Ready to sign up and drive with Lyft? Click here to see what their current bonus is in your area. For example, I see a $350 bonus for new drivers in LA after 210 rides.
And if you haven’t signed up for Uber yet, you can get started by using our affiliate link here.
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And if you haven’t signed up for Lyft yet, click here to see what their current bonus is in your area. For example, I see a $350 bonus for new drivers in LA after 210 rides.
Whether you’re looking for a side hustle or a new job, Lyft offers an excellent way to make extra money by creating your own unique schedule. But, still wondering, just how much do Lyft drivers make?
Because people always need a reliable and affordable way to get around the city, driving for Lyft brings endless money-making opportunities.
However, people are intrigued to know whether Lyft lives up to the claims made in the ads or if it is just another fad. How much do Lyft drivers make is one of the most common concerns of people wanting to drive for Lyft.
Various factors go into the overall earnings of a Lyft driver. A look into Lyft’s driver pay structure will reveal more.
How Much Do Lyft Drivers Make?
- Indeed reports that Lyft drivers earn around $68,725 in the US annually.
- Glassdoor reports that Lyft drivers earn around $41,259 in the US annually.
The precise amount of money Lyft drivers make varies, as you can see, and depends on several factors, but one big factor is location.
For example, one driver says that different parts of the Bay Area (Northern California) make much more than other areas. The driver noticed his weekly earnings significantly increased when he worked in highly populated metropolitan areas such as Oakland, San Francisco, and Berkeley.
In addition, other Lyft drivers have told us that they drive all the way to these metropolitan areas because they live in suburban cities that have little to no ride requests.
Calculating Lyft Driver Pay
An important aspect to note is that you aren’t Lyft’s employee when working as a driver for Lyft. This means the federal minimum wage regulations don’t protect you.
Put simply, there’s no legal restriction on how little you can make as a Lyft driver.
Essentially, you can break down your earnings into time, distance, tips, and bonuses.
Your Lyft Dirvers Pay Equals:
- Time: You receive per-minute pay when there’s a customer in your car based on your city’s per-minute rate +
- Distance: You earn based on miles like a standard cab based on your city’s per-mile rate +
- Tips: If a satisfied customer chooses to tip you, you’ll get to keep all of it. In other words, you do not have to pay any sum to Lyft +
- Bonuses: Lyft drivers also receive bonuses when the demand for rides is highest. Rewards, however, also depend on specific areas. Therefore, the money you generate from bonuses varies.
Lyft Driver Pay Determinants
A few Lyft drivers might make more than others. This happens because some factors determine the precise pay by the end of the day. These include:
1. Surge Pricing
Surge pricing is a dynamic pricing model where the Lyft app drastically increases the ride prices at specific times and in certain areas where more individuals want a ride simultaneously. On top of that, there are limited Lyft drivers to cater to everyone’s needs. Therefore, you’ll naturally earn more if you frequently encounter surge pricing.
2. Location
Lyft fluctuates the sum riders pay based on the departure and arrival location. These changes impact your total earnings as a driver. Therefore, you may earn more from a specific trip due to zone-based bonuses, while another ride may make you less.
3. Driver Bonuses
Lyft also offers several bonuses to its hard-working drivers. However, the rewards are condition-specific:
- Real-time: You may stumble upon these bonuses when there’s a spike in demand for rides in an area you’re currently driving in.
- Scheduled. The app announces these bonuses at the start of the week. This enables you to plan an ideal location and time to work.
- Bonus Zones: Bonus Zones will appear as pink or purple areas on your map. Once you drive into a bonus zone, you unlock the bonus for your next ride requrest.
- Ride Streaks: The app offers this bonus to Lyft riders who accept one ride after the other during peak hours – high-demand times. If you do not take breaks and keep riding back to back, you’ll be eligible for Ride Streak.
- Streak Zones: Check your map in advance for where Streak Zones will be, it will show you the busiest place near you. Accept every ride in the zone until you have reached the required number and get your bonus.
- Earning Guarantees: This ensures you make a specific amount of money on completing a certain number of rides in a given time.
- Ride Challenges. If you complete a specific number of rides in a given time limit, you’ll get the Ride Challenge bonus.
Lyft Driver Expenses
The amount you make yearly also depends on your expenses. For instance, you won’t need to pay for the lease if you own a vehicle.
However, if you’ve leased one, the payments would take a bit off your annual earnings. Likewise, the actual Lyft driver pay is determined by several factors.
1. Car Maintenance
If your vehicle is in shape, you do not need to pay for regular maintenance. However, you’d need to go for an oil change and frequent repairs by the end of the day; it ensures a safe drive.
2. Phone Bills
You must have a reliable data plan to accept rides everywhere. Compare several packages and opt for a plan with maximum data to let you work consistently. Lyft won’t cover this expense.
One driver says that he has encountered numerous incidents where he was unable to accept/decline a ride due to limited service availability. We advise new and even experienced drivers to invest in a cellular plan that has the best coverage. Verizon is considered to be the best cell service provider in the U.S.
The fewer issues you have with cell service connectivity, the better experience you’ll have and the more money you’ll make. Dropped rides and incomplete rides due to lack of cell service can make a significant impact on your weekly earnings!
3. Insurance
You must have car insurance to work as a Lyft driver. Plus, the insurance must align with your state’s requirements. Otherwise, you won’t be able to drive for Lyft.
Car insurance should be in accordance with state requirements. For example, California requires Lyft drivers to obtain specific car insurance in order to be covered while driving for Lyft.
If you are driving for Lyft and do not have specific car insurance as a rideshare driver, you may not be covered for any accidents during your shift regardless of who is at fault.
4. Tolls
Lyft doesn’t pay the tolls for you. Instead, you have to cover the toll costs from the money you earn. You may choose to decline roads that take you the toll route. However, it’ll only lower your earning potential.
5. Taxes
When you drive for Lyft, you are considered an independent contractor, which is considered a small business owner. Therefore, you must pay the income tax to the Internal Revenue Service (IRS).
Also, note that employees’ income tax rate differs from that of independent contractors. For instance, you must pay self-employment tax if you make more than $400 annually.
Overall, you give 7.65% more federal tax as a contractor than you would have given as an employee. That, by no means, indicates you’ll pay a larger sum. It’s because you can deduct the total expenses (mentioned above) from your taxable earnings and minimize the tax.
You must be responsible as a Lyft driver and understand the state and federal tax laws. Otherwise, you may run into penalties from the tax agencies.
How Do Lyft Driver Payments Work?
There are a couple of different options when it comes to getting paid by Lyft:
Direct Pay
Direct Pay is through the Lyft Debit Card. It lets you receive instant payments without fretting over bank processing times. What’s more, it offers cash back rewards on groceries, restaurants, and gas. The app doesn’t require paying any fee for account maintenance, and you can withdraw cash from any ATM.
Express Pay
An unexpected expense might hit you, and waiting for the regular payday seem impossible. Luckily, Lyft allows you to request payment anytime using the app. Again, the bank might take a day or two to process the transaction, but the app will generate the payment soon after your request. This option will cost you an $0.85 fee.
Weekly Pay
A bank transfer is the easiest payment mode if you have an active bank account. Simply provide your bank account information to Lyft and receive money weekly on Tuesday morings.
However, ensure you know how long your bank takes to process payments. This way, you’ll know which day of the week to expect the money.
How to Make More as a Lyft Driver
How much Lyft drivers make depends on how well they understand the money-making factors and use them to their advantage.
A Lyft driver who hasn’t ever explored the app and isn’t familiar with the bonuses the app offers won’t ever make money from the offers.
On the other hand, someone who stays up to date and tracks the bonus opportunities would likely earn more.
Here’s how else you can make more money using the Lyft driver app.
1. Drive More
The time you spend driving is the only aspect in your control. The more time you spend driving, the more money you’ll make. Because the app doesn’t pay you for waiting for the customer, the key is to drive with a paying customer.
Consider increasing your hours in specific areas with more driver demand. However, because driving while exhausted can be hazardous, the app puts a cap on the hours you can drive weekly.
So, make sure you read the hour limit. Plus, rest well before heading out for driving every day.
2. Create a Plan
Make sure your work hours do not overlap with the high-demand times. Otherwise, you’ll miss out on money-making opportunities. This is crucial for those using Lyft as a side hustle. You must strategically plan your driving times to take advantage of the peak, high-demand hours.
3. Use Prediction Tools
It goes without saying that you can maximize your earnings by driving during high-demand hours. The Lyft app has a few tools that help predict the high-demand hours in your city at a specific time.
You can use the real-time demand map to ride through the areas with more demand at a particular time during work hours.
Plus, you can also benefit from demand forecasts based on historical patterns. They allow you to select the best days and timing to boost your earning potential.
4. Take Advantage of the Bonuses
Do not forget to monitor the available bonuses, from Ride Streak to Ride Challenges and Earning Guarantees. The Lyft App compensates drivers by offering several types of bonuses. You can take on the challenge and earn more.
5. Ready to sign up and drive with Lyft?
Ready to sign up and drive with Lyft? Click here to see what their current bonus is in your area. For example, I see a $350 bonus for new drivers in LA after 210 rides.
And if you haven’t signed up for Uber yet, you can get started by using our affiliate link here.
Frequently Asked Questions
Can you make a living driving for Lyft?
If you want to drive full-time and during high-demand hours, you can make a living off Lyft just enough to support yourself and your family. You can make money from surge pricing and earn bonuses. However, realistically speaking, it may require you to work on weekends and even on holidays. High-demand hours vary and are only available in small time frames during the day, specifically on weekdays.
Does Lyft offer drivers an option to rent a vehicle?
Yes, Lyft offers rental cars to people who cannot afford to purchase one. The platform has partnered with Hertz and Flexdrive via the Express Drive program.
Does Lyft pay for accidents?
Lyft pays up to $1 million for vehicle damages and injuries if a driver meets an accident. So, it provides insurance to the drivers and covers related costs. However, the precise amount depends on terms of service and is contingent on the time of the accident. The claims are submitted to the insurance company, and then Lyft determines whether it’ll cover the damages.
When can I expect to earn after signing up as a Lyft driver?
Once you enter your credentials and the platform approves you, making your first income won’t take more than 30 minutes. However, Lyft determines your vehicle’s road readiness and runs a background check, and this process can take a few days.
How can I sign up to drive with Lyft?
Click here to see what their current bonus is in your area. For example, I see a $350 bonus for new drivers in LA after 210 rides.
And if you haven’t signed up for Uber yet, you can get started by using our affiliate link here.
