At RSG our main goal is to help drivers earn more money when they are shuttling passengers around. But what happens when drivers feel trapped by one company over the other? Are Uber and Lyft really trying to keep you on their platforms exclusively? Senior RSG contributor Sergio Avedian explains how Uber and Lyft compete for drivers below.
I was idle for almost two years due to the pandemic. I was burned out like many others were from driving strangers around for what seemed like a grind. Endless rate cuts and an oversaturated marketplace (Uber 60 cents/mile & 21 cents/minute – Lyft 80 cents/mile & 12 cents/minute in Los Angeles) felt like I was fighting for crumbs left on the table during family dinner with 10 kids.
The pandemic forced me to look into other avenues of income like it has with many other drivers, hence the driver shortage.
But when Uber and Lyft came calling with hefty bonuses, I listened. I don’t drive for a living but I also don’t say no to easy money!
My attitude towards Uber/Lyft these days is “SHOW ME THE MONEY”, and I will drive for you a few hours a week. Extra cash never hurts anyone!
But does one platform try to keep a stranglehold on drivers? Here’s what I found when I went back to driving for both.
How Uber and Lyft Compete for Drivers: Bonuses
Uber and Lyft send their drivers endless messages through the app or e-mails or via text to remind them of the upcoming bonuses/incentives. If you are only on a single platform, you may be missing out on the hefty bonuses I received by both companies in consecutive weeks.
Doesn’t it feel like the more you drive for them, the less they offer you, and the less you drive for them, the more they want you?
Driving over the past few weekends, I figured that there are many gaps in Uber and Lyft’s bonus structures during a shift. Why not take advantage of it by raising your utilization rate and making as much money as possible by switching between platforms? After all, we’re all independent contractors – that’s what Uber and Lyft want!
In Los Angeles, Uber is winning the war for drivers. I have enjoyed the incentives offered to lure me back in.
How Uber’s Bonuses Try to Lock Drivers Down
Uber tries to compete for its drivers by multiple and overlapping bonuses it offers. But I think the main objective is to lock that specific driver down by breaking the week into two parts, from Monday-Friday and Friday-Sunday and prevent him/her from switching to other platforms.
The way weekly and weekend Quests for extra cash are structured accomplish this.
Then there are consecutive ride bonuses (CRBs). The one downside about the CRBs Uber offers is that the first trip has to be accepted within a specified zone.
Another thing I figured out is that Uber algorithms will make you work for that Quest and CRB money by sending you some super long pickups that you would not have accepted otherwise as well as long trips that will take you out of the hot zone.
How Lyft’s Bonuses Try to Lock Drivers Down
To be honest, Lyft is not as aggressive as Uber when it comes to locking the driver down with hefty Quests or CRBs.
Lyft deploys a staggered Quest strategy, and the more you stay on its platform, the more you’ll make.
Lyft’s driver advantage over Uber is that its consecutive ride bonuses don’t have to start in a specified zone in Los Angeles. This may be beneficial to a lot of drivers who live outside city limits.
Lyft also does offer a lot of guaranteed earnings, such as the ones I received recently below (70 rides for $910).
Mind you, this is a guarantee, not a cash bonus like Uber’s Quest. It is difficult to pull off 70 rides on a weekend. This may give the driver a sense of security, but if you are an experienced driver, you would never choose this option to get locked down on a single platform.
My Results Driving on Multiple Platforms
Recently, I drove for Halloween, and driver earnings were through the roof in Los Angeles. I strictly chose to drive for Uber because it offered me better incentives and the results were nothing short of extraordinary.
However, I knew that bonuses offered by Uber and Lyft would be at a minimum following that period. I was right – Los Angeles was tired from three days of partying.
Since I drive on both platforms, I tried to maximize my utilization rate and earnings by switching between the two platforms. As I previously mentioned, there are gaps during the day where one company does not offer incentives but the other one does, so take advantage of being on multiple platforms.
Here are the results with low bonuses, CRBs and almost no surge to speak of – overall, I think I did OK! Why did I do relatively well? I know when and where to drive, and don’t drive ‘9 to 5 hours’. I took advantage of the gaps that existed when one company would offer me a CRB and the other didn’t.
On Uber, I averaged $43 per online and $45 per active hour
On Lyft, I averaged $33 per online and $42 for Booked hours
Takeaways for Drivers
80% of drivers quit rideshare in less than a year, so Uber and Lyft constantly have this massive hole to plug. I wonder why the executives of these companies spend billions on marketing to attract new drivers to their platforms as opposed to keeping their drivers from quitting. Why not pay the existing bunch fairly instead of peanuts? (In Los Angeles 60/21 base for Uber & 80/12 base for Lyft)
I would have thought they would run out of drivers by simple math logic. Also, the pandemic made this problem worse for both companies. I always felt underappreciated when I was a full-time driver. From unjust deactivations to rate cuts, I felt like I was an expendable commodity.
Both companies fail to comprehend that billions in stock wealth were created by the blood, sweat, and tears of the drivers. Without them, there would be no Uber or Lyft, there would be no stock options enriching company executives beyond their wildest dreams.
I am a capitalist, and all power to the founders of these companies and the VCs who invested early in them. But at some point, the current management teams of Uber/Lyft have to stop abusing the drivers!
I have always been a huge believer in multiple platform driving. Sadly, a lot of drivers choose one or the other and roll with them. I just don’t understand that thought process.
I have no preference when it comes to Uber or Lyft. As I said above, whichever outfit SHOWS ME THE MONEY, I will drive for them.
Do you drive for one platform exclusively and, if so, why?
–Sergio @ RSG