What are Lyft driver earnings?

(Harry) #1

With so many changes in Lyft's app features and services provided to customers and driver rates that frequently change due to app feature changes, as well as differences between locations, we decided to revisit the "what do drivers make scene" and see what is new at the end of 2017.

A recent survey performed by around 1,150 drivers using ridesharing apps, Lyft drivers made around $17.50 per hour with is about $2.00 per hour more than Uber drivers. The big difference came from tips, Lyft has always allowed their drivers to receive tips, while Uber only recently included the tip feature in their app. This is survey finding the exact opposite of one performed by Certify, which showed that Uber drivers earned $25.73 while Lyft drivers received 5-star ratings.

When analyzing the income levels monthly, Earnest and Technology and loan company presented a different picture; they reported that Lyft drivers earned on average $377 per month versus Uber's $364 per month. The survey shows that there is no much of a deviation between the two company income factors for drivers.

This is Earnest's list of income:

| Rank | Company | Average/Month | Median/Month |
| 1 | Airbnb | $924 | $440 |
| 2 | TaskRabbit | $380 | $110 |
| 3 | Lyft | $377 | $210 |
| 4 | Uber | $364 | $155 |
| 5 | DoorDash | $229 | $100 |
| 6 | PostMates | $174 | $70 |

The survey they researched was what drivers make not what Lyft makes, and the results speak for themselves.

This graph illustrates the percentage of monthly income earned through on-demand platforms, and it shows that most Lyft drivers monthly earnings were concentrated in the areas of $0-99, or $100-500

Now, these earnings come as a shock when compared to what has been published before and attested to by drivers on videos and in blogs. The problem with this survey is the statistical deviations, what were the hours per day per driver, did they categorize the entire group into one lump? If we single out part time to full time, will the results be apparent?

Irrelevant to these questions, what these surveys point out is that Lyft drivers make more than Uber drivers. Now it's time to leave the statistics of one and a half drivers median incomes and go to real life and study the income per driver type.

  1. Part-time drivers; these drivers tend to spend anywhere from 2 to 6 hours a day on the road, sometimes for 2 or three days per week, sometimes for 5 days.
  2. Full-time drivers; these drivers tend to spend anywhere from 6 to 12 hours a day on the road and drive every day of the year, maybe taking the occasional day off.

Unlike Uber, Lyft's driver income is calculated simply, there is a 20% flat service fee to pay, and that's it. Income is calculated on the fare, which also uses a basic model to calculate it. The additions are tips, power bonus, bonuses and customer cancellations. The rest is a mileage and hour based fee that the passenger must pay at the end of every ride.

What makes driving income for Lyft higher than Uber, is that Lyft didn't had all kinds of fees and taken from the driver, and the percentage of income is fixed. This leaves only the expenses to fluctuate, and these are variables and not constants that depend on the driver and car.

Here is a photo of a Lyft driver's income, with a breakdown in the Lyft App:

The Expenses Trap

Do you want to know what your Lyft income will be after all your expenses? Well, we calculated these down to the very level required to get an academic result, and the facts surprised us but corroborated the above survey monthly findings.

Remember the survey that stated that Lyft average monthly income was $377; well guess what, according to us, that's not so far from the truth.

• Lyft drivers earn $4.43 per hour after expenses (or $496.80 per month)

The source of information comes from over 50 different drivers input, which is considered to be a statistically viable range for extrapolating data.

The drivers supplied the following data:

  • Their reported ride income
  • The Lyft fees
  • Their total pay

Data Totals (Sigma) were:

  • Hours Worked 1,108.59
  • Completed Trips 1,959
  • Miles Driven 21,035.98
  • Fare Earnings $20,217.74
  • Prime Time $1,235.21
  • Bonus Pay $464.86
  • Bonus/Incentive $590
  • Lyft Fees $4,047.40
  • Total Income $18,460.41

Note that the total number of completed trips was 1,959 and that was completed in a very short period based on the time it took to request the data to when the trips were reported in real time.

Before we start to evaluate the expenses, let's break down the above data and reach a per hour and per mile income factor:

  • Gross Pay/Hour $16.65 ($18,460.41/ 1,108.59)
  • Gross Pay/Mile $0.886 ($18,460.41/ 21,035.98)
  • Gross Pay/Trip $9.42 ($18,460.41/ 1,959)
  • Average miles per trip 10.70
  • Average time per trip 33.6 minutes

Now that we have our basic data, we can now look at expenses and find out what the driver takes home. We will also extrapolate how much income a driver will make in an average shift of four hours.

Expenses include a plethora of details, such as direct car expenses and indirect costs from outfitting and maintaining new gadgets and items the car.

The result was found to be:

  • Expenses paid by the driver per hour: $12.21
  • Expenses paid by the driver per mile: $0.19

Now let's look at how we reached this information:

Calculations for expenses per mile for a Toyota Prius C 2017 model

  1. Car buying price $24,686 (= $685.72 per month)
  2. Annual loan interest 3.79% (=$77 per month)
  3. Annual Car Depreciation 15% (= $264 per month)
  4. Annual Car Insurance $1,350 (=$112.5 Per month)
  5. Gallon of Gas $2.35
  6. Miles per gallon 50
  7. Annual Car maintenance $800 (=$66.66 per month)
  8. Weekly Car cleaning bills $25 (=$100 per month)
  9. Three-year indirect expenditure $2,250 (=$62.50 per month)

Total Monthly Expenditure (no gas) $1368 (rounded)

Total cost per hour for a 4-hour daily shift: $3.80 (Including gas)

Total Expenses per mile $0.19 (based on 20 miles/hour)

Hourly monthly expenses $12.21 (4 hours daily for 28 days a month)

Net monthly income $496.80 ($16.65 x 4 hours x 28 day -$1,368)

Net Pay/Mile $0.236

Net Pay/Hour $4.43

Based on these calculations, let's compare them to the income we showed in the Lyft app income photo:

3 hours and 12 minutes x $12.21 per hour = $38

Gross income after Lyft expenses = $76

**Net income for those 3 hours = $38 (or 50%) **

Earning Variations

Lyft income does vary by state and city so that the above calculations might be good for CA but not for VA. No matter what the variations, at the end of the day drivers have to account for the actual car cost, the car is a tool like a jig saw for a carpenter. When you buy a tool, you factor in its full price to create an income model that repays that cost. This is the biggest mistake all car owners make; they forget to factor that car price in and tend to focus only on depreciation and other expenses. When you rent or lease a car, you include this price in and get a real income factor.

Other Income Sources

Apart from monetary income, drivers also make other income sources when driving. The make new friends, learn new things, have more experiences and in some cases also leverage their driving status to get free meals for driving tourists or passengers to a preferred restaurant, as well as earn income from referring passengers to other service providers such as accountants, insurance agents and more. Drivers in tourist locations and major cities with busy airports will usually earn more than drivers in sleepy townships. That's just the way driving works, although sleepy townships might have longer drives which generate more income than the short ten block rides in cities and are by far more relaxed.

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