Why Food Delivery Services Might Be Your Perfect Side Hustle
A huge number of us now work a side hustle on top of another job; it's one of the sad repercussions of the cost of living crisis; we just don't earn enough money to be able to pay all the bills from the main or day job, so need extra income! Working for a company like Uber Eats, Deliveroo, or Amazon Prime and delivering food orders or parcels could be a great side hustle idea for someone looking for some extra revenue. Not only does it offer a flexible schedule, but it also provides a range of benefits that can help you earn more money in your spare time.
At busy times it's realistic that you could earn £15 to £20 an hour of additional income as a food delivery driver and about £14 to £15 an hour working for Amazon. Amazon has set amounts you'll be paid per hour or part hour; food delivery drivers will earn for each delivery made. If it's quiet, then you'll not earn a lot, sometimes anything at all; at busy times, you can earn a decent amount without taking into account any tips you might earn (sadly, tips are pretty rare these days!), its a case of taking the good with the bad!
Here are some of the top benefits of working for a food delivery company in the UK:
One of the biggest advantages of working for a food delivery company is the flexibility it offers. You can choose when you want to work and how many deliveries you want to complete each day. You can be your own boss and work your own schedule in your local area, delivering for local restaurants. This makes it an ideal side hustle for those who have other commitments, such as a full-time job or studying, and so don't have much time for side jobs. Most food delivery companies operate from early morning until late at night, so it gives lots of options of when you could work, although it won't always be busy at 6 am or 11 pm, so it may not be that profitable, but it can be, but it the high demand times such as evenings and weekends that you can make good money. You'll often find that during busy times, the delivery companies will offer you a trip supplement, which is a bonus for working when it's busy, and that can make working at less sociable times more of a lucrative side hustle!
High Earning Potential
Another great benefit of working for a food delivery company is the high earning potential. Depending on the company you work for and the number of deliveries you make, you can earn £15 - £20 per hour. Plus, some companies offer bonuses and incentives for completing a certain number of deliveries in a set period of time. Now this doesn't mean you'll always be able to earn that sort of money; this type of work is hard to earn a regular wage from as it's totally dependent on when and where you work! You'll likely not be busy at 6 am on a Sunday morning, so you may be sitting around doing nothing for ages, whereas at 7 pm on a Saturday night, you're likely to be a busy bee! The money will even out if you are flexible and able to work at busier times; however, it has to be said that now most food delivery apps also deliver groceries as well as takeaways, and customers are likely to order groceries at different times to a pizza, there's an increasing chance you could go out in the morning and keep busy all day, it's unpredictable but still a great option for making some extra cash!
Easy to Get Started
Getting started as a food delivery driver is quick and easy. All you need is a car or a bike, a smartphone, and the relevant documents (driving license, insurance, etc.). You can sign up online and start working within a few days. You will need to apply and have a background check performed on you, such as your right to work in the UK.
Before you get started, it's essential to be aware of the legal requirements and insurance considerations involved.
Reporting Earnings to HMRC
If you earn over £1,000 from your food delivery work, you'll need to report your earnings to HMRC (Her Majesty's Revenue and Customs) and pay tax on your income. This is true whether you're working as a self-employed contractor or an employee of the delivery company. If you earn less than £1,000, you don't need to do this, but if you are claiming Universal Credit, you will need to report your earnings (minus costs), which may affect your payments from UC. If you earn over £1,000, you must register as self-employed. This is the total earnings from any side hustle combined. Once you register as self-employed, you'll need to submit self-assessments to HMRC and will need to pay any tax. The benefit is that you can also claim any expenses from your work, which will decrease your tax figure, plus you can also claim 45p a mile expenses for your travel while working. As a delivery driver, you'll likely be racking up those miles, so that deduction will really start to add up! Note that you can't claim for fuel and your business miles; it's one or the other, as the 45p is designed to cover your fuel costs and any wear and tear on your vehicle. You work as an independent contractor while working in these food delivery jobs, in fact, most gig economy roles, and like all the best side hustles, there's always a slight negative, and in this case, being your own boss means that you don't get any additional benefits such as paid holiday or sick pay; they won't pay for your fuel, and you have to supply your own vehicles, and if your car breaks down, you're on your own! So it's a good idea to keep some of your money back to cover any breakdowns or illness etc; have an emergency fund so unexpected issues can be less of a financial burden! You'll be doing a fair few miles, and the more miles you do and the more stops you make, the harder it will be on your vehicle, so you are more likely to have a breakdown, especially on older vehicles. Also worth remembering is that just because you are a food delivery driver, it doesn't mean you don't have to adhere to parking regulations! Sticking a note in the front of your car saying Uber Eats driver, back soon, isn't going to get you out of a parking fine when you've parked on double yellow lines; you have to pay that fine out of your own pocket, and that's additional money out of your earnings you won't want to lose! You do often get some perks from the companies, such as discounts at certain retailers, sometimes discounted fuel via a fuel card, and maybe free drinks from certain restaurants, but on the whole, your side gig is your responsibility. The main difference is you'll not get the same benefits as you would working for a company with a contract and access to at least the minimum wage and all the benefits of being an employee, but being your own boss and earning as much money as you want, by investing your free time can be a great thing. Insurance Considerations
The REALLY important consideration when working for a food delivery company is insurance. Your standard car insurance policy will not cover you for delivering goods, so you'll need to get a special type of insurance called "hire and reward" insurance. This protects you for using your vehicle for commercial purposes, including food delivery.
There are two types of hire and reward insurance: standalone and top-up. Standalone insurance is a separate policy that covers you for commercial use, while top-up insurance supplements your existing policy to cover you for delivery work. However, not all insurance companies allow top-up insurance, so you'll need to check with your provider before signing up for food delivery work; more on this in a minute.
Standalone insurance is super expensive! You'll be looking at £2k or £3k a year for this, which is clearly not financially viable for someone only working a few hours a week! These sorts of rates are more for the full-time delivery driver of parcels or food. You'll also need to check with an insurance company that you'll be able to deliver food with their policy, many are dedicated parcel delivery policies, and you'll need to change to a different policy that will allow food delivery. You may need to get a special combined policy if you want to deliver both parcels and food.
Top Up Insurance is what most food delivery drivers will be using. This requires you to have a normal vehicle insurance policy already. The top-up insurance will be an addition to this to allow you to deliver food (or parcels) legally.
Most insurance companies don't offer top-up insurance policies to their customers, so you'll need to go to specific companies for the extra insurance.
These companies will charge you hourly for a top-up, hire-and-reward insurance policy. This hourly rate is only charged while you are actually working as a delivery driver, and you won't be charged whilst driving normally/not working.
The charges will vary depending on your vehicle and your driving record. If you have a regular car and a clean driving record, you'll generally pay between 65p and 90p per hour whilst working. If you have a super duper car and not the best driving history, you'll likely pay more, just like any other car insurance policy!
How does it know when you are working? The insurance company will have an app to download. When you download the app, this will talk to the food delivery app you use to make your deliveries. Once you go on duty delivering, the insurance app knows this and will start your cover, and will finish your cover when you stop delivering, which is pretty simple.
The apps are generally pay-as-you-go. You'll top up your insurance app, and once you get to a minimum level, usually around £5, the app will top you up using your debit card so you won't run out of credit. You can set up how much you want to top up by, but it's normally a £20 minimum.
Now this is super important - You MUST speak to your normal insurance company before signing up to ensure they will allow you to use top-up insurance on top of your policy. There are a lot of insurance companies that will not allow you to use your vehicle as a food delivery driver and won't allow top-up insurance on top of your insurance. If you still deliver and have an accident, and your insurance company finds out you were delivering at the time, they'll invalidate your insurance. As you still need to have had normal insurance as well as your top-up insurance, you'll be classed as driving without insurance, which is illegal, of course, and you'll likely be prosecuted plus be liable for any damage to your vehicle and any other vehicle involved, plus you will likely have any new insurance application refused, or if you are offered insurance it will probably be costly.
So the moral of the story is to check with your insurance company before you do anything!!
Most food delivery companies work with top-up insurance companies directly, including Just Eat, Deliveroo and UberEats, and they usually recommend Zego as an insurance company.
Setting up with Zego is pretty straightforward; you can sign up online, and it's a fast and easy process. They are a monstrous pain in the bum to get a hold of, though; the online chat is never available, and getting holding of someone on the phone can take hours, but it's super rare you'll ever need to speak to them, normally only if you want to cancel a service or change something on your insurance, and so they're still your best option! If you use this LINK to download the Zego app, you'll get £10 of free insurance.
Working for Amazon is slightly different. Amazon Flex, which is Amazon's programme for people to earn money delivering parcels or food via Amazon Prime or Amazon Fresh, used to offer free insurance for its drivers. It always hinted that they would eventually stop this, and you'll have to get your own insurance. This came to be in later 2022, and now you'll need to pay for insurance to deliver with Amazon.
Amazon partnered up with Inshur to offer pay-as-you-go top-up insurance at similar prices to food delivery insurance prices. The service works in the same way, with users needing to top up insurance credit as required. Again you must check with your normal car insurer to ensure they will accept top-up insurance.
If you have a van with over 5 seats, you won't be able to get top-up insurance, and if you want to deliver for Amazon, you'll have to get the expensive standalone hire and reward insurance. They'll generally accept cars with up to 9 seats, though, which is a bit unfair on van drivers, but that's their policy, and they're sticking to it!
Amazon increased their pay rates when the new insurance policy came into force, and the increased rates normally cover what you have had to pay for your insurance, so you're not really paying for the insurance as such, but you do still have to organise it yourself.
The most Five important tips I can offer as a food delivery driver are:
1. Buy a torch so you can find addresses at night! 2. If you can't see a house number, look for a bin; randomly, more people put a house number on their bin than they do on their door!
3. Petrol stations with Waitrose store inside will always have a toilet you can use! 4. On any similar subject, don't drink loads when working; you'll never find a loo when you need one urgently! 5. Make sure you have a decent phone charger; the delivery apps can kill your phone battery, especially the Sat Nav!
Working for a food delivery company like Uber Eats, Deliveroo, or Amazon Prime can be a great way to make extra money on the side. It offers a flexible schedule, high earning potential, and easy entry requirements. However, before you start, it's essential to know the legal and insurance requirements involved. With the proper precautions in place, food delivery work can be a rewarding and profitable side hustle in the UK.