Technology has advanced in many ways in the last decade, resulting in tons of new businesses and income streams. One of these includes ridesharing organizations that use applications to connect riders to drivers. A few of these companies provide this service around the world, one of which is Lyft.
Lyft is one of the most popular ridesharing companies in the US, with many people using it as a source of income and a mode of transportation. It’s no surprise that more people are becoming interested in working for Lyft and are curious about how much money they can make on the platform. Keep reading to learn more about becoming a Lyft driver and how much you could earn.
What Is Lyft?
Lyft is a technology company that creates, markets, and operates mobile apps that connect drivers and riders. The app also provides services like vehicle rentals, motorized scooters, bicycle sharing, car rentals, and food delivery. As a customer, you must first download the app to your device, create an account, and then request a ride.
As a driver, you have to complete an application process and begin connecting with riders. Logan Green founded the company in 2012 and it is headquartered in California. It is the major competitor of Uber and one of the largest ridesharing companies in the world. It operates across many cities in the United States and Canada.
How Does Lyft Work?
Lyft works by using its mobile app to connect drivers and riders. As a rider, you must install the mobile app, create an account, and request a ride when necessary. The app will connect you to a driver who is nearby and will allow you to track the driver’s movements as well as contact the driver if necessary via the app’s text feature.
As a driver, you must register with the company and follow the necessary procedures. When that is completed, you will be able to connect with other riders in your area. The app allows you to see the rider’s pickup location and has a feature to help you navigate for those unfamiliar with the area. This helps to avoid any confusion between the two parties.
How Much Can You Actually Make on Lyft?
You can make an annual salary of $38,493, with the top 10 percent earning approximately $59,000 and the lower 10 percent earning about $25,000. According to reviews on Glassdoor, the hourly earnings are between $12 to $21 per hour. The company has a base per-minute rate for all of its drivers.
These figures can differ based on several factors like the driver’s working hours, hourly rate, location, and rating. As a full-time driver, you will earn more than a part-time driver. There is also the advantage of Lyft incentives and perks like getting driver discounts.
The Pros and Cons of Working on Lyft
Working for a company like Lyft has advantages and disadvantages that influence people’s decisions about whether or not to work for the company. The following is a list of the benefits and drawbacks of working as an average driver on Lyft.
Pros of Working on Lyft
- Flexible schedule. The best part about working as a Lyft driver is the flexible hours because you can choose your working hours. It is a part-time job that allows you to set your own driving schedule based on what works best for you. The flexibility allows you to pursue other entrepreneurial ventures or freelance jobs.
- Instant payment. Lyft operates in such a way that drivers can choose to receive their daily earnings immediately rather than wait two weeks by selecting the Express Pay option. This feature has a $0.50 transaction fee and is only available to drivers who have earned up to $50 in mentor payments, referrals, and earnings.
- Earn more during peak hours. With Lyft, you can set your schedule to work more during peak hours with more ride requests. This is because the price rises as the demand for rides rises. This is the advantage of surge pricing. You can use the driver app’s feature to see where there will be more requests around you.
- Initial sign-up bonus. This is a feature that Lyft provides to new drivers to help them earn more while remaining productive. Drivers who complete up to 125 rides in their first 30 days are eligible for a $1,000 bonus. You will also receive a performance-based bonus based on various factors, including how well riders rate you.
- Vehicle rent or lease. This means you don’t have to own a personal vehicle to join this company. You can rent or lease a car until you can afford to buy your own. Lyft provides a service where drivers can rent a car from them for no upfront cost and pay based on their earnings. You can also return the car if you don’t need it full-time.
Cons of Working on Lyft
- Car payments. To begin working as a Lyft driver, you must own a car that meets Lyft’s vehicle requirements or you must be able to afford to rent a car from the company. You will also have to account for the cost of gas for your vehicle.
- Car maintenance. Due to the consistent use of your car, you will have to run a lot of car maintenance to avoid a complete breakdown. Maintenance costs are not cheap and are entirely the driver’s responsibility.
- Insurance. The driver is also responsible for the insurance costs. This means that any accidents that occur during your trip to you, your car, or your rider are your responsibility. To begin working with the company, rideshare drivers must have rideshare insurance. Drivers will have to pay additional money as a result of this.
- Taxes. The earnings do include taxes, which you must pay on your own. You will be required to pay a self-employment tax, as well as social security and medicare taxes. This means that drivers will have to set aside money for taxes and other bills because they are on contract and not company employees.
- Terms and conditions. Every rideshare company has terms and conditions that drivers must agree to before they begin their contract with the company. These terms and conditions may be quite frustrating for some as they also change frequently and must be adhered to by all drivers.
How to Become a Lyft Driver
There is a process that you must follow to become an official driver with Lyft. This section covers this process in detail.
1. Online Application
You must first complete an online application, which requires you to submit a valid driver’s license. The company will conduct a background check to ensure that you do not have a past of dangerous behavior. You must also submit your insurance and vehicle registration. You may be asked to complete a vehicle inspection to ensure that your car that meets all the requirements.
After completing your online application, background check, and vehicle inspection, you will be approved to begin working as a Lyft driver. You can only get approved if you pass your background check, submit all required documents, and pass the car inspection.
3. Start Earning
Once you’ve been approved, you can start driving and earning money with Lyft. You must download and install the app and have the Lyft emblem and other documents in your car. You can then create your work schedule and begin receiving rider requests.
How to Make More Money on Lyft
While you are guaranteed to make money as a Lyft driver, there are some strategies you can use to boost your daily earnings. This will undoubtedly require more effort on your part, but with the right approach, it is guaranteed to work for you. Some tips are provided below.
Work During Peak Hours
There are certain hours of the day, like rush hour or late on the weekends, when you are guaranteed to get more rider requests. These are also times when you are likely to have surge pricing. You are more likely to earn more if you position yourself to work more during these busy times and in busy locations. You can find your peak hours on the Lyft app.
Drive in the City
It should be no surprise that you will encounter more riders in the city than in rural areas. This is because they are busier than suburban areas, allowing you to drop off one passenger and pick up another right away. You can also get longer trips, which means you can earn extra money.
Take Advantage of Lyft Incentives and Perks
Lyft offers many benefits and perks to its drivers. You can get discounts and coupon codes from the company for friends or other drivers who may have access. This helps to give you a boost and earn an additional bonus. You can also provide referral codes or coupon codes to riders, leading to higher ratings and tips.
Keep Your Insurance Policy Updated
Having an updated insurance policy can save you a lot of money in the long run. It will enable you to spend less and earn more. While it is easy to forget to update your insurance policy or choose a less expensive policy, an updated rideshare policy is the best option. With the right coverage, you will be protected in times of accidents or any damage to your car.
Schedule Your Car for Regular Maintenance
Due to the frequent use of your car, you are bound to encounter some issues from time to time. However, with regular maintenance, these issues can be detected in time, saving you from extra costs and vehicle depreciation. In addition, a well-maintained vehicle may result in higher ratings and tips from riders.
Maintain a High Driver Rating
Maintaining a good profile will result in a higher driver rating and more tips from customers. The best way to keep your driver ratings high is to be polite to your customers, offer them drinks and snacks, phone chargers, know the fastest routes, and drive well. Maintain a clean, neat, and odor-free vehicle, and contact your passengers if you cannot locate them.
Drive Less and Earn More
This simply means that you should position yourself in an area where you are more likely to get riders in between trips. This will allow you to save gas expenses and spend less time driving when you need a rider.
Is Working on Lyft Worth It?
Working on Lyft is worth it for anyone who wants extra cash or needs a flexible job. According to the Glassdoor report, the average income of a Lyft driver is about the same amount as the minimum wage, making it a reasonable source of income for anyone looking for a job. It is even better for those who need a part-time job or a side hustle.
Making Money on Lyft FAQ
Yes, you can. Glassdoor reports that you can make average annual earnings of $38,493 as a Lyft driver. With the right approach, you could earn more and be among the top 10 percent with an annual income of about $59,000.
You can make $500 a day with Lyft depending on the kinds of trips you get. Although, it is not likely to be a daily occurrence. Lyft offers a $500 guarantee weekly for drivers who complete up to 50 rides during the Lyft week.
Lyft drivers get paid based on the payment option they choose. They have the option to choose instant payment, weekly, or biweekly payments.
According to Glassdoor, Uber drivers earn an average of $20 per hour compared to Lyft’s $17 per hour.
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