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9 min read

    9 min read

    Recently, several drivers reached out to RSG for more information on the Lyft Express Drive rate cuts. These rate cuts have been taking place across the country, although the roll out has been happening incrementally. RSG contributor Paula Gibbins explains what’s happening with these rate cuts and how they could affect drivers below.

    Lyft has updated the terms on their Express Drive program, lowering distance and weekly rental rate coverage due to ‘accident insurance costs.’ Over the last few weeks, drivers from across the country have reached out to RSG via email and Twitter to point out these changes, and we’ll cover what’s going on and why Lyft is making these changes.

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    What is Lyft Express Drive?

    In a nutshell, Lyft Express Drive is a way for Lyft drivers to rent a vehicle to use for rideshare driving. You can read more about what it’s like to sign up and drive with Lyft Express Drive over at our review here. The cost of the rental comes out of drivers’ weekly earnings and saves them wear and tear on their own vehicle.

    Recently, in the San Diego area, without prior notice, Lyft lowered the distance rate for drivers using this service — to a measly 45 cents per mile.

    Looking for an alternative to Lyft Express Drive? Our vehicle marketplace will help you identify options for renting a car for Uber and Lyft.

    What Benefit Does Lyft Express Drive Provide?

    For the San Diego driver, Martin, I spoke with, Lyft Express Drive saved him from being out of a job. A window was shattered on his personal vehicle and he couldn’t afford to get that fixed, so he was going to be dead in the water without a vehicle to use to make ends meet. “I went, wait a minute, this Express Drive,” said Martin, “I can just go down and have them give me a car. I thought it was great.”

    “I don’t like that I can’t use it for Uber, but I understand,” he clarified. It’s Lyft’s deal, so limiting to driving on their platform is their right. If you wanted to drive for Uber exclusively, you could sign up with a company like Fair, which is our top rideshare vehicle rental car option for drivers.

    What Does a Pay Cut Mean for Lyft Express Drive Users?

    In San Diego, they were already earning 10 cents less per mile than users who didn’t utilize this service. Martin explained, “One thing I didn’t know until my first week there was that looking at the San Diego rate card, it paid 10 cents less than what everyone else was paying, and I was like, ‘What?’”

    “If you look at the rate cards in Los Angeles and Riverside, if you look at all those rate cards,” said Martin, “the Express Drive is the same price as the regular rides. For some reason in San Diego, it’s less.”

    Here’s a look at the rate card differences between San Diego and Anaheim:

    image of Lyft Rate card for drivers in LA

    Rate card for drivers in LA

    He decided at the time to just roll with it and work harder to make sure he was getting out there more and earning his maximum potential.

    Now, out of the blue, it’s even less. The drivers were not given prior notice of this change. They just woke up one morning and were receiving 10 cents less for a “grand” total of 45 cents per mile. To be fair though, when this cut was announced for SF drivers on May 9, they were given 4 days notice that the cut would be happening on May 13.

    “They said it was for insurance reasons, but I’m paying $243 a week for the car,” said Martin. He feels that cutting his pay on top of how much he already pays on a weekly basis to keep this vehicle is unreasonable — and rightly so.

    According to Martin, this change is encouraging him to run in the opposite direction. He’ll be leaving the Lyft Express Drive service as soon as his personal vehicle is repaired.

    Using your own personal car not an option? You may want to look into our top recommended rideshare rental company for drivers, Fair, or take a look at other vehicle options at our vehicle marketplace.

    At the new, lower rate, he has to work two 12- to 14-hour days just to make enough money for his weekly installment for renting the vehicle. That is a large chunk of his time and effort to just pay for the vehicle. Then he has to work even harder during the week to make up for that loss so he can pay his bills.

    “I’m going to ask friends and family to borrow money so I can replace my window so I can get out [of Lyft Express Drive],” said Martin. “It’s taking me two days to just pay the car off and I’ve been working 12-hour shifts. I was having a hard-enough time at 55 cents a mile, now it’s 45 cents a mile? I am just working for the car, not paying any of my bills.”

    If he worked in a different city, he might stick with Lyft Express Drive because Los Angeles and other “nearby” cities pay a much higher rate than San Diego. He’s even considered the 2-hour trek to a different city just so he can earn at that higher rate to make it all worthwhile.

    “I’m getting 79 cents a mile up there,” explained Martin. With almost double the rate in a city that’s somewhat nearby, it might be worth his time trying to drive in those areas, but again, he’d be driving out of his way to chase down the hope of getting more money. And what if something happens — like a passenger gets sick in his car — that makes the night end quickly? Then he’s two hours from home and not making any money at all for the rest of the night. Where is the line drawn? Why shouldn’t San Diego have decent rates that reflect other nearby cities? Can you really make a living on 45 cents a mile?

    Martin pointed out that it’s a bit ridiculous because 45 cents a mile is so much less than even the federal government is willing to pay for standard mileage (58 cents).

    Lyft’s Reasoning?

    Lyft cited the reason for this pay cut as being due to accident insurance costs. Does this mean that Lyft Express Drive vehicles are incurring more accidents than Lyft had anticipated and this is their solution for fixing that? If that’s the case, wouldn’t it make more sense to raise the rental cost of the vehicle instead of cutting the distance rate for those drivers? It would also make sense to do that just by an individual basis, charging more for those who have incurred damage to the vehicles they use instead of punishing every driver who uses this service.

    Also, according to Lyft’s website’s FAQ about Lyft Express Drive, if there’s damage or repairs, the renter may owe for those if they are found at fault. So, that would already be taken care of.

    When asked about the changes, Lyft responded:

    “Express Drive provides an opportunity to earn money without needing to own a vehicle – and without a long-term commitment. Due to increased accident insurance costs, the per mile rate for Express Drive vehicles will be decreasing by an average of 11 cents. We continue to be focused on building products that empower drivers to get the most out of driving with Lyft.”

    Overall Impact

    It’s likely that Lyft Express Drive will see a marked drop off in the number of drivers willing to use their service, especially in the San Diego area and any other location that may be affected by this rate change.

    If a driver can’t make payments while also making a living, the service is no longer worth it. It may also see drivers jumping ship from Lyft and going with the competitor Uber instead. Currently with Lyft Express Drive, you cannot use the vehicle for Uber as well, but only for Lyft. They might use Fair or other rental services that allow you to use both Lyft and Uber which can help them earn more in the long run.

    Another downside of Lyft Express Drive is not being eligible for Ride Challenges, which also limits a driver’s earning potential. With those limitations, it’s no wonder drivers are upset over earning only 45 cents per mile.

    For a bit of perspective here’s a comparison of Martin’s earnings at similar distances before the rate change came through and now that it’s down to 45 cents per mile:

    Earnings before the Lyft Express drive rate cuts

    Earnings before the Lyft Express drive rate cuts

    image of Lyft San Diego rate card for drivers

    Earnings after the Lyft Express Drive rate cuts

    Overall, that is a significant difference when you take into account the loss on every ride. It’s no wonder Martin is looking to get out and go back to using his own personal vehicle. Others are likely looking to do the same.

    What Can Drivers Do?

    If the rates in your city have decreased too much to make driving for Lyft Express Drive worthwhile, it may be worth it to investigate the cost of owning your own car vs. the cost of trying another rental. If you’re considering buying your own car, consider the following resources below:

    If you’d prefer to rent, a better option for you may be using a program like Fair (for Uber drivers only) or HyreCar (for Uber and Lyft). Check out the articles and videos on these options below:

    Have Lyft Express Drive changes arrived in your city? How have they affected you? Let us know in the comments below!

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    -Paula @ RSG

    Paula Gibbins

    Paula Gibbins

    Paula Gibbins, a graduate of Augustana University, Sioux Falls, is a part-time rideshare driver and a full-time proofreader. She is based in Minneapolis/St. Paul. In her free time, Paula enjoys reading, playing board games and participating in trivia nights.

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