A single number — 67 cents — has become the flashpoint in a growing political battle over how the federal government treats the millions of Americans who drive for Uber, Lyft, DoorDash, and other gig platforms. That’s the current IRS standard mileage rate for 2024, and a bipartisan chorus of lawmakers, driver advocates, and tax policy experts say it’s woefully inadequate for workers who burn through tires, transmissions, and brake pads as the core function of their livelihood.
The push to raise the mileage deduction gained significant momentum when Senator Ron Wyden, the Oregon Democrat who serves as ranking member of the Senate Finance Committee, formally urged the IRS to increase the standard mileage rate for gig economy drivers, as Business Insider reported. Wyden’s argument is straightforward: the current rate, which the IRS recalculates annually based on a study of fixed and variable automobile operating costs, doesn’t adequately capture the real-world expenses borne by drivers who put 30,000, 40,000, or even 50,000 miles a year on their personal vehicles.
And that gap matters enormously. For a full-time rideshare driver logging 40,000 miles annually, even a few cents per mile translates into hundreds or thousands of dollars in tax relief — or the absence of it.
The IRS mileage rate isn’t some obscure regulatory detail. It’s the primary mechanism through which independent contractors — which is how gig platforms classify virtually all their drivers — offset the massive vehicle costs that come with the job. Unlike W-2 employees who might use a company car or receive a vehicle stipend, gig drivers are on their own. They buy the car. They pay for gas, insurance, oil changes, new tires. They absorb the depreciation that comes from relentless daily use. The mileage deduction is supposed to make them whole, or at least close to it.
But critics say the formula the IRS uses to calculate the rate hasn’t kept pace with reality, particularly for high-mileage commercial use. The rate is derived from data compiled by Motus, a vehicle reimbursement company that conducts an annual study for the IRS. That study examines fuel costs, insurance premiums, depreciation schedules, and maintenance expenses for a composite vehicle driven under average conditions. The problem, according to Wyden and allied advocates, is that gig drivers don’t operate under average conditions. Not even close.
A typical American drives roughly 13,500 miles per year. A full-time Uber or Lyft driver can triple or quadruple that figure. At that volume, maintenance costs don’t scale linearly — they accelerate. Tires wear out faster. Transmissions fail sooner. Depreciation curves steepen dramatically once a vehicle crosses 100,000 miles. The IRS rate, critics argue, is calibrated for someone commuting to an office, not someone whose car is effectively a taxi running twelve hours a day.
Wyden’s intervention comes at a politically opportune moment. The gig economy workforce has ballooned over the past decade, with estimates from the Bureau of Labor Statistics and private researchers suggesting that somewhere between 9 and 16 million Americans now earn income through platform-based work, depending on how you define the category. Many of them are part-time, supplementing a primary income. But a substantial and growing minority — perhaps 3 to 4 million people — depend on gig driving as their main source of earnings.
These full-time drivers are the ones most exposed to the mileage rate shortfall.
The economics of gig driving have always been contentious. Uber and Lyft have long faced criticism that their pay structures, once vehicle expenses are factored in, leave many drivers earning below minimum wage. A widely cited 2018 study from the MIT Center for Energy and Environmental Policy Research initially found that the median Uber driver earned just $3.37 per hour after expenses, though the methodology was later disputed and revised upward. Regardless of the exact figure, there’s broad agreement among labor economists that vehicle costs consume a staggering share of gross gig driving income — often 30 to 50 percent or more.
The mileage deduction is supposed to alleviate that burden at tax time. Here’s how it works in practice: a driver who earns $60,000 in gross fares and drives 35,000 business miles can deduct $23,450 at the current 67-cent rate, reducing taxable income to $36,550. If the rate were increased to, say, 75 cents — a figure some advocates have floated — that same driver would deduct $26,250, knocking taxable income down to $33,750. The difference in federal tax liability could easily exceed $500 to $700, a meaningful sum for workers in this income bracket.
But the IRS doesn’t set the mileage rate based on political pressure. The agency has historically treated the rate as a technical calculation, not a policy tool. That distinction is central to the current debate. Wyden and his allies are essentially asking the IRS to reconsider the inputs and assumptions underlying its formula — specifically, to weight the data more heavily toward high-mileage commercial use cases rather than the blended average that currently drives the number.
The IRS has been cautious. The agency raised the rate from 65.5 cents in 2023 to 67 cents in 2024, a modest bump that largely reflected higher fuel and insurance costs. For 2025, the rate ticked up to 70 cents per mile, a more substantial increase that acknowledged persistent inflationary pressures on vehicle ownership. But advocates say even 70 cents doesn’t close the gap for heavy-use drivers.
There’s a deeper structural issue at play. The standard mileage rate is a simplification — a one-size-fits-all number designed to spare taxpayers the hassle of tracking every individual expense. Drivers can alternatively choose the “actual expense method,” which involves documenting every receipt for gas, repairs, insurance, and depreciation and deducting the business-use percentage. In theory, this method can yield a larger deduction for high-mileage drivers. In practice, very few gig workers use it. The recordkeeping burden is enormous, and most gig drivers lack the accounting sophistication or professional tax help to pull it off correctly.
So the standard rate becomes the de facto ceiling on what most drivers can deduct. And if that ceiling is too low, millions of workers are effectively overtaxed relative to their true net income.
The political dynamics around this issue are unusually bipartisan. Gig drivers span the demographic and geographic spectrum. They’re in red states and blue states, rural areas and dense cities. Republican lawmakers have shown interest in reducing tax burdens on independent contractors as a matter of principle, while Democrats like Wyden frame the issue through the lens of worker protection and income inequality. That overlap creates a rare opening for legislative or administrative action.
The gig companies themselves have been conspicuously quiet on the mileage rate question. Uber, Lyft, and DoorDash have generally avoided taking public positions on driver tax deductions, preferring to focus their lobbying efforts on preserving the independent contractor classification that underpins their business models. A higher mileage rate would benefit drivers without directly costing the platforms anything — the deduction reduces the driver’s tax bill, not the company’s. But the companies may be wary of drawing attention to the high vehicle costs their drivers bear, a data point that labor organizers have long used to argue for reclassifying drivers as employees entitled to expense reimbursement.
That classification fight, of course, remains the elephant in the room. California’s Proposition 22, passed in 2020, created a hybrid model that preserved independent contractor status for gig drivers while mandating certain minimum earnings guarantees and expense stipends. The law survived a legal challenge and remains in effect, though its long-term impact on driver earnings is still debated. Similar legislative battles are playing out in other states, and the federal Department of Labor under the Biden administration issued a rule in 2024 making it harder for companies to classify workers as independent contractors — a rule that the gig platforms fiercely opposed.
Against that backdrop, the mileage rate debate can seem almost quaint. It’s a tweak to a tax formula, not a fundamental restructuring of the labor relationship. But for millions of drivers filing taxes each April, it’s one of the most tangible and immediate levers available.
Driver advocacy groups have been pressing the issue with increasing urgency. Organizations like Rideshare Drivers United and the Independent Drivers Guild have surveyed their members and compiled data showing that actual per-mile costs for full-time drivers regularly exceed the IRS rate by 10 to 20 cents. These costs include not just routine maintenance but also the accelerated need for major repairs — engine work, suspension replacement, transmission rebuilds — that come with extreme mileage accumulation. A driver putting 50,000 miles a year on a mid-range sedan can expect to face a major mechanical expense every 18 to 24 months, a cost pattern that the IRS formula doesn’t fully account for.
There’s also the insurance question. Standard personal auto insurance policies typically don’t cover commercial rideshare activity. Drivers must either purchase a commercial policy or a rideshare endorsement, both of which cost significantly more than basic personal coverage. The IRS mileage rate is supposed to incorporate insurance costs, but the Motus study uses average insurance premiums that may not reflect the higher rates gig drivers actually pay.
Some tax policy analysts have proposed a tiered mileage rate — a higher per-mile deduction for drivers who exceed a certain annual mileage threshold, recognizing that costs per mile increase with heavy use. This approach would more accurately match the deduction to actual expenses without requiring the burdensome recordkeeping of the actual expense method. But implementing a tiered rate would add complexity to the tax code, something the IRS — already stretched thin by budget constraints and a massive technology modernization effort — may be reluctant to take on.
The timing of Wyden’s push also intersects with broader fiscal debates in Washington. Congressional Republicans are working on a large tax package that could include extensions of provisions from the 2017 Tax Cuts and Jobs Act, and some members have signaled openness to addressing gig worker tax issues as part of that effort. Whether the mileage rate specifically gets folded into any legislation remains to be seen, but the conversation is happening at a level of seriousness that wasn’t present even two years ago.
Meanwhile, drivers keep driving. And paying. A full-time Uber driver in Houston, Dallas, or Atlanta — cities with long distances and heavy traffic — might spend $800 to $1,200 a month on fuel alone. Add insurance, maintenance, and the invisible but relentless cost of depreciation, and the monthly expense of operating a rideshare vehicle can easily reach $2,000 or more. Against gross earnings that might average $4,000 to $5,000 a month before expenses, the margins are razor-thin.
That’s the math that makes the mileage rate matter. Not as an abstraction. As grocery money.
The IRS typically announces the following year’s mileage rate in December or early January. If Wyden’s pressure campaign — and the growing bipartisan interest in gig worker tax relief — produces results, drivers could see a more meaningful increase for 2026. But even optimistic observers caution that the IRS moves slowly on rate methodology changes, and any significant departure from the current formula would likely require months of internal review and public comment.
For now, the 67-cent question remains open. And for millions of Americans whose cars are their offices, their tools, and their livelihoods, the answer carries real weight.
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