Start an LLC for Grubhub Delivery: Protect Personal Assets and Make Extra Money
Find out how to protect your earnings while driving for Grubhub
Grubhub is a well-known food delivery company that contracts with bicyclers and drivers to deliver restaurant food fast. The delivery giant is reported to pay well and drivers are cashing in. So how can you protect yourself in the event of a lawsuit? Yes, Grubhub drivers can be sued. But you can start an LLC for Grubhub to protect your personal assets.
Drivers who deliver without a registered business are personally liable if they’re sued and found to be at fault for the claim. You can drive without a business, but you run the risk of losing all your hard-earned money to a legal dispute. The only way to protect yourself is to start a Limited Liability Company (LLC) or Corporation.
In general, LLCs cost less in taxation and are easier to manage than Corporations. You can drive and get paid as a business with Grubhub, and it’s the only way to separate personal assets from your business. Already driving for Grubhub? No problem. You can still start a business and update your account details once your company is formed. This guide covers how to start an LLC for Grubhub and start making money without risking your nest egg. Read on for stats, tips, and help to start your Grubhub business today.
Delivery Industry Stats
Grubhub held onto a little less than 20% of the delivery industry market share, behind DoorDash and Uber Eats. But Grubhub drivers, called partners, report making good money in their local areas, and there’s no shortage of delivery orders. Even with a smaller market share, Grubhub has continued to grow its revenues since the company went public in 2020.
Delivering for Grubhub as a Sole Proprietor
Do you have to form a company to deliver for Grubhub? The answer is no. All it takes to start driving is a driver’s license, a qualifying vehicle or bicycle, and insurance to sign up. However, Grubhub doesn’t hire drivers as employees, so you’re considered a Sole Proprietorship, or an unincorporated business by the IRS. You can deliver as a sole proprietor, but you have zero protection if anyone names you in a lawsuit. Without a registered company, your personal savings, cash, and other assets can be taken to pay a judgment if you’re found to be at fault.
3 Benefits to Starting an LLC for Grubhub
You can form a Limited Liability Company (LLC) or Corporation to enjoy liability protection and added tax benefits. Corporations require more to maintain compliance and can also be liable for higher taxes than a Limited Liability Company, and for this reason, many entrepreneurs go with the LLC over a Corporation.
1. Taxation
In general, LLCs pay less in income tax than either a sole proprietorship or corporation. Taxes are reported and paid on the individual owner’s personal returns, and the LLC itself does not file a tax return at the company level.
2. Management
LLCs are easier to manage, change ownership, and maintain compliance with annual reporting requirements. Most LLCs are only required to file an Annual or Bi-Annual Report in their state to continue doing business.
3. Limited liability protection
When you form a company, you’re essentially forming a separate entity that is fully responsible for its own tax and legal obligations. Working for Grubhub with an LLC means you’re protected from being personally wiped out if you’re ever sued while you’re delivering.
How to Start an LLC for Grubhub
Before you register as a Grubhub partner, you’ll form a company to protect your personal assets – either an LLC or a Corporation. The traditional Corporation setup is usually more than a small business needs, and they are more heavily regulated than LLCs, so for many entrepreneurs, the LLC (Limited Liability Company) is both affordable to start and manage on an annual basis.
- Pick a great name – stand out from competitors with a few memorable and catchy words that describe your Grubhub business.
- Form a company – register a Limited Liability Company (LLC) or Corporation to protect personal assets.
- Open a business bank account – keep all your business income separate from personal funds with a designated bank account.
- Apply for business licenses and insurance policies – our partners offer free quotes and discounted pricing to our clients.
- Sign up with Grubhub using your business name and EIN (employer identification number).
- Start delivering and pay yourself.
Start Driving with Grubhub
Once your business is registered, you can sign up with Grubhub using your company name and EIN. Here’s what you’ll need to open a Grubhub partner account.
- An automobile or bicycle (depending on the area)
- A valid driver’s license and commercial auto insurance for drivers
- A valid state I.D. or driver’s license for bike riders
- A smartphone
NOTE: drivers must be 19 years of age or older. Previous delivery experience is not required.
Sign up to drive
Visit the Grubhub for Drivers portal to open an account. You’ll need to submit an application along with your driver’s license (or state ID for bike riders) and auto insurance. You can download the app while you’re waiting for your application to be approved.
Get gear (optional)
You can use your own warming bags, but Grubhub offers car decals and other gear to help you promote your business.
Onboarding (optional)
Onboarding covers topics like how to use the driver app, scheduling, and picking up and delivering orders. It’s not required but can help you to navigate the system and start earning cash.
Set your schedule
Independent contractors like Grubhub drivers set their own hours. You can drive as little or as much as you want, within Grubhub’s safety guidelines. California and New York City Grubhub partners are subject to different rules, but you can still make money in those areas.
Get Paid as a Grubhub LLC
If you sign up with Grubhub as a business, they’ll send payments to your business bank account. You can pay yourself on a weekly, bi-monthly, or monthly schedule, whatever works best for you.
How much can you make with Grubhub?
Even though the delivery company ranks behind DoorDash and Uber Eats, many Grubhub partners report that they’re overall satisfied with the pay structure and how much they make on a regular basis. Obviously, the times of day and number of hours you work will determine how much you make. We’ve seen averages of about $18 per hour, and partners in populated areas report making between $23-$27 per hour.
The Final Lap
Grubhub holds onto a promising market share which means delivery drivers can earn good money as a side hustle or full-time business. Drivers are signing up and cashing in, but without a registered company, they’re all at risk of losing personal assets to a lawsuit. Driving as a sole proprietor is legal, but it can cost you everything you’ve worked for. You can prevent such a loss by registering either a Limited Liability or Corporation. Corporations can be complex and costly, so many small businesses form LLCs.
When you start an LLC for Grubhub, you only have to report and pay tax on your personal income tax returns, and the LLC itself doesn’t have to file tax returns or pay additional taxes. LLC management is generally simpler and costs less than registering a traditional Corporation. It’s also easier to change ownership and maintain state and federal compliance. The major reason why Grubhub partners register a company is to protect themselves from costly lawsuits. If you drive under a company name, the company would be named in a lawsuit, and you personally would be protected from paying any judgments.
Grubhub drivers must have various insurance policies to start working. Most businesses require General Liability and Commercial Vehicle insurance. Search the Internet for “business insurance policies” and Grubhub insurance requirements to find the exact policies for a delivery business. Our insurance partners can also help with free quotes and exclusive MyCompanyWorks pricing.
You’ll need to open a business bank account to collect funds and pay yourself – check with your local bank or with our banking partners to find the best banking solutions for your business. You also have access to business banking options from our partners when you order an LLC or Corporation formation with us. You’ll get instant access to your account dashboard where you can track progress and perform other functions from our platform.
Form a Limited Liability Company for Grubhub
You can register a company in three steps, and we can help you do the heavy lifting with one of our comprehensive startup packages. Order online and see the results right away in your free account dashboard. Track results and download completed filings when they’re ready. You can also add MyCompanyWorks Premium™ to your order to set your business compliance on auto-pilot. Check out our latest comparison and reviews, and reach out to our expert support team for help and more information.
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