Contents:

6 min read

    6 min read

    Lately, Lyft has been implementing a lot of new changes to driver earnings, destination mode, and more. Senior RSG contributor Sergio Avedian covers how the latest changes to the driver earnings statement will affect drivers below.

    The relationship between Uber, Lyft and their drivers has been a tumultuous one to say the least in recent months. Lyft has cut rates in a dozen or more cities since their IPO and with the passage of AB5, things may get more contentious.

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    But amongst all this turmoil, Lyft is introducing a new, more transparent and, in my opinion, improved version of the driver earnings statement so let’s take a look.

    Lyft Announces Changes to the Driver Earnings Statement

    The following screenshot is the new, improved and clearer version of the driver earnings statement, which will be phased in starting today (September 12, 2019). As you may notice, there’s a lot of information on it, so I’m going to break it down line by line.

    The new Lyft driver earnings statement is an aggregate of all the driver’s rides for the week, and it contains a lot more driver specific information. This is Lyft’s best effort so far as far as transparency of earnings is concerned. I hope Uber will follow with a similar concept.

    Lyft’s Announcement

    Here’s what Lyft had to say about the announcement in a blog post on their website:

    We want to make sure there’s never any confusion about how much you earn throughout your week. That’s why we’ve developed a clearer, more comprehensive view of your pay details. You’ll soon see a weekly pay statement in your Driver Dashboard. Select drivers will see the new view starting on September 12.

    The new view makes it easier to see your net earnings from week to week. You can still access your earnings breakdown for previous rides, but for any rides you give on or after the change goes into effect, you’ll just see your earnings.

    The amount you earn won’t change at all, and you’ll still see how much you take home from every ride. And your earnings are still based on the time and distance of each ride plus any tips and bonuses. You just won’t have to do all the math to figure out what you make every week.

    Changes to single ride earnings view

    The new single ride breakdown will not be as detailed as it was previously. The breakdown of actual driven miles and minutes will be taken away as well as what the passenger paid for the trip, since the driver will be getting an aggregate of all the rides in the new statement. It will look like the following screenshot on the bottom left.

    I personally don’t like the fact that Lyft, on the one hand, decided to simplify and be more transparent about the weekly earnings of the driver in a comprehensive manner. On the other hand, they took away the details of each ride from the driver. It seems like they are trying to hide something – maybe the 50-70% commissions that it takes on certain trips?

    I could understand why the passenger receipt would not be individually revealed, since all the rides are aggregated in the new weekly statement. Is it about to relieve the driver’s angst about the take rate of Lyft? I would have preferred to keep everything the same but add the new comprehensive statement to Lyft’s arsenal.

    Breaking Down the New Statement

    Example driver summary from Lyft

    Example driver summary from Lyft

    On the first page (left), this is the breakdown:

    Net Earnings: This item should be pretty self explanatory, however, this number is the Net Earnings you will receive from Lyft. For a driver’s purpose though, this is actually your gross earnings since this is before all the expenses such as gas, car payments, insurance, depreciation, maintenance, etc.

    Driving Totals: Rides. This line item is very clear, it consists of all the rides the driver has given for the week.

    Booked miles are all the miles driven from the time of accepting the request to the end of the ride, not including dead miles for repositioning or driving home at the end of the shift. You should track your miles with a free app like Stride Tax to make sure you can deduct all the business miles you drive.

    Booked hours is the total time spent from the moment a diver accepts the ride to the time a driver ends the ride.

    Online Hours is the total amount of time a driver spends logged on to the Lyft platform.

    The rest of the new statement’s first page is self explanatory. It includes all the bonuses, tips, cancellation earnings and the driver’s deductions.

    On the second page, this is how it breaks down:

    Passenger Payments: Ride Payments is the total dollar amount the passengers paid in this case for 76 rides.

    This is where it may get tricky for the drivers. This is the total dollar amount passengers paid and are broken down into four items, Platform Expense, Service Expense, Donations and Third Party Fees & Taxes.

    The nice thing about the new earnings screen and this page in particular is that you can add up the platform expense and service expenses 109.55+175.97 and use that to figure out what Lyft’s effective commission for the week is. In this example, the actual calculation would be:

    (Platform expense + service expense)/(Ride payments – Donations – Third party fees and taxes)

    (109.55+175.97)/(1090.94-0.03-23.60)=285.52/1067.31

    =26.8% (Note: this is a fictitious example since over the years, we’ve found this number to be in the 30-40% range when we’ve analyzed it)

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    Takeaway for Drivers

    My takeaway from this announcement is mixed. I am not sure why Lyft was compelled to further break down the expenses but I suspect that they are trying to have drivers look past the individual trips where they take a high cut and look at the total rides in aggregate and see a lower percentage. In the past, we’ve always calculated the effective commission to be in the 30-40% range so let us know how your numbers look going forward.

    The new comprehensive driver earnings statement is a definite plus for drivers who treat their driving as a small business and would like to keep close tabs of their financials. When I interviewed 40 Uber and Lyft drivers, I came up with the conclusion that a majority of drivers have a daily dollar goal in mind, and they don’t treat their driving as a business. Maybe this will help them be more proactive in understanding and taking an interest in their financials.

    What do you think? Is this new comprehensive earnings statement a plus for the drivers? What other changes would you like to see?

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    -Sergio @ RSG

    Sergio Avedian

    Sergio Avedian

    Sergio has been driving Uber and Lyft for about three years. He has over 4500 rides on both platforms, mostly on Uber. Sergio has a degree in finance, and worked on Wall St. for over eighteen years. In his free time, he still trades stocks and derivatives for himself and a few friends. He is also a PGA certified golf instructor, teaching golf is his passion. Sergio is married with two wonderful kids who take the rest of his afternoons/weekends between their soccer practices and golf tournaments.