At The Rideshare Guy, we’ve been covering rideshare and delivery apps since 2015. We’ve tried and tested dozens of different delivery apps ourselves, but being a Lyft Driver still remains one of our favorite ways to make money today.
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.
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.
What Is Lyft?
Lyft is a riding app that lets you be your own boss. It works like a cab service. The only difference is that it connects drivers via an app. This makes riding more convenient for people willing to travel within the city.
A sign-up is all it takes for people to choose their driver and commute to the desired location. On the flip side, drivers need to sign up, set their flexible work schedule, and get paid instantly. You get to keep the tips, generate income, and take cash out per your preferences.
The onboarding process for Lyft is swift and convenient.
The background check is almost instantaneous and the rest of the onboarding consists of just a few days.
This is much shorter than Uber’s onboarding process,which can take at least a week and a half to complete the entire onboarding process.
How Much Do Lyft Drivers Make?
The precise amount of money Lyft drivers make depends on several factors (more on this below). Indeed reports that Lyft drivers earn $32,165 in the US annually. Glass Door, on the other hand, mentions the highest yearly salary of $49,928 for Lyft drivers.
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 distance, tips, bonuses, and time. Here’s how:
- Distance. You earn based on miles like a standard cab. Therefore, it varies by the city for every mile of the ride – from the moment you pick up the rider to when you drop them off.
- Time. You receive per-minute pay when there’s a customer in your car. This means if you’re stuck in the traffic and not covering the distance, you’re still making money.
- 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.
- 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.
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:
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.
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.
Lyft also offers several bonuses to its hard-working drivers. However, the rewards are condition-specific:
- Ride Streak. 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.
- Scheduled. The app announces these bonuses at the start of the week. This enables you to plan an ideal location and time to work.
- Ride Challenges. If you complete a specific number of rides in a given time limit, you’ll get the Ride Challenge bonus.
- 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.
- Earning Guarantees. This ensures you make a specific amount of money on completing a certain number of rides in a given time.
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.
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.
You must have a reliable data plan to accept rides everywhere. Nothing is more annoying than failing to accept the ride due to data restrictions. Make sure you do not rely on Wi-Fi because it isn’t available everywhere.
Compare several packages and opt for a plan with maximum data to let you work consistently.
Again, you must pay the phone bills; the Lyft app won’t cover this expense.
One driver says that he has had 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 less 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!
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.
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.
Employees do not have to pay the income tax themselves. Instead, it is automatically deducted from their monthly earnings.
However, independent contractors are considered small business owners. 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.
When Does Lyft Pay the Drivers, and How do the Payments Work?
Lyft generates weekly payments every Tuesday. Depending on your bank, you may get the earnings within one or two business days. Expect to receive your income on Wednesday, Thursday, or Friday.
However, Thanksgiving or Christmas holidays may delay the payments. If, however, you want to avoid the hassle of delayed payments, consider requesting your earnings via Express Pay. It will expedite the payment process.
However, you’d still need to wait for the bank to process the payment.
Further, you have multiple options to receive your payments.
Lyft Debit Card
Lyft Debit Card 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.
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.
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.
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.
How to Make More as a Lyft Driver?
How much do 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.
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.
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.
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.
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.
Lyft Driving: Is It Worth It?
There isn’t a simple answer to “How much do Lyft drivers make?” The answer varies depending on your location, bonuses, and market demand.
Of course, a high-demand month will make you more money than one with minimal consumer demand. The key is to follow the strategies to maximize your earnings.
Driving for long hours is by far the best way to increase your earning potential. So, yes, Lyft driving app is worth the effort, and you can make it your primary earning source through hard work, resilience, and dedication.
One driver says that from their own personal experience as a Lyft Driver, “it is definitely worth it if you have a strong and consistent work ethic. It will fall apart if you don’t remain disciplined and consistent throughout each week. This requires a lot of dedication and patience due to the inconsistency in ride requests each day. Drivers need to be ready to work longer than normal hours to earn enough income to support a family. “
Can You Make a Living With 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 weekdays.
Does Lyft Offers 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.