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Everything You Need to Know About Uber Unemployment

Last updated: November 19, 2021
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vector graphic showing a line of people protesting outside a building for uber unemployment benefits

With the COVID-19 pandemic winding down, the economy is trying to return to normal.

However, there are still places where things are not how they were just two short years ago.

Uber drivers in some areas are still struggling to make ends meet and need help.

If you’re one of those drivers, then take a look at some information and what unemployment options there are for you.

Are Uber Drivers Eligible for Unemployment?

In normal circumstances, Uber drivers are not eligible for unemployment benefits.

As a category of independent worker called an independent contractor, Uber drivers assume the responsibilities of employment.

In other words, Uber drivers usually determine when they are or are not employed, meaning they don’t qualify for normal unemployment benefits.

However, normal circumstances haven’t really been the case for a year and a half now.

The COVID-19 pandemic caused a lot of disruption in the economy, especially with ridesharing.

To alleviate these troubles, the government stepped in to provide relief to all sorts of folks put out of work, including independent contractors like Uber drivers.

While these pandemic unemployment assistance measures stay in place, an Uber driver can claim unemployment benefits as a gig worker.

Can Uber Drivers Get EIDL Grants?

The Emergency Disaster Income Loan (EIDL) is a Small Business Administration (SBA) loan program designed to help small businesses and independent contractors during times of disaster.

In 2020, with the COVID-19 pandemic, this program was expanded to assist independent contractors such as rideshare drivers.

Access to this program would allow these drivers to receive aid outside of the regular unemployment benefits.

For most drivers, this would be a stipend of $1000.

One of the main changes with this program over the last year is the requirement to be in a low-income area.

You also have to be able to prove that your income dropped by 30% over any eight-week section of time.

While the first part might be tricky for some drivers, most rideshare drivers can find eight weeks where their income dropped 30%.

To apply for these grants, you have to go to the SBA.gov website and submit your information there.

The website has tools that will help you determine if you qualify for an EIDL grant and what you have to do to apply.

Can Uber Drivers Apply for PPP?

The Paycheck Protection Program (PPP) is a forgivable federal loan that small businesses and independent contractors can use to pay their business expenses.

This program requires that the person taking the loan prove that the money was being spent on expenses, such as payroll for employees, inventory, or other related costs.

Uber drivers can apply for a federal loan through this program.

In total, there will be two applications throughout the process.

One application will be for the loan itself, while the second will be for loan forgiveness at some point.

The federal and you get to this program is suitable for up to ten weeks of income.

You’ll submit what is called a Schedule C form to determine your income during the previous period.

This form helps determine what your maximum loan amount is.

Can Uber Drivers Apply for SBA Loans?

Maybe options available now for Uber drivers to use for employment come from legislation made during the COVID-19 pandemic.

The EIDL and PPP options the drivers have to take advantage of existing only because of the CARES Act.

In the previous year, drivers were able to apply for assistance and loans through federal governments.

Throughout 2021, funding for these programs has begun to taper off as the economy returns to something more like normal.

The Controversy Surrounding Uber and Unemployment

Over the years, there’s been a lot of conversation around Uber’s relationship with its contractors.

Ridesharing companies like Uber and Lyft have fought for years to maintain the independent contractor status for their drivers.

This status for their drivers helps reduce many overhead costs for the respective companies, a net benefit for them.

However, people have been questioning whether this status is beneficial or harmful for rideshare drivers.

In times such as the recent pandemic, the company has no legal requirement to financially help their drivers when gig work dries up.

This resulted in ridesharing companies being the most commonly cited employers for people applying for EIDL loans in 2020.

It hasn’t been perfect with the EIDL loans, though.

Many drivers during the 2020 pandemic applied for these loans, but not everybody received them due to their employment status.

It’s tough to prove that you’re not actively taking work when you’re normally an independent contractor.

Because unemployment resources need to go to those in need, federal and state agencies are hesitant to provide these benefits to people who might still be working.

Spokespeople for the raging companies came out last year to describe their programs to help their workers.

Combined, ridesharing companies last year provided millions of dollars to their drivers to help them get through the pandemic.

However, comparing that to the large sums of money that the government had to provide pales in comparison.

Ultimately, he remains to be seen if the independent contractor status for ridesharing drivers is a good thing or not.

While there are benefits to highly elective employment status, we’ve seen recently that it can cause problems when the company has little reason to support its workers.

Applying for Financial Assistance as an Uber Driver

Applying for assistance through either the EIDL or PPP is an easy process.

However, your application will go to different places, depending on which program you work through.

Here are the steps to take when applying for an EIDL grant:

  • Go to the SBA website: All EIDL grants are processed on the SBA website, which will be the portal you work with.
  • Check your qualification status: While applying for an EIDL grant, you will be asked about your area’s income, personal losses in revenue, and so forth.
  • Follow the directions on the website: Submit the information and documentation asked of you to have your loan processed as quickly as possible.

Once the application is submitted, you’ll wait for it to process.

If approved, the grant will be sent to your bank account for you to use during an emergency.

Meanwhile, the steps you have to take when applying through the PPP are different:

  • Choose a lender: The PPP works through independent lenders, so find a lender near you that is partnered with this program.
  • Fill out the application completely and honestly: Because you are the one supplying your income and expense forms, honesty is the easiest way to get what you rightfully need.
  • Bring documentation: The lender will want proof of identity and income, so bring copies of what the lender needs to process the loan application.
  • Show meticulous accounting: Having all the income data clear and concise will make it easy for the loan to be processed.

From there, the lender will process your loan application to see if you qualify for the amount you request.

Work with the lender as issues come up to have your loan handled quickly.

Getting Help: Does Uber Have an Unemployment Phone Number?

Uber does not have a phone line dedicated to unemployment since the assistance is done through outside lenders and the federal government.

Uber does have a general support line for their drivers that have questions about the process, though.

Frequently Asked Questions

Because of recent changes in its relationship with unemployment, many of Uber’s drivers have had questions over the last couple of years.

Here are some of the common questions we have found out there about Uber and unemployment:

Does Money Earned from Uber Count as Income?

You earn as an Uber driver counts as income.

As long as you make more than $400 while driving for Uber, you’ll have to report that as income to the IRS and your local state agencies.

This income is treated as normal earned income and so would be taxed appropriately.

As an independent contractor, you also have to pay a Social Security and self-employment tax.

Can I Do Uber and Still Collect Unemployment?

While collecting unemployment payments, you’re not allowed to have an earned income that goes unreported.

You can be penalized if you drive for Uber while still collecting income if the funding agency finds out.

It’s better to be honest about your unemployment claim to avoid any fines or jail time.

Does Uber Report Income to Unemployment?

Because Uber drivers are independent contractors, it is up to the drivers to report their income for taxes and unemployment.

Uber itself does not report your earnings or labor status to government agencies.

Wrapping Up

The last few years have been strange and hard for Uber and Lyft drivers.

For the first time, these rideshare drivers could apply for unemployment assistance thanks to new legislation.

However, this legislation is quickly winding down.

If you still need assistance due to the pandemic, reach out to a lender or the SBA to see if you can still qualify for help.

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