That works until there is any sort of an accident and the driver's insurance doesn't cover them operating their vehicle as a business. Part of the commission that gets paid goes to providing insurance.
I imagine that when reporting it to the police/insurance agency, many (most?) drivers would omit the fact that they were driving for business purposes when the accident occurred.
Not saying this is legal/ethical, just that it would come to mind in that situation.
If that friend got into an accident while driving to Home Depot for you, would you pay their insurance deductible? If they got hurt would you pay their medical bills? Would you do the same for your off the books taxi driver?
If you get hurt while helping a friend, would you really ask them to compensate you? I wouldn't unless they were somehow responsible. Accidents happen.
