Editor’s Note: CNY Executive Q&A is a feature appearing regularly in The Central New York Business Journal, authored by guest writer Jeff Knauss, who is co-founder of his own digital-marketing firm. In each edition, Knauss chats with a different executive at a Central New York business or nonprofit, with the interview transcript appearing in a conversational […]
Editor’s Note: CNY Executive Q&A is a feature appearing regularly in The Central New York Business Journal, authored by guest writer Jeff Knauss, who is co-founder of his own digital-marketing firm. In each edition, Knauss chats with a different executive at a Central New York business or nonprofit, with the interview transcript appearing in a conversational Q&A format.
In this issue, I speak with Thomas Carman, president and CEO of Samaritan Medical Center, located in Watertown. He has been Samaritan’s leader since April 2004.
KNAUSS:Tell us a little about your background, Tom.
CARMAN: I’m a native of Maine and went to college in Boston at Massachusetts College of Pharmacy. I’m a pharmacist by training. I met my wife while we were going to pharmacy school. She’s also a pharmacist, originally from Syracuse. Upon graduation, I spent a couple of years in the public health service at a hospital on Staten Island in New York City. When I left the public health service, we moved to Central New York and settled in Cortland. I worked for Cortland Memorial Hospital (now known as Cortland Regional Medical Center) from 1981 until 2004. I then moved to Watertown to work for Samaritan.
I started at Cortland Memorial Hospital as a staff pharmacist and held several different positions over the years before I became the president and CEO the last seven years. We have four children, so it was important for us to stay near Syracuse because that’s where my wife’s family was living. They were aging, and we wanted to be close by, but I was looking for a different challenge. I was selected to take the role here at Samaritan in 2004, and I have been here ever since.
KNAUSS:That seems like quite the rise in your career, going from a pharmacist to a hospital president and CEO. What do you think are some of the qualities that led you down that path?
CARMAN: I think some of the attributes that led me here come from my early work experience. When I was in high school, I started working in a corner drug store and that’s what really got me interested in pharmacy. Early on, I was also thinking that I would like to own my own store. When I went off to college and began to train as a pharmacist, I moved into hospital pharmacy and really fell in love with clinical pharmacy.
So, as you can see I am interested in business but have a passion for clinical. As my career progressed and I was able to move into managerial positions, it allowed me to combine that clinical background with the business background. That has really helped me over the years. To be in my position and understand patient care, to be able to understand the dialogue between physicians and administrators, physicians and nurses, and other health-care professionals is very important. That background has been really valuable throughout my entire career.
KNAUSS: f I were to ask your staff about your leadership style, what do you think they would say?
CARMAN: I think that they would note that I’m a very open leader, very transparent. I think they would also note that in my role, I have been focused on the future. I spend much of my time working strategically and am concerned more about where the organization has to go in the future. I don’t allow myself to get into the weeds, but I understand the operations very well, understand what’s going on, and my staff appreciates that. We’ve developed a strategic plan that has now been updated twice
KNAUSS: Tell us about the strategic plan?
CARMAN: The initial plan was targeted inwardly. It was focused on strengthening the Samaritan brand. It included a goal to make sure we had the right facilities, a facility master plan. It considered the services that we offered, with a particular focus on the physicians who provided those services. We had an emphasis on physician recruitment and retention. We also developed a goal around performance improvement and the quality of our services. We began to compare ourselves to national best practices and national standards. At the same time, we invested in our workforce, with a goal around workforce development. Fort Drum is the only Army division post of 10 across the country that does not have a hospital. Because of this unique situation, we had a goal to support Fort Drum.
When the 10th Mountain Division was posted at Fort Drum back in 1985, they didn’t put a hospital on post. They didn’t put schools on post, and a lot of housing for soldiers and families was in the community. It’s one of the most integrated military communities that you’ll find, which is why one of our goals was to ensure that we were supporting Fort Drum with health-care services.
This organization was led well by that strategic plan. The board did a great job to put this together. That plan served us well until about 2011. We’ve since updated that plan to consider the needs of the Accountable Care Act and the transformation we are going through in health care today.
It will be interesting to see what happens to that in the future, but our current strategy is around being a highly reliable organization, focusing on the quality and safety of our services It’s focused on serving community needs, making sure we’ve got the right services to meet this community’s needs. It’s also focused on population health and insuring that an entire cohort of patients who may have a similar disease state are taken care of. As an example, we have about 10,000 diabetics in our region for which we’re responsible. How do we take care of them? How do we ensure that they are getting the care that they should receive?
We have specific organizational goals around population health, and we are a part of the North Country Initiative (NCI). NCI is a clinically integrated network that includes Samaritan and five other hospitals throughout the region. The board is made up of 23 individuals, 17 of which are physicians. It’s physician-led and has obtained great participation from across the three counties — Jefferson, St. Lawrence, and Lewis. It’s beginning to put some things in place relative to population health.
I would also note that, in our current strategic plan, we continue to maintain goals related to Fort Drum, because that is such a unique relationship.
We’re also focused on our workforce. Much of our workforce efforts over the last seven or eight years has been around leadership development. In health care, we often take the best clinicians and make them a manager. That doesn’t make them the best leader, so we need to train and support them. A lot of our efforts have been around training our leaders to allow them to be comfortable to engage our staff. We have some wonderful staff and we need to make certain that they can help us with understanding the best way to provide for our patients.
KNAUSS: The first time I visited Samaritan Medical Center, I was greeted with a smile from everyone I walked by, which was at least 10 to 15 people. Talk a little bit about how you’ve developed that culture.
CARMAN: Clearly, it is all about culture, and culture is not something that changes overnight. Rather, it changes over time. Some have suggested it can take a good 10 to 12 years to change culture. For many years, we’ve been focused on the patient experience. That’s very important to us. But, let me step back and note that really, what we’re trying to provide is high value. When we think of value, we think of quality and experience, as well as the efficiency. With quality, we think of the clinical quality, which is obvious. But that’s often not what the patients can measure. What the patients can measure is the experience, and so we must be much more aware of what that experience means to them. We’ve also recognized that for the patient experience to be achieved, we’ve got to make sure that we have the engagement of our staff. The employee experience is also very important. When we combine the two of those together, that is the patient experience along with the employee experience, we refer to it as the “Samaritan Experience.”
To me, it is a journey. It has something that will never end and we want to continue to get better at it. When you note the friendliness of the culture, I think that is a bit of a reflection of my own personal style as it reflects how I greet people not only in the organization but in the community. It maybe goes back to my days in retail, but I’ve also always been very warm and welcoming, and I think it’s important to create that relationship with our staff. I go to every single orientation. I provide an overview of the organization. I have all the new staff members introduce themselves, and I have a chance then to get to know the staff.
We have 2,200 employees who I try to get to know through an orientation process and ongoing rounding. What really made a difference for us was when we adopted patient-centered leadership about eight years ago. That allowed us to find a way to empower our staff through our leaders, and that’s when we started the training for the leaders to provide them with a background that they needed to engage our staff. Also at that time, we began to look at how we reward, how we recognize, and we adopted values. This is where we started to see a real change in the culture, which is what you witnessed.
We established a group of staff and leaders to look at standards of performance, and we began to adopt certain standards. What you noted is one of the standards that came out of this group. That group came across the best practice of the 10-5 rule. What that means is that when we see someone coming down the hallway within 10 feet, we will acknowledge him/her. We try to make eye to eye contact and smile and recognize them. When we get to within five feet, we’ll say hello and greet that individual. This has been extremely valuable since we moved into an expanded new facility in 2010, which is much larger and more complicated to navigate. It caused our staff to quickly recognize when people were lost or confused and not quite certain which way to go.
Our staff then recognized that it was not enough to greet and acknowledge, but also to say, “Can I help you?” It is not uncommon for a staff member to now say, “I’ll walk with you or show you where you need to go.” The staff has done a great job of being much warmer and welcoming to the people who come here whether they are patients, friends, or family. This is because of the efforts that started about a decade ago.
KNAUSS: What do you do to recruit and retain top-level talent?
CARMAN:Recruitment and retention is very important to us. First off, we have focused a great deal over the last decade around physician recruitment and retention because it can be very challenging recruiting physicians and very critical for our community. What we’ve done is to put a group together that includes physicians, members of our boards, along with leaders of the community. They work together to identify what specialties are needed. Then, we try to be much more proactive about the approach, because physician recruitment is not something you can react to. It often can take a year, two, or three to recruit a particular specialist.
We also recognize that we wanted to retain the great staff we had, as well as the new recruits. We not only focus on the front end of recruitment but we’ve also focused on the backend of retaining. We’ve had tremendous support here. As an example, our foundation coordinates a group that focuses on what we can we do better so that we not only help the recruited physician but the spouse of that physician also. We often find that it’s not the physician who becomes disenchanted, but it’s the spouse. We have to make certain that the family is very satisfied with the environment. We focus on physicians because of the uniqueness and the challenges across the nation of finding the right physicians.
When it comes to our leaders, professionals, and front-line staff, we also go through a similar process of trying to find the right people for our organization. Hiring for behavior, trying to get the right people knowing that we can train them for what we need them to do. We also started a formal staff retreat called “The Samaritan Experience” a year ago. We took all 2,200 of our staff through training between January and June. Now that we’ve trained the entire staff, new employee orientation begins with that formal retreat.
The Samaritan Experience Retreat is a way for us to try to translate our values into our day-to-day work. This was not something that management decided to do. Rather, it was something our staff said “We want to do for our fellow staff members.” What they really wanted to accomplish with the retreat was to set the expectation for how we want to treat one another. That is how employees want to treat other employees, which will set the framework for how we want to treat our patients
About the author: Jeff Knauss is co-founder of the digital marketing agency, Digital Hyve, and has always had a passion for learning about successful executives and their stories. He also is a current board member of Byrne Dairy, the Food Bank of CNY, and Loretto Foundation. For more on Knauss, check out www.digitalhyve.com.
SYRACUSE — With the first phase of the emergency-department project complete, Crouse Health now focuses on the second part of the project. The next phase targets the existing emergency department, says Kimberly Boynton, president and CEO of Crouse Health. “It will be renovated into space for our PromptCare patients and will we close the PromptCare
SYRACUSE — With the first phase of the emergency-department project complete, Crouse Health now focuses on the second part of the project.
The next phase targets the existing emergency department, says Kimberly Boynton, president and CEO of Crouse Health.
“It will be renovated into space for our PromptCare patients and will we close the PromptCare across the street and that will be happening in September 2018,” says Boynton.
The existing PromptCare facility will remain open and available to patients until it’s time to move into the renovated space, Boynton adds.
“The importance of that is that it now brings the spaces contiguous to each other, so if you need the emergency room and you show up in PromptCare right now, you have to travel across the street or vice versa. Well, now, when you need our services, you’re going to enter through one door and we’re going to help with that decision of PromptCare versus [emergency department],” says Boynton.
Boynton on July 12 spoke with CNYBJ after Crouse Health formally opened the emergency department after Hayner Hoyt Corp. completed the first phase of construction on the $38 million project.
Its infrastructure and technology advancements make the new department “the region’s most innovative and modern facility,” Crouse Health boasted in a news release announcing the formal opening.
Besides the July 12 formal opening event, Crouse Health also held a community open house on July 13, and a tour for regional emergency-services providers the day after that.
The new space is “three times larger” than the current emergency-services area, the hospital added.
“We often refer to the emergency department as the front door to the hospital. That has always been the case here at Crouse, with some 54 percent of the patients we care for entering our system through the [emergency department],” Boynton said in her remarks at the formal opening event. “This important project has been years in the planning and is a tangible expression of Crouse’s mission to provide the best in high-quality, efficient, and accessible patient care…,” said Boynton.
Crouse is naming the new department in honor of William and Sandra Pomeroy.
The hospital in March 2016 announced that the William G. Pomeroy Foundation provided a “generous” donation that placed the Pomeroy name on the hospital’s renovated emergency department. Crouse didn’t disclose how much the foundation donated.
“A lot of blood, sweat, and tears by many people made this happen on time, ahead of schedule,” William Pomeroy said in his remarks during the formal-opening ceremony.
Pomeroy credited Crouse Hospital for preparing him in 2004 for a “life-saving,” stem-cell transplant in Boston following a leukemia diagnosis.
The modern economy is in a constant state of change, which means businesses — large and small — must move quickly in response to market shifts. Even the strongest companies will cycle through good times and bad. Bringing out the best in employees is a challenge in even the best of times. According to Gallup,
The modern economy is in a constant state of change, which means businesses — large and small — must move quickly in response to market shifts.
Even the strongest companies will cycle through good times and bad. Bringing out the best in employees is a challenge in even the best of times. According to Gallup, only 32 percent of U.S. workers felt engaged in their jobs in 2015, which was a pretty good year for the economy and business growth.
So imagine the struggle of keeping the best workers happy when the business transitions through a down cycle? And it will. Every business goes through four repeating phases: startup, high growth (the “tornado”), declining growth (the “avalanche”), and consolidation.
Picture the employees sliding downhill in that avalanche, and you get the idea. It’s up to a company’s leaders to help them hold on, to turn the inevitable transition period from exhausting to exhilarating.
How does a business leader manage that through possible layoffs and pay cuts or, at the very least, major changes to the processes that are used to get the work done every day?
Start putting people in the roles that fit them best
This is the time to ask some tough questions. Who on the staff is so tired and discouraged they can no longer do their jobs well? Who has been moved outside their normal roles, and how are they handling their new positions? Do they need to be moved back or not? Once you have answered these questions, you can step back and take a more accurate look at your staff. You’ll be able to add people where you need them — and remove people where you don’t.
Expect resistance to change
If this is painful for you as a manager, think about how it is for staff members who have a lot less control over the situation. How you and your leadership team present change to your staff can make a world of difference. Employees who feel involved in the change and understand what’s going on demonstrate a more rapid recovery and may even perform better in the end.
Clear and frequent communication is vital
If you introduce processes that staff members don’t understand or haven’t learned, you’re going to slow things down rather than speed them up. Invest in your people. Make sure they always have proper training and equipment.
During the consolidation period between high times and low times and back to high times again, a leader’s primary role is to rally those frazzled and frustrated troops.
Make sure everyone understands you’re in the midst of a normal process. And keep waving that flag so that no one gets discouraged.
Dave Hopson, Ph.D., is author of “Surviving the Business Storm Cycle: How to Weather Your Business’s Ups and Downs,” (www.davehopson.com) and managing partner at Triumphus, which offers IT consulting services to companies from startup through exponential growth to IPO.
After rising to a nearly three-year high in June, the Empire State Manufacturing survey general-business index fell 10 points in July to 9.8. The survey results indicate that new orders and shipments grew “at a somewhat slower pace than in June,” the New York Fed said. The manufacturing index had risen 21 points in June
After rising to a nearly three-year high in June, the Empire State Manufacturing survey general-business index fell 10 points in July to 9.8.
The survey results indicate that new orders and shipments grew “at a somewhat slower pace than in June,” the New York Fed said.
The manufacturing index had risen 21 points in June to 19.8, its highest level since September 2014.
A positive index reading indicates expansion or growth in manufacturing activity, while a negative number points to a decline in the sector.
The results of the July survey indicate that business activity “grew modestly” for New York manufacturers, the Federal Reserve Bank of New York said in its report issued July 17.
The survey found 30 percent of respondents reported that conditions had improved over the month, while 20 percent of manufacturers said that conditions had worsened.
Survey details
The new-orders index edged down 5 points, but at 13.3, it still showed that orders increased “at a fairly solid clip.”
The shipments index fell 12 points to 10.5, suggesting that shipments grew, “but at a slower pace than last month.”
The unfilled-orders index dropped below 0. The delivery-time index was “little changed” at 4.7, pointing to somewhat longer deliver times, and the inventories index fell to 2.4.
The index for number of employees fell for a third consecutive month, though it remained positive at 3.9, a sign that employment was growing, but not as rapidly as in earlier months.
The average-workweek index fell to 0, indicating that hours worked remained the same.
The prices-paid index was “little changed” at 21.3, as was the prices-received index at 11.0, suggesting that the pace of price increases “held steady,” the New York Fed said.
Indexes assessing the six-month outlook remained “favorable,” though firms were “somewhat less optimistic” about future conditions than in June.
The index for future business conditions fell 7 points to 34.9, and the index for future new orders fell 9 points to 33.4.
Employment was expected to increase “modestly,” though the average workweek was expected to decline slightly.
The capital-expenditures index slipped to 15.0, and the technology-spending index was at 11.8.
The New York Fed distributes the Empire State Manufacturing Survey on the first day of each month to the same pool of about 200 manufacturing executives in New York. On average, about 100 executives return responses.
CICERO — Amidon Marketing, a new marketing firm headquartered in Cicero, has acquired Customer Business Services, a marketing business in Auburn. Customer Business Services, also known as CBS Marketing & Development, operated at 360 Grant Ave. in Auburn. Amidon Marketing is located at 6250 South Bay Road in Cicero. Josh Amidon, co-owner of Amidon Marketing,
CICERO — Amidon Marketing, a new marketing firm headquartered in Cicero, has acquired Customer Business Services, a marketing business in Auburn.
Customer Business Services, also known as CBS Marketing & Development, operated at 360 Grant Ave. in Auburn. Amidon Marketing is located at 6250 South Bay Road in Cicero.
Josh Amidon, co-owner of Amidon Marketing, had purchased CBS Marketing & Development in a transaction that closed June 14. Amidon declined to disclose the purchase price, but said he used his own cash for the acquisition.
Leaving then acquiring
Amidon had worked for CBS Marketing & Development for about two years.
Owner Kimberly Manrow, who also runs other businesses, had hired Amidon in 2015 to operate the marketing business, he notes.
Amidon earlier this year decided to pursue his own marketing firm to serve the Syracuse and Central New York area.
“There is a need for what we do here in the Syracuse area,” says Amidon, who spoke with CNYBJ on July 14.
After Amidon decided to depart Custom Business Services, Manrow offered to sell the business to him.
“She was wondering if I’d be interested in buying out the company … buying out the company contracts, buying out the files, buying out anything deemed an asset, and I jumped at the opportunity,” says Amidon.
He noted that Manrow is an accountant and tax preparer and preferred to focus on those areas, instead of marketing services.
After Amidon acquired CBS Marketing & Development, Manrow had to lay off a graphic designer, who Amidon has since helped land a new job, he says.
Besides its Auburn headquarters, CBS Marketing & Development also operated a satellite office in Camillus, which Amidon has since closed.
Amidon used the services of an attorney during the transaction process, but he declined to identify the individual.
Launching new business
Amidon acquired CBS Marketing & Development as he was launching Amidon Marketing, a venture that he and business partner Joe Scripa started discussing earlier in 2017.
Scripa owns his own real-estate firm, Scripa Group, and was a client of Amidon during his time at CBS Marketing & Development in Auburn.
They were meeting about a marketing plan when Scripa suggested they launch their own marketing firm.
Amidon “laughed it off at first,” as he was trying to launch a website for Scripa.
“He was serious and it became more of a real conversation as time went on,” says Amidon.
Amidon and Scripa share equal ownership in the firm, which leases its headquarters space from Scripa.
Besides the Cicero headquarters, Amidon Marketing on Aug. 1 will open another office in Brewerton near the Oswego County line. It also plans to open an additional office in Syracuse’s eastern suburbs, but the exact location has yet to be determined.
Amidon Marketing currently has 17 clients, including the Scripa Group, Skippy’s Ice Cream, and Auburn Leathercrafters.
Amidon declined to disclose his firm’s revenue information.
He describes Amidon Marketing as a company that provides “affordable marketing services geared toward the small-business owners of Central New York.”
It offers services that include consultation, branding, graphic design, social design, email marketing, direct mail, web design, search-engine optimization, and blogging and copywriting, according to its website.
About Amidon
Amidon is a 2003 graduate of Cicero-North Syracuse High School. He later earned an associate degree in business administration from Columbia College in 2008.
In 2005, Amidon started working for Pyramid Management Group, where he handled marketing activities before joining CBS Marketing & Development about a decade later.
While working at Pyramid, he also performed standup comedy during his free time.
Amidon developed his passion for marketing while working as a standup comedian. He’d call radio stations to request on-air appearances to talk about his shows, and passed out fliers near the hotels he stayed at to spread the word about his comedy shows.
“It’s really all about building your own brand,” says Amidon. “It became very apparent that I have a little bit of a knack for this.”
“Across Central New York, small businesses are an important driver of our regional economy as they create jobs and attract investments,” Andrew Fish, senior VP of business development at CenterState CEO, said in a news release. “We are excited to formally adopt the SyracuseFirst brand and to restructure the organization so we can become an
“Across Central New York, small businesses are an important driver of our regional economy as they create jobs and attract investments,” Andrew Fish, senior VP of business development at CenterState CEO, said in a news release. “We are excited to formally adopt the SyracuseFirst brand and to restructure the organization so we can become an even stronger advocate for independent and locally owned businesses.”
SyracuseFirst executive director Chris Fowler “has stepped aside,” CenterState CEO said.
“Even though I will no longer be the executive director of SyracuseFirst, I am not stepping down from my commitment to small and independently owned businesses,” Fowler said in the release. “I believe SyracuseFirst’s integration into CenterState CEO’s programming enables it to evolve and grow, which will ultimately support a more vibrant community. Regardless of what opportunities I am pursuing, I will always remain a vocal advocate for these businesses which contribute to our community’s unique identity and culture.”
Fowler is running for Syracuse mayor this fall.
CenterState CEO will establish a new steering committee to “guide the future direction” of SyracuseFirst programming.
The new steering committee will also evaluate all current SyracuseFirst programs and determine ways to “enhance resources and add value” for locally owned, independent member businesses.
Founded in 2009, SyracuseFirst says its “mission is to create a thriving local economy by maximizing the potential of local businesses, and transferring market share from non-locally owned businesses to local independently owned businesses.”
SyracuseFirst and CenterState CEO in 2012 formed a legal partnership to “advance their shared goals of supporting” small and locally owned independent businesses.
Under the original agreement, CenterState CEO licensed the SyracuseFirst brand, keeping it a separate membership-based entity.
CenterState CEO, in return, provided “significant” programmatic and administrative support to SyracuseFirst.
Named program director SYRACUSE — James Shomar has joined the StartFast Venture Accelerator leadership team as program director. StartFast is a program of Upstate Venture Connect, a nonprofit group formed in 2010 to encourage the development of more small, innovative companies in upstate New York. Shomar will lead the StartFast accelerator program and broaden support
SYRACUSE — James Shomar has joined the StartFast Venture Accelerator leadership team as program director.
StartFast is a program of Upstate Venture Connect, a nonprofit group formed in 2010 to encourage the development of more small, innovative companies in upstate New York.
Shomar will lead the StartFast accelerator program and broaden support for alumni founders, according to a StartFast news release. He will also focus on growing the StartFast Fund and exploring new avenues for expansion.
“I’m extremely excited to be joining StartFast. The program has built an impressive track record and is perfectly positioned for both entrepreneurs and investors to bridge the gap between the very early stages of a company and larger funding rounds,” Shomar said in the release.
“We’re delighted James has joined the team. He brings the right mix of entrepreneurial experience and passion for startup community building. StartFast is now positioned for the next phase of growth.” Nasir Ali, StartFast co-founder and managing director, said.
Shomar has more than five years of experience in launching and advising innovative technology companies. Most recently, he founded and served as CEO of Solstice Power, a high-tech company in the solar industry focused on combined heat and power concentrated solar systems. Shomar also worked as the entrepreneur in residence at Syracuse University’s Whitman School of Management. He holds a master’s degree in entrepreneurship and bachelor’s degree in mechanical engineering from Syracuse University.
The StartFast program is a 12-week bootcamp for startups, providing capital, virtual co-founders and staff, space, and introductions to mentors and angel investors as well as big-name venture funds.
StartFast’s managing directors have invested in and mentored more than 37 companies, enabling them to raise more than
$100 million, according to its website. To date, four of these companies have produced exits.
OSWEGO — Operation Oswego County (OOC) announced that it recently presented its 2017 Dee Heckethorn Entrepreneur Award to Allen Chase in recognition and appreciation of “exceptional entrepreneurial spirit, creativity, and dedication to fostering the growth and development” of Allen Chase Enterprises, Inc. Allen Chase Enterprises is a commercial outdoor maintenance provider for plowing, landscaping, herbicide
OSWEGO — Operation Oswego County (OOC) announced that it recently presented its 2017 Dee Heckethorn Entrepreneur Award to Allen Chase in recognition and appreciation of “exceptional entrepreneurial spirit, creativity, and dedication to fostering the growth and development” of Allen Chase Enterprises, Inc.
Allen Chase Enterprises is a commercial outdoor maintenance provider for plowing, landscaping, herbicide application, and mechanical vegetation removal, OOC said in a news release. The business was “transformed” from a garage-based startup in 2001 to a fleet of more than 70 specialized equipped vehicles and 72 employees located in the town of Scriba.
The award recognizes Allen Chase for providing services to public and private sector customers across New York state, Pennsylvania, and beyond; for achieving annual sales growth of more than 35 percent per year since 2014; and for his vision, commitment, and focus on operating a “very successful business” in Oswego County. The OOC presented him the award at its annual meeting in June.
Upstate New York has finally joined the rest of the country and now allows ride-sharing companies to operate in the area. After much dispute, lawmakers agreed to a 4 percent sales tax on each fare for the state’s general fund, plus an additional 2.5 percent surcharge for workers’ compensation. Although Uber will handle collecting and
Upstate New York has finally joined the rest of the country and now allows ride-sharing companies to operate in the area. After much dispute, lawmakers agreed to a 4 percent sales tax on each fare for the state’s general fund, plus an additional 2.5 percent surcharge for workers’ compensation. Although Uber will handle collecting and remitting these fees, if you are thinking of signing up as a driver to earn some extra money, there are several other tax issues to consider before accepting your first ride.
Uber’s policy is to treat drivers as independent contractors, meaning that drivers are considered to be self-employed business owners. Because of this, it is essential for drivers to keep good records of income, business expenses, and mileage. Recent tax cases have highlighted the importance of proper documentation, indicating that estimated deductions lacking support will not hold up under audit.
Income
At year-end, Uber will provide its drivers with a Form 1099 (instead of Form W-2) showing the amount of money earned during the year. The IRS will also receive a copy and check that the amount matches what is reported on the driver’s tax return. There are two variations of the 1099 form depending on how much was earned:
1. Form 1099K will be provided if both 200 ride transactions occurred and earnings exceeded $20,000.
2. Form 1099-Misc will be provided for earnings greater than $600, but less than $20,000. If earnings were below the $600 threshold, drivers will not receive a 1099 form, but are still required to report any income on their tax return.
The amount on the 1099 may be higher than expected because it will include the fees that Uber takes as its cut from each rider’s fare. The amount of Uber’s fees will be shown on a year-end tax summary that Uber will provide, and can be deducted as an expense on the driver’s return, along with other business-related expenses.
Expenses
The costs for operating their vehicles for business is another significant deduction that drivers can claim. Generally, the greater of two calculations can be deducted, but a few exceptions apply. Drivers should check with a tax professional if their vehicles are leased or if they previously claimed depreciation on them for a different business. The two methods for calculating vehicle expenses are:
1. Standard mileage: Deduct 53.5 cents per mile (2017 rate) for every business mile driven. This method is the simplest and often results in the highest deduction.
2. Actual expenses: Expenses include gas, oil, tires, insurance, registration, lease payments, depreciation, maintenance, and repairs. If the vehicle is used for personal and business use, expenses are prorated to the business amount by applying the percentage of business miles divided by the total miles driven during the year. This method requires more documentation and tracking of expenses, but if major repairs were made, it may result in a higher deduction.
For either method, the driver must know the number of miles driven for business. Uber will track the miles driven with passengers in the car, but drivers can also count the distance driven to pick up riders, the fuel used while waiting for riders, and the miles driven toward a pickup that gets canceled. It is important to keep a mileage log to have as support for the number of business miles claimed in the event of an IRS audit. There are several apps you can use to track mileage — standard paper and pencil will work, too.
In addition to vehicle expenses, drivers can deduct other costs associated with operating their ride-sharing business. It is important to document and claim only expenses incurred for the business. Personal expenses cannot be deducted. For mixed-use items, only the portion used for the business can be claimed. Examples of other operating expenses are: parking fees; tolls; cell phone/data plans; additional liability insurance; AAA memberships; safety equipment and tools; car washes; tax preparation fees; and items for customers such as food, beverages, and charging cables for electronic devices.
Self-employed individuals can also deduct the cost of health-insurance premiums, and can reduce their tax bill even more by making contributions to qualified retirement plans. There are several types of plans to choose from including traditional and Roth IRAs, SEP and SIMPLE IRAs, and individual 401(k) accounts. Drivers should speak with a tax or financial advisor regarding retirement options.
Estimated taxes
Uber does not withhold and remit Social Security, Medicare, or income tax for drivers. As independent contractors, drivers are on their own to timely pay federal and state income taxes, as well as a self-employment tax for their business. Self-employment tax takes the place of traditional payroll taxes and is calculated on the net income of the business after deductions at a rate of 15.3 percent. Half of the self-employment tax can be deducted on the driver’s income tax return. Depending on the driver’s situation, quarterly estimated income tax payments to the IRS and New York State may be required. Drivers should set aside a portion of their earnings for self-employment and income taxes in order to avoid an unwanted surprise at tax time.
Starting your own business can be a rewarding endeavor, but also one that creates many tax complexities. Uber drivers should consult with a tax professional regarding actions to take to correctly report and minimize their tax liability.
Kristin Hohn, CPA, MTAX, (khohn@bonadio.com) is a senior accountant, and Andrea Steciuk (asteciuk@bonadio.com) is an in-charge accountant on the tax team in the Bonadio Group’s Syracuse office.
It is we who are lucky he came here His name is Kanu. He was swabbing the floor at a Dunkin’ Donuts just before closing. I kidded him. And he hit me with a comment and a look on his face that nearly knocked me off my stool. I had watched him pluck donuts from
His name is Kanu. He was swabbing the floor at a Dunkin’ Donuts just before closing. I kidded him. And he hit me with a comment and a look on his face that nearly knocked me off my stool.
I had watched him pluck donuts from racks and wrap them. I saw him prepare sandwiches and cash out the customers.
Then I watched him clean the kitchen. And finally, there he was, bundling the trash and swabbing the deck.
“They have you doing everything, don’t they?” I asked.
Kanu eyed me and leaned on his mop handle. His eyes grew wide, and he beamed. “I am so fortunate,” he said. “I am just so fortunate to be doing this work.”
What did he mean by that?
“I have recently received my degree in industrial engineering and management. Some day I will be managing people. Some of them will have low-paying jobs. Some will have to work two jobs. It’s good for me to work the way some of them will have to work. It is good for me to experience some of the things they will experience. Good for me to learn their side of life,” Kanu explained.
We talked. Then we exchanged emails. Kanu came to the U.S. from Bangladesh nearly seven years ago. For two years, he did nothing but work. Seven days a week. Doing anything and everything. Not a single day off in two years.
The money he saved was enough to pay for two years of community college. He earned a computer science degree. Next came RPI, the major engineering school. After two years more, Kanu emerged with his degree in industrial management and engineering.
When I pressed him, Kanu admitted it was extremely hard work. “I have no one here, in this country. I took a big chance going to RPI with its great expense,” he noted.
To get through that tough school, he needed total dedication. And a generous dollop of confidence in himself.
He dove into extra-curricular work. In subjects too complicated for me to describe or understand.
I don’t know how he found spare time. But he also worked as a mentor with Asian students. He helped develop a webpage for the local Bangladeshi Hindu community.
“My goal is to get a good position,” Kanu says. “But it is also to be in a position where I can help others.”
I offer Kanu’s story to you. Remember him the next time you — with a knee-jerk reaction — get down on young people. Remember him if ever you question the value of immigrants to this country. Remember him if you ever you doubt that hard work and perseverance are given too much credit.
Maybe it was appropriate we met on the weekend of the 4th of July. To me, Kanu is the story of America.
He comes here from an impoverished country — brimming with enthusiasm and dreams. Kanu works, works, works. Saves money. Sacrifices to do so. Uses the money to acquire education and skills. Lends a helping hand to others. Makes plans to help more. He brims with confidence. He cherishes ideals we all can admire. To him the glass is more than half-full. It will soon overflow, of that he is certain.
My guess is that whoever hires him will remember the day they did. And will remember the years he works for them. For a person with such optimism, work ethic, and drive will be worth more than gold and silver to them.
He swabs floors until a lucky employer finds him.
“I believe in working both hard and smart. And in trying to make my own luck,” he said.
When we spoke, he said he was honored to talk with me. Oh Kanu, Kanu, it is me who is honored. I don’t deserve to hold your mop.
He says he is lucky to be swabbing floors at 10 at night. It is me who is lucky to have met him and learned his story. It is America that is lucky he has come to our shores. He will inspire many people.
From Tom … as in Morgan
Tom Morgan writes about political, financial, and other subjects from his home near Oneonta. Several upstate radio stations carry his daily commentary, Tom Morgan’s Money Talk. Contact him at tomasinmorgan@yahoo.com
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