe both income tax and 15.3% SE tax on.