Fintech start-up Rideshare Tax was launched by two CPA Australia members, and offers a simplified tax management process and paid accounting services for rideshare drivers.
At a glance
- The two CPAs who founded Rideshare Tax discovered that many rideshare drivers lose thousands of dollars in tax deductions. They created a platform that eases the tax process.
- The Rideshare Tax app is free, and enables drivers to download a BAS, enter expenses and lodge their tax, or have it lodged by a Rideshare accountant for A$49.
- Contract workers looking to access benefits of the government’s package during the COVID-19 pandemic need to lodge their annual BAS to claim entitlements.
By Jessica Mudditt
Back in 2015, Selda Kaplan ASA had a chance encounter with an Uber driver that changed the course of her career.
“My driver was telling me what a headache his tax situation was because the ATO [Australian Taxation Office] was about to make it compulsory for him to register for GST. He didn’t know how to do his tax, and resented having to pay a lot of money to an accountant to do it for him.”
This got Kaplan thinking. She contacted an old RMIT University friend, Michael Kambouridis CPA, and the pair researched the rideshare industry with a view to creating a cost-effective app that would simplify the tax process.
Paying GST and lodging a quarterly business activity statement (BAS) is compulsory for both taxi and rideshare drivers, regardless of their income. This prevents confusion among passengers who claim journeys as a business expense. However, many drivers don’t understand their obligations, and lack the mindset of a business owner.
Some end up losing thousands of dollars in rideshare tax deductions.
“Many drivers don’t know how to do their own tax, but they also don’t want to hand over a shoe box full of receipts to an accountant and pay hundreds of dollars. This is especially true if they’re driving to earn a little bit of extra cash,” Kaplan explains.
While the need for a solution was clear, the pair hit a bump in the road when it came to creating the first app of its kind in Australia.
“We had a bit of a nightmare situation when we went with the wrong developer. He wasn’t capable of completing the product, and a three-month agreement dragged out for over 12 months. We continued to pay him, so we incurred a significant loss,” Kambouridis says.
Another developer was able to launch the product, but problems persisted, he adds.
“A third developer with knowledge of the rideshare industry looked at the app and basically said, ‘This thing’s a piece of junk’. We were about to drop another decent chunk of money on it, but instead he built a new one for not much more than the cost of repairing and upgrading the old one.”
The second version of the Rideshare Tax app went to market in August 2019, and since then it has gained 3000 active users in every state, with the highest concentration in Melbourne, Sydney, Brisbane and Perth. Despite not investing large sums on marketing, the Rideshare Tax app has been downloaded a total of 4000 times on iOS and Android devices. To date, more than 200 tax returns and 450 BAS have been lodged by Rideshare Tax, with more to follow at the end of this financial year.
How does it work?
The app is free and, when tax time comes around, drivers have two options: to download a BAS, enter their expenses and lodge their tax themselves, or have a Rideshare accountant lodge it for A$49.
The app has been integrated with Uber, and there are plans to partner with other rideshare companies in the near future.
Kambouridis took up Uber driving for two months to get a feel for how well the app integrated with Uber’s platform. He keeps his knowledge up to date by driving sporadically.
“It means that I relate to drivers much better and can answer their questions from direct experience, rather than giving them a textbook answer.”
The app itself may be free, but Kaplan says there are multiple revenue streams to capitalise on. There are of course the tax returns and BAS, and the opportunity to network with other companies regarding advertising space, for example. Investment crowdfunding will begin this year.
However, the entrepreneurs say that the biggest thrill is being in the driver’s seat of their own company and watching it grow.
One piece of advice
“Make sure that your cash flow is sorted and that you have a buffer in place. We went through a troubled period, and if we didn’t have the back-up support ready to go, things would have been difficult. Don’t be reactive with your finances – be proactive.” Selda Kaplan ASA
“A lot of people have ideas that they never execute because they’re afraid to fail. Don’t be afraid. You can test the waters without betting the house. Execution is the name of the game.” Michael Kambouridis CPA
3 easy app makers you can start on today