Can Lyft & Uber Drivers Receive Both Unemployment & the PPP loan?

There are a lot of government financial assistance programs available during Covid-19. Which ones can you take advantage of as an Uber driver, and is it ok to ‘double dip’ in more than one program?

Related: What Are All of The Unemployment & Loan Programs for Lyft & Uber Drivers?

It’s a question that has been asked a few times now over the past few weeks and I’ve been hearing mixed results, so I went to an expert. On a recent live stream, I spoke with Logan Allec, a CPA who is very familiar with rideshare issues. Below is a video of our conversation, and a transcript for those who prefer to read.

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Harry Campbell: I guess my question is: Can you get a PPP loan and unemployment insurance? Because at first there was no unemployment, right? Drivers and the independent contractor crew were waiting for these PUA websites to get set up. And then there’s all this buzz around the PPP loans. A lot of people are starting to get unemployment or PUA and now they’re getting their PPP loans back and saying they were either approved and they’re wondering what they should do. What have you seen there? Is there like specific guidance from the IRS or anything like that?

“Don’t Double Dip” on PUA and PPP

Logan Allec: I say you should be safe. Collect PUA you know, but then once you get that PPP money, that PPP money is supposed to be used for payroll and part of that would be to pay yourself. I think a conservative position would be, don’t really double dip there. When you’re going to do your unemployment reporting for your business, they’re gonna see that kind of disconnect.

Of course I’m speaking from like a business owner’s perspective that actually has to do that quarterly reporting. You have to submit it to your state and they’re going to notice that you have all this, you got the payroll from the PPP funds, but then you were also collecting PUA.

Will they have the protocols in place to catch that for everybody? I don’t know because there’s just such a high volume here, but I think the conservative position would be  if you got that the PUA you know, probably best to put the pause on once you get those PPP funds. Which is supposed to be used to pay pay payroll and including yourself. So that’s my take on that.

There Aren’t Clear-Cut Rules Yet. Be Conservative

Harry Campbell: Yeah. And I think that we just released a video this morning. So if you guys are wondering what the hell PPP is, maybe you’ve been living under a rock for the past few months or not watching the channel. We’ve been covering it extensively. But I think the thing a lot of times, you know, I think I really liked your explanation Logan, because there isn’t clear cut rules for a lot of these situations and a lot of these programs because they’re so new and they’re changing so quickly. And so I think you have to just think about it logically and understand what the potential risk is.

What is the PPP loan for?

It’s to cover your payroll for two and a half months. So if you’re getting unemployment insurance and you’re now applying for a PPP loan to also cover your payroll, it seems like you’re sort of double dipping, right? So if you did that and got caught and got in trouble, you probably shouldn’t be shocked. You know, I don’t know your guests as good as mine.

Andrew here from YouTube, he says, I really don’t have faith in the EDD and they already asked my income and they now have it, it’ll conflict with PUA and maybe screw that over or not. We’ll see. Right. And so I think that’s kind of like summing up the fact that you know, like we don’t really know.

Trust Information from Official Sources

Like these guys are definitely overwhelmed and it’s going to be a state by state issue. Unemployment insurance is a state by state thing and they were told that they could do PPP and unemployment insurance. So I think that if you want to be safe, probably don’t double dip. But if you get confirmation from some official source and especially if you have it in writing, then it’s probably a go.

Logan Allec: Yeah. That, that usually tends to be the case. Although I have found that when you call people on the phone, whether it’s the IRS or state agencies sometimes they do say things or even email things that if it’s in conflict with some other official guidance, the state or the IRS would say that what they said is to be taken as less authority than the official guidance. But generally if you have an email or something like that it can, it can really help your case. Some states are more aggressive than others.

What’s a Good Bank for Applying for PPP?

Logan Allec: There’s a lot of those fintechs, you know, there’s like I personally used Cabbage. I submitted my application, in the evening time and the next morning I got the email that it was approved. So recently or, yeah, it was recently. So for the PPP,  a lot of people thought that the money’s running dry, but don’t be discouraged if you haven’t applied yet.

Harry Campbell: On last week’s YouTube live with Jay, one of my senior contributors, we talked about Lendio, he applied through Lendio and hasn’t gotten his PPP loan yet, but they do seem to be quickly processing. And I did kind of make a joke that I hope that they reach out to me and sponsor the video. I think I tweeted them nothing yet, but I’m hoping that maybe they can come back to me. So Lendio is definitely a good option.

Have you heard of many? You know, so I got PPP loan as my business, you know, sort of my ride share business, my media business. I applied because I’m technically an LLC as S corp. Most drivers are typically sole proprietors. Have you found that many people applying for a PPP loan as a sole proprietor are getting it? Because I only in the past week I’ve only heard of one or two drivers in that situation actually getting the PPP loan.

Logan Allec: I mean it definitely is trickier for that sole proprietor, independent contractor crowd because they have to submit their schedule C. But from a lending perspective, they’d rather just have the W3, the 940, you know, actual W2 wages. It seems a lot more streamlined for businesses that have a separate legal entity, a separate tax structure. It seems to be a lot more streamlined for them than for the independent contractor crowd.

I’m seeing folks independent contractors who applied awhile ago still have gotten kinda gotten crickets. It means that for those that have that structure set up it’s just an easier underwriting process, I imagine from the lender’s perspective.

Thanks for watching and reading! I hope that clears some things up about ‘double dipping’ with these recent programs.

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