All business owners wish they had more of two things: time and money. When it comes to logging tax-deductible mileage for businesses, it seems as though we are still stuck in the stone age, trying to manually track and record the miles we rack up. But a new class of apps is providing a simpler, more cost effective, and efficient way to log the miles you drive for business.
MileCatcher is trying to stand out in this crowded field. This time-saving smartphone app automatically tracks, categorizes, and creates expenditure reports for tax deductible mileage. Based in Redmond, Wash., and founded by former Microsoft senior director Lars Boesen, the app has launched in the U.S. and Europe, with a customer base of more than 10,000 users.
“We still think this is a very greenfield area, and no one has really solved it yet,” said Boesen, MileCatcher’s CEO, explaining the inspiration for the company.
One of the leading apps in the field, MileIQ, is a similar app acquired last year by Microsoft — Boesen’s former employer of many years. MileCatcher offers more free features, and a greater level of detail in its reports. In addition, its premium service is lower-priced for similar functionality.
“What users want is an expense report at the end of the day, either to deduct from their taxes or get reimbursed by their employer,” Boesen said.
MileCatcher runs in the background and logs all the trips that you take. Minutes after you arrive at your destination, a trip report is automatically generated that tells you how many miles you drove, how long it took, the specific start and end addresses (unlike MileIQ), and the route you took to get there. Then, the next time you open the app, you classify the trip as either personal- or business-related. To simplify the classification process, you can set work hours that will automatically log trips taken during a specified time period as tax deductible.
Additionally, if the same trips are made on a regular basis, and consistently classified as personal, MileCatcher will recognize the trip as such, and will auto-classify them in the future.
The failure of most productivity apps rests in peoples’ unwillingness to consistently use them. However, if you use MileCatcher steadily at the onset, you will have very few trips to manually classify as time goes on. Because of its intelligent auto-classify feature, people who aren’t as adamant about using the app won’t be inundated with unclassified trips to filter through come tax season.
“It’s truly about auto-classifying the trips — that’s the magic,” Boesen said. “Long term, we don’t want you to even open the app. … We want you to see the report we send you on a monthly basis or at the end of the year. We hope that over time, 98 percent of your trips will be classified for you.”
MileCatcher‘s reports are detailed, down to where you ran into traffic, the maximum speed you reached, how many hard brakes you took, and where you had to rapidly accelerate. While I appreciated the “swipe-to-categorize” aspect of MileIQ better than MileCatcher, the MileIQ trip reports provide significantly less information, which makes it less valuable to employers.
MileCatcher is free to download, and will log an unlimited amount of trips for free. If you want the time-saving feature of auto-classification, upgrading to the annual premium subscription costs $48 per year or $3.99 per month. In contrast, MileIQ will only allow you to log 40 trips a month for free unless you upgrade to its $60 annual subscription.
Boesen said Microsoft’s MileIQ acquisition was a good thing for the industry “because it endorses the space.”
Asked what it was like competing with his former company, he laughed and said, “Honestly, we’re really not competing with them. We are competing with a paper book, and people who don’t keep a log at all.” He explained that the company’s research shows “only 2% of people are using a mileage app, about 70% are using a paper notebook, and about 30% are faking it, thinking they have receipts and so on, thinking that’s complying.”
MileCatcher currently has eight employees, and CEO Boesen is funding the startup himself. While the company is not yet profitable, Boesen said demand is high, and he believes the market is ready to move away from traditional methods of mileage tracking.