Uber and DoorDash Push for Tax-Free Tips for Drivers

Gig Economy Workers Seek Inclusion in Republican Tax Proposal

As Republicans move forward with President Trump’s pledge to eliminate taxes on tips, gig economy giants Uber and DoorDash are lobbying lawmakers to ensure their drivers also benefit from the tax break.

While restaurant servers and casino dealers—who typically receive W-2s—stand to gain under the proposed legislation, most Uber and DoorDash drivers are classified as independent contractors and receive 1099s, making them ineligible for the tax exemption as currently drafted.

The Economics of Tipped Workers

For many gig workers, tips make up a substantial portion of their income, often exceeding the percentage earned by restaurant employees:

• Food delivery drivers: 53.4% of earnings come from tips (Gridwise)
• Ride-hailing drivers: ~10% of earnings come from gratuities (Gridwise)
• Restaurant workers: 23% of income from tips (Square)
• Casino dealers: ~60% of pay comes from tips (Payscale)

Critics argue that the tax break disproportionately benefits tipped employees while excluding low-income workers who don’t receive tips at all. However, the Trump administration has floated additional tax relief measures, including eliminating taxes on overtime pay, as part of a broader tax package under discussion.

Funding the Tax Cut: A Shift for Top Earners?

To offset lost tax revenue, the administration is considering raising tax rates on the highest earners in the U.S. Axios reports that Trump’s team is discussing restoring the top income tax rate to 39.6% (up from 37%), along with lowering the income threshold from:

• $609,351 to $500,000 for individuals
• $731,201 to $600,000 for couples

With ongoing debate in Congress, Uber, DoorDash, and other gig economy stakeholders are pushing to ensure that their drivers—who increasingly rely on tips—aren’t left out of the tax relief package.

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