Finding ways to make extra money has become vital to most people’s survival. For those with cars, joining ride-hailing services has become a good option.
These jobs allow them to make use of their existing assets to make money. And, on a flexible schedule.
But there are several ride-hailing providers to consider. Lyft and Uber are the most popular the world over.
When making a choice, rates are often the biggest concern. So between Lyft vs. Uber driver income, which is better?
Before we narrow down to specific figures, let’s learn a bit more about how this industry works.
How Ride-Hailing Works?
Not so long ago when one wanted a taxi service they need only to stand on the street. You could wave down a vehicle or look for a taxi stand.
These days, people do not need to anxiously be on the lookout for a cab. By using an app on your phone you can pick from any number of vehicles in the vicinity. And schedule them for a specifically timed pick-up.
This is how ride-hailing apps like Lyft and Uber work. They pre-screen drivers and their vehicles. You then can choose from those in the area to meet your transport needs.
It is a great way to get service on-demand, wherever, and whenever you need it. The drivers will always strive to be on time.
This is because they would not want a client to cancel their ride. This could mean a loss of income. Also, it could impact their reviews.
Reviews are a vital aspect of ride-hailing services. Riders can share and rate their experience. This affects the profile of drivers and how other riders will consider them
The better your ratings, the more riders will want to order your service.
The services can also differ according to your budget. You can decide on a luxury vehicle or standard sedan, whichever best suits your pocket.
The service is facilitated through apps on smartphones. Riders may book a driver this way, and drivers will receive a booking on their own app. This technology also allows Lyft and Uber to monitor the activities of the drivers through GPS tracking.
So now that you know how ride-hailing works, let’s consider why people sign up as drivers.
Why Join Ride-Hailing Business?
There are many reasons people would opt to take up such employment. The most basic reason is to make extra income.
In some cases, it could be a lucrative primary source of income. Especially if you are not already employed.
The standards for joining the business are not all that high. The biggest investment would be a car, which many drivers already own. Those without can hire.
However, some states may have additional requirements. Like New York, where drivers must also attain a Taxi and Limousine Commission (TLC) license. It is advisable to check what extra hoops you may need to jump in your jurisdiction.
Even having a felony record is not always a hindrance. Many non-violent felons have managed to pass vetting and work as drivers. In some states, offenses that are 7 or 10 years or older may not be reportable. This has allowed many to pass background checks, even with violent felonies in their past.
However, some have later had their accounts deactivated. The policy is not always clear when it comes to those with criminal convictions. Lyft has proven more forthcoming with reasons for ending contracts.
The flexibility of the job is also helpful to many. They can work around their primary jobs or school. This is why this work is popular as a side hustle.
The rates can also be quite good. Many people make tens of thousands of dollars a year from this. at a time when jobs are getting scarcer, this can be a big help.
For those that are socially isolated, it is a good way to meet people, however briefly. Even temporary connections with riders can help elevate your mood.
But what does it take to become a driver?
Requirements to Drive for Lyft and Uber
Lyft and Uber are different companies with their own standards. However, they do have some common requirements for drivers.
- Minimum age of 21 years
- Have a valid driver’s license
- Provide vehicle registration and proof of car insurance
- Undergo a DMV and background check
- Have a suitable smartphone device
- Have a vehicle that meets the company’s standards
As mentioned, some states may have additional requirements to operate as a ride-hailing driver.
When applying to become a driver, you will need to complete an online application and submit supporting documents.
It should not take more than a couple of weeks to receive a decision. The wait may be due to getting the results of the background report.
With these basics, the next concern would be earning potential. Uber and Lyft have helped many people make ends meet. But how well they pay can be the determining factor between careers.
Let’s discuss what kind of income to expect.
How Earnings Differ Between Lyft and Uber?
As said, the main reason to take up this job is to make money. The more the better. So who pays better?
This is an impossible question to answer. This is because many factors go into determining a driver’s income.
Firstly, there is the ride itself. Depending on the time of day, pick-up and drop-off destination, and class of car ordered, the rates will vary. And these are just a few factors that go into calculating what rates will be charged.
Even the sign-up bonus can vary depending on when you join the services. Uber offers sign-up bonuses to new drivers. They can earn an extra $500-$1,000 for their first 50-100 rides in the first month.
Lyft also has its own sign-up bonus policies. The amount and the corresponding number of rides can however also vary with time.
So given the wide variation, it is impossible to determine which provide pays better. Even when just looking at full-time drivers.
Determining profit is also made harder when you factor in varied costs. From fluctuating pump prices and self-employment taxes to insurance and parking fees, the figures are different, person to person.
Perhaps the best way to look at this would be to consider the company’s cut.
Service Fee Differences
Lyft takes a 20% fee off the fare. This is similar to what UberX charges. UberX can however be higher in some states like California where it is pegged at 25%.
Those driving luxury vehicles for such services like UberSUV and Lux can however attract a higher fee of about 28% in some states.
However, even service fees can vary depending on state tax rates and airport surcharges. Tips and toll charges are however excluded from this calculation. The service fee is a variable amount that can fluctuate between trips.
The popularity of certain apps can also influence incomes. In some places, Lyft is the preference, while in others Uber is more sought after. That means you may face more demand for service on one app over the other.
Keep in mind that Uber is targeted at the luxury and professionals market. Lyft is more community based and laidback.
Ultimately those that make the most are those that understand how to maximize their income. While minimizing the associated costs.
Tips to Making the Most from Your Rides
It pays to avoid traffic jams. Ride-hailing services fix the charges even before the ride commences. This is a big part of how riders choose their vehicles.
For the driver, this can be bad news if you hit unexpected traffic. You cannot adjust the rate due to the delay. You will however lose fuel money as your vehicle idles in traffic for a long time.
So avoid rides during peak traffic periods where you know there will be jams along the way.
You also burn fuel money when you drive around looking for rides. This adds unnecessary numbers to your mileage too. Find the cheapest parking in a busy area near your last drop-off and wait.
To make the most of rides back home, use specialized modes. Both Lyft and Uber apps have features you can use to tailor your rides along specific routes. This can allow you to make money all the way home or on a return trip from a distance drop-off.
The convenience of ride-hailing apps has helped make them more dominant that traditional taxis in many markets. This trend is unlikely to change any time soon.
But popularity alone should not be reason enough to choose this as a career. Crunching the numbers can help in working out if you are opting for a better option.
Whether you are a felon or not, there are many jobs and industries to choose from. You should consider not just the return, but also your job satisfaction in arriving at a decision.
Driving an Uber or Lyft can be lucrative. You can easily sign up for both as the requirements are often similar. Just remember to go offline on the other app when you book a ride.