Contents:

8 min read

    8 min read

    Harry here.  Just a year ago, there weren’t many rideshare specific options for drivers looking to lease or rent a car.  But today, both Uber and Lyft now have flexible leasing/rental programs, and there are a whole host of start-ups looking to provide flexible options for drivers.

    This is good news in my book as I suspect a lot of drivers aren’t realizing just how much money it’s costing them to operate their vehicle.  The nice thing about a lot of the new leasing and rental programs is that they are flexible, affordable, and you see all your costs right up front.  Today, RSG senior contributor Christian Perea takes a look at Lyft/GM’s foray into rideshare leasing: Express Drive.

    GetUpside Gas App

    If you’re looking for a comprehensive list of all the leasing/rental options available for rideshare drivers, please check out our new Uber and Lyft Vehicle Marketplace page.

    A few weeks ago, Lyft announced Express Drive. Express Drive is like Express Pay except when you have accumulated $100 in fares, you can instead simply tap the “Express Drive” button within the Lyft app to have a Chevy Equinox airlifted directly to your GPS location via a CH-53 within around 20 minutes. It’s worth noting that there is still a 50 cent fee and those can add up after a while.

    Express Drive

    I don’t think the fee covers the cost though…

    Okay, so I lied about the first part. Pardon my immaturity.

    In reality, the program is a strategic partnership with General Motors and is actually a pretty significant for just under three months of work. It aims to provide vehicles as rentals to drivers for as little as one week and as long as 8 weeks. Lyft will be launching this first in Chicago and then Baltimore, Boston, and Washington D.C. shortly afterwards — with the intentions of rolling it out to other cities within the year.  Express Drive initially intends to offer an option for those who are unable to drive because their car is too old, has 2-doors, or is non-existent.

    Is Express Drive A Big Deal For Drivers?

    It’s actually about as close to a free rideshare vehicle as you can get. The rental price will be based on a tiered system around the number of rides a driver provides. The number of rides required will vary by market though. Here is the tiered setup for Chicago:

    $99/week + $0.20/mile if under 40 rides

    $99/week flat if 40 rides or above.

    $0 if 65 rides or above.

    Note: As of 9/19/2016 these prices have changed.

    So as far as the cost to operate and own a vehicle, this seems like a pretty good deal. Other leasing options are more expensive and would likely require you to drive a great deal to justify the $120-$200 weekly lease. Beyond that, options like Breeze or Xchange Leasing still expect you to pay for your own insurance and maintenance like brakes and tires. It appears that Express Drive covers ALL of that.

    When you are no longer stressing about whether or not your transmission will blow up before you can pay off your car, it makes driving more enjoyable. Now those cheap ride payouts will go mostly towards your pockets instead of your tires.

    Sounds almost too good to be true right? We’ll get to that in a minute 😉

    What Is Included In The Express Drive Rental?

    A Chevy Equinox: Okay, so you probably didn’t have one of these as a poster on your wall as a kid. That being said, it looks more roomy than a Prius and sits much higher. So it should be interesting to see how comfortable it rides. I am going to assume that the rental will be the base version, which has a 4-cylinder rated at around 180hp mated to a FWD transmission. Gas mileage is reported as 22 city and 32 highway. Obviously since this is not a hybrid or Prius, you should expect to pay more in gas though.

    Equinox

    Looks all right.

    Insurance: When logged into driver mode, the rental falls under Lyft’s insurance in a similar fashion to any other car on the platform ($2500 deductible). When  you are logged off, the insurance switches over to the insurance that is provided through the GM/Maven rental side ($1000 deductible). So basically the insurance is always provided by Lyft/GM.

    Maintenance: Maintenance is handled solely by GM and it’s supposed to be all inclusive. If a passenger damages the vehicle via vomit, you simple take it in and get a new one. It also covers brakes, tires, shocks and all that other stuff. Drivers are expected to return their vehicles every 8 weeks for maintenance and cleaning.

    Term: 8 weeks max per vehicle. When your term is up, you can return the vehicle for a different one.

    The Catch: $0.25 for miles driven outside of Driver Mode

    Any miles driven outside of Driver Mode will cost $0.20/mile regardless of how many rides you do. This means that even if you give 120 Lyft rides in a week, you will still be charged for any distance that is not in driver mode.

    Double Dipping: If you end up using the rental to drive for Uber or delivery it will incur a $0.20/mile charge. So that sort of eliminates double-dipping between platforms.

    Submarine/Stealth Mode: It also means that if you tend to logout of driver mode to head towards busier areas, you will still incur that charge in the process. Unless you…

    Use The Destination Filter!

    According to Lyft, miles driven while using the destination filter will not be billed as “personal” miles. This means that anyone in the program is going to get intimate with the fine details of the destination filter. As far as I know, it can only be used 3 times a day.

    Commuting: Many people commute to the area they drive in. Many people also like to logout of driver mode when they decide to make the long commute home. Since we have confirmed with Lyft that destination filter will count as “Lyft” miles, commuters should set their filter to prevent themselves from getting charged. This is important because many drivers commute a great distance to begin driving, since most can’t afford to live in the city.

    Update 09/12/16: Destination Filter rides and miles will now count as “personal miles” at $0.25/mile.

    Power Driver Bonus/Hourly Guarantees: Those who use the rental will not qualify for the Power Driver Bonus to earn their commissions back from Lyft. They also will not qualify for average hourly guarantees. Guaranteed Primetime and tips should still payout like any other ride though.

    So you won’t be able to hop in your Lyft rental and drive to Canada or take it on long road trips. Clearly, this program has been designed to make sure that those who use it will be driving primarily for Lyft and switching loyalty will exact a hefty price in the process.

    Much Lower Expenses, But You Must Drive Mostly Lyft

    To compare costs, I delved into our trusty driver model that we built out using QuickBooks Self-Employed and adjusted expenses accordingly. The result was that using Express Drive and meeting the ride goals to waive the rental fee dramatically lowered car costs while increasing the costs in the fuel category when compared to a 2014 Prius. The overall effect was the elimination of an auto loan ($4,700/year), Insurance ($1,492/year), Maintenance (~$1500/year),  and Registration (~$200). I didn’t include depreciation costs, but those are also a big factor. Further, the difference in gas costs is much smaller for those who wouldn’t drive a hybrid in the first place.

    Note: Don’t forget about the $0.20/mile cost for non driver-mode miles. For the Express Drive math, we assumed that the driver would drive 48,360 miles a year and that 20% would end up being calculated as personal use, and thus adding $1934 in rental costs. Even under this scenario, business spending was only $14,992 for an Express Drive model versus owning a 2014 Prius ($20,075) and a typical rideshare lease ($27,010)

    Related: How Much Does It Really Cost To Be A Rideshare Driver?

    Here is our comparison of costs using QuickBooks Self-Employed between Express Drive, Traditional Financing, and A Rideshare Lease.

    If you would like to get a good grasp on your income, expenses, and taxes you can actually sign up for a free trial of QuickBooks Self-Employed here and make sure that you enter our $2,000 ‘Win Back Your Expenses Giveaway’ at the bottom of this post.

    👉Related article: Essential gear every rideshare driver should have

    My Take

    Express Drive makes a lot of sense in markets where Lyft and Uber are competitive on ride volume. The nature of the program definitely ties you to driving almost solely with Lyft to avoid those mileage charges though. So if you are in a market where Lyft isn’t comparable in volume, it may be hard to tie yourself to one option. Even if it costs less.

    The program definitely seems like it would be much less stressful for a full-time driver even if it meant giving up the Power Driver Bonus and Average Hourly Guarantees because you are only really worrying about gas and the miles logged outside of driver mode. If the program came to San Francisco, I would definitely sign-up to avoid putting miles on my personal vehicle.

    The program is still in its early phases, and we will make sure to keep you updated as it grows and details become clearer.

    Drivers, what do you think about Lyft’s new Express Drive Program?  Does it sound like something you would sign up for?

    If you’re looking for a comprehensive list of all the leasing/rental options available for rideshare drivers, please check out our new Uber and Lyft Vehicle Marketplace page.

    Burnt Out Talking To Passengers? Deliver Food With Caviar!

    caviar_logo

    Make up to $25/hour. No minimum hours required, work outside, and get paid weekly. Click to Sign-up!

    -Christian @ RSG

    Christian Perea

    Christian Perea

    In 2014, Christian left his job at a mental health center to drive full time for Lyft and Uber. Since then, he has driven for mostly Lyft with a little bit of Sidecar and Postmates thrown in for experimentation and Uber when he doesn't feel like talking to people. He likes to talk about Politics and Economics over a good beer to whoever will listen to him.

    Share Post