Gig Worker COVID-19 Relief FAQs

Thanks to those who joined our FAQ session on Facebook Live on April 16, 2020! We have updated this page with more questions and answers, including specifics from the live webinar. Thank you!

Click the image below to access a recording of this livestream! You will need to be a member of our exclusive Play Octopus Drivers Facebook group to view the recorded video:

Screenshot of Facebook LiveStream

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What is a Paycheck Protection Program (PPP) loan?

On March 27, 2020, the CARES Act was enacted to protect small businesses facing unprecedented economic disruption due to the COVID-19 outbreak.
The Act contains $349 billion in relief for small businesses and American workers through the Paycheck Protection Program (PPP) designed to provide direct relief via forgivable, low-interest loans. Additionally, on April 23, 2020, the House passed a legislation to add another $310 billion in new funding to the PPP program. 
Small businesses can use the PPP loan funds to cover up to 8 weeks of wages, commissions, income, or net earnings from self-employment or similar compensation.
The loans will be administered by the U.S. Small Business Administration (SBA) through SBA approved lenders.

Are rideshare drivers eligible to apply for PPP loans?

Yes. The PPP loan program is for any small business with less than 500 employees, including sole proprietorships, independent contractors, and self-employed persons.

What is a Economic Injury Disaster Loan (EIDL) loan? Are rideshare drivers eligible for it?

SBA’s disaster loan program, EIDL, is meant for specifically serving people affected by natural disasters in the U.S. 

For COVID-19 relief, all small businesses, including sole proprietors and independent contractors, can apply if you can demonstrate that your business has suffered severe economic hardship because of the pandemic. 

A sum of $10 billion was initially allotted through the CARES Act to pay EIDL applicants an advance on their loans as the processing time for these loans could range from 90 days to several months. On April 23, 2020, a new legislation was passed by the House that added $60 billion in new funding for the EIDL program.

If you qualify for the program, you can receive up to $10,000 in advance grant which does not need to be paid back with the loan. The advance grant amount for most independent contractors would be $1,000 as the SBA is providing the grant on the basis of $1,000 per employee and up to ten employees.
You can find out more about the EIDL loan program here.

Are both the PPP and EIDL loan programs out of funds? Will more funding be added soon?

On April 23, 2020, the House passed a new legislation for $484 billion in additional relief funding for small businesses, including nearly $310 billion in new funding for the PPP program and $60 billion for the EIDL program.

Accordingly, we expect SBA to recommence taking applications for both programs shortly.

Is the PPP loan fully forgivable? What are the qualifications?

Yes. If at least 75% of the PPP loan funds received are applied towards “payroll costs”,  and no more than 25% is used on certain eligible business-related expenses, then the loan will be fully forgiven.

For an independent contractor, the payroll costs would include wages, commissions, income, or net earnings from self-employment.

Per recent SBA guidance, payroll costs for independent contractors and sole proprietors would be calculated based on their 2019 tax filings, specifically their 2019 net earnings as reported on Schedule C of their Form 1040.

Accordingly, 75% of the PPP loan funds must be applied towards compensating yourself, i.e. your personal expenses such as rent, groceries, etc.. The balance 25% can be applied towards expenses such as fuel costs and health insurance premiums.

Please note that regardless of whether you have filed a 2019 tax return with the IRS, you must provide the 2019 Form 1040 Schedule C with your PPP loan application.

What are the general terms of the loan?

For any portion of the PPP loan that is not forgiven, the interest rate on the unforgiven amount is 1% fixed rate, and the term is 2 years.

Monthly loan installments for the portion of loan that is not forgiven, will start after 6 months of disbursement of the loan. Please note that interest will still continue to build up during this time on the portion of the loan that is not forgiven.

Additionally, the PPP loans require no collateral, no guarantees, or loan fees.

How much loan amount am I eligible for?

The amount of the loan will be based on your actual prior earnings, specifically the net earnings reported on Schedule C of your 2019 Form 2040, and can be for up to 2.5 times of your average monthly “payroll costs”.

For example, if you are reporting $48,000 in net earnings from your rideshare business in 2019, which includes $60,000 in gross earnings and $12,000 in business costs such as fuel, then your average monthly payroll costs equate to $4,000 and the PPP loan amount you will be eligible for at 2.5 times would be $10,000.

In general, independent contractors can calculate their aggregate payroll costs using data either from the previous 12 months OR from calendar year 2019. A driver who was not in business from February 15, 2019, to June 30, 2019, may use the average monthly payroll costs for the period January 1, 2020, through February 29, 2020.

To clarify, any relief you receive through the PPP loan is separate from the EIDL and also the economic impact payments under the stimulus program that all American taxpayers are eligible for. However, it is important to note that you cannot receive both Unemployment Benefits and a PPP loan at the same time. You should consider the payout of each program to determine which is the best fit for you.

When and where can I apply for a PPP loan?

As of April 23, 2020, the PPP has been refunded and we expect the SBA to start taking new applications shortly.

We recommend getting your 2019 taxes completed in the meanwhile in addition to identifying a lender to submit your application. That will put you in the best position once the PPP is re-opened.

The loans will be made available through private lenders, including SBA-approved lenders, federally insured depository institutions, federally insured credit unions, and any Farm Credit institutions.

You should first check with the bank or credit union where you already do business since many lending institutions are only accepting PPP loan applications from existing customers.

The PPP loan application is available here.

What if I am having trouble finding a lender to work with?

If you aren’t able to locate a lender, try this SBA Paycheck Protection Program lender search tool.

Also, here are a few local banks that are accepting applications from applicants with no existing relationship:

Alma Bank
BOEFLY (ConnectOne Bank subsidiary)
Modern Bank
Aspire Federal Credit Union

Additionally, here are a few fintech companies that are offering an online application and approval process for the PPP program. Some of them are continuing to take applications while awaiting additional funding:


What documents will be required for the loan?

Drivers will be required to submit documentation to establish eligibility, including tax filings reported to the IRS and Forms 1099-MISC.

Please note that regardless of whether you have filed a 2019 tax return with the IRS, you must provide the 2019 Form 1040 Schedule C with your PPP loan application.

We recommend consulting this PPP Loan Checklist and Worksheet/Calculator prepared by our transportation law counsel, Windels Marx Lane & Mittendorf, LLP.

If approved, how long does it take to receive the loan?

Currently, there is no clear guidance on the timing of loan disbursements. A number of small businesses and independent contractors have reported that they are yet to receive the PP loan funds even after several days of receiving loan approval from the SBA. We suggest you speak to your local SBA-approved lender that helped you with your application, to get additional information on timing of loan disbursements.

What if I need more help and assistance in applying for a PPP loan?

If you need any assistance in applying, including recommendations to lenders, you can directly reach out to our transportation law counsel, Windels Marx, who have generously agreed to provide free assistance to rideshare drivers during this time.

You can either contact them via their COVID-19 Transportation Law Hotline, at 212-237-1106, or email Kim Ramkishun at

Do independent contractors qualify for unemployment compensation under the CARES Act?

The CARES Act expanded the scope of individuals who are eligible for unemployment benefits, including those who are “furloughed” or otherwise unemployed as a direct result of COVID-19, including self-employed individuals, independent contractors and gig workers.

The task of determining eligibility and the amount of unemployment benefits has been left to each state. For individuals who satisfy the relevant criteria, they will receive the weekly benefit as determined by the state for a maximum of 39 weeks, plus an additional amount from the federal government equal to $600 per week, agan, ending July 31, 2020. 

Note that you cannot receive both unemployment compensation and a PPP loan at the same time. You should evaluate the payouts under each program to decide which program suits you best.

Our friends at Gridwise have generously put together a detailed state-by-state guide to help rideshare drivers file for unemployment benefits. Here is a direct link to their guide.

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.  Additionally, information on this website may not constitute the most up-to-date legal or other information. You should contact your attorney to obtain advice with respect to any particular issue or problem.