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8 min read

    8 min read

    A common theme among drivers is we’re not (usually) paid a fair compensation rate for the work we do. However, we’re all on the same playing field… right? Senior RSG contributor Jay Cradeur recently found out a discrepancy in how Uber and Lyft pay drivers, and how these different types of pay can be leveraged by drivers to drive smarter, not harder.

    Have you noticed that whenever you call in to either Lyft or Uber’s Customer Support, they always say things like “Hey Jay, thanks for being one of our best drivers.” Or they say “We sure do appreciate your professionalism.”

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    You get the point.  For the past two years, I actually believed these platitudes were sincere.  Perhaps I tend to be trusting, and therefore I am more inclined to be duped.

    A common theme among drivers is we’re not (usually) paid a fair compensation rate for the work we do. However, we’re all on the same playing field… right? Senior RSG contributor Jay Cradeur recently found out a discrepancy in how Uber and Lyft pay drivers, and how these different types of pay can be leveraged by drivers to drive smarter, not harder.

    Drivers Get Different Bonuses – For Seemingly No Reason

    Recently, I met a young man who has been driving for Lyft for just a few months.  It was New Year’s Eve.  I had already put in 6 hours, and was pulled over for a break.  This new driver seemed rather excited about driving on NYE.

    Related: Driving on New Year’s Eve

    He said “Isn’t it great that Lyft is offering all these Power Zone starting at 7 p.m!”  It was 6:45 p.m.  I said, “Really, I did not know Lyft had Power Zones.  Can you show me what your app looks like?”  He said “Sure” and he showed me. He then went on to show me that his Power Driver bonus was set to $365 per week.

    I, for the past 6 months, had been earning a consistent $315 Power Driver bonus from Lyft. I quickly calculated that I was over $1,000 on the short end.

    So you know what I did?  I contacted Lyft and sent them this image.  I wrote in my correspondence:

    Hello,

    Can you please address this concern of mine.

    Can I please be added to the list of drivers that get the best incentive offers? I have 7,750 rides with you, 2 years of exemplary driving for Lyft, and a 4.9 rating. I met a young driver on New Year’s Eve night and he is getting better incentives, at a PDB of $365 and power zones. Over a year, this is costing me thousands of dollars and it does not seem fair. Your best performers should get the best offers. See attachment.

    Here is the response I received:

    Good morning Jay,

    Thanks for taking the time to write in about this. I will be more than happy to give you this information that I hope will be of help!

    First of all, let me congratulate you on your 7,753 rides and your 4.91★ rate! It’s awesome seeing that you have such a commitment to the Lyft community.

    We understand that with your capacity, you would like to receive the best incentives that Lyft can offer. I would love to do that since I can see the amazing driver that you are but at the moment the incentives are sent randomly, we do not work with a list.

    Nevertheless, Lyft loves to show its appreciations for all the drivers in the community and will continue to do so!

    We are always working with drivers to continually improve the service that Lyft provides, so hearing this kind of feedback is extremely helpful.

    Random Assignment of Compensation Plans?

    There is the word: Random. Does anyone believe that Lyft or Uber, high tech companies that they are, do anything “randomly?”

    So then I started to think about our situation as drivers. For those of us who are consistent drivers (and there are a lot of us!), both Uber and Lyft understand that regardless of the incentives, we will continue to drive. So why would they offer us the best incentives when they can save on those incentives and use them for drivers who don’t drive consistently?

    Why Are Uber and Lyft Offering Different Bonuses to Different Drivers?

    Remember the movie, Glengarry Glen Ross? Alec Baldwin announced a contest and top prize was a new Cadillac. Second prize was a set of steak knives. Both Uber and Lyft don’t operate this way. The new guy gets the Cadillac and consistent drivers like me get the steak knives.

    Later in the week, I received an email from Lyft asking me to rate the customer support. I gave low ratings, as I did not feel I received any satisfaction. I asked the person reading the comments how they would feel if they did a superior job, but the person next to him or her, who did only an average job, actually got paid more based on supposedly “random” assignment?  To put it in a nutshell, here is the strategy:

    1. Tell the drivers we love them.
    2. Pay each driver as little as possible given their driving performance
    3. Baffle them with terms like “random” assignments
    4. Tell them we love them again.  Repeat

    Bottom line, the companies don’t reward loyalty even though they should. Uber and Lyft are testing things out on drivers (and passengers, to be fair) in order to get maximum value for them. The companies do this because they’re trying to get the most drivers at the lowest amount of pay – they’re not looking out for you.

    Related: Uber’s Upfront Pricing is Secretly Overcharging Passengers Without Paying Drivers

    How Can Drivers Get Maximum Value for Themselves?

    The only way I can imagine using this knowledge for any benefit would be to stop driving for several weeks to validate that I am no longer a consistent full time driver and then see if my bonuses would change.

    I have taken many three-week vacations, however, and nothing changed during that time. In the end, I feel stuck at my level no matter what I do. Regardless, I will keep driving until July as I enjoy the work and its flexibility. And I will continue to do an exemplary job because the passengers deserve a good service experience.

    Related: Thinking Beyond Rideshare Driving

    Strategy One: Go After Bonuses

    The best way that I know of for a full time driver to maximize revenue is to evaluate each bonus to see which offers the most dollars per ride.

    For example, Lyft offers me $315 for 120 rides, which calculates to $2.62 per ride. Uber offers a variety of bonuses; some with per ride bonus earnings as high as $5 – $8 dollars.

    As a full time driver, I attempt to get several bonuses each week from both companies based on the values of the bonuses.  All bonuses that I earn are based on number of rides, so driving with both apps on simultaneously definitely reduces wait time and allows me to hit my numbers quicker.

    Related: Can You Make More Money with the Mystro App?

    Strategy Two: Use Mystro to Capitalize on Both Platforms

    Uber and Lyft aren’t loyal to you, so don’t feel like you need to be loyal to them. For those of you who may struggle with running both apps simultaneously, you might try the Mystro app, which streamlines the process.

    Strategy Three: Drive When Surge and Primetime Are Highest

    Organic Surge (Uber) and Prime Time (Lyft) are not assigned randomly. These adjustments are purely a function of supply and demand.

    At certain times of the day, the demand for drivers is higher than the supply. In order to adjust to these market forces, both Uber and Lyft provide the drivers with the opportunity to earn more commission per ride by assigning a multiplying factor.

    For example, it is common during rush hour in the morning and evening, and late night on the weekend for a regular $10 commission to be doubled. Uber would show this as 2.0X ride and Lyft would show this as 100% ride.

    Another time you can see high fares is during a heavy rain/bad weather. More passengers choose to take a car to avoid the rain.  Focusing on these opportunities allows a driver to maximize his or her earnings.

    The Companies Aren’t Looking Out for You

    The bottom line is we drivers are disposable. If I were to leave, or quit in frustration, there are always more drivers to take my place. No one suffers. Life goes on. Lyft prides itself on being the softer, kinder, gentler company, but they are in it for the money just like Uber. As Gordon Gekko said, “Greed is Good!”

    For all the platitudes, neither Uber nor Lyft deliver what is most important to all drivers: a fair compensation plan that rewards for performance and guarantees a legitimate opportunity to earn as much as possible.

    I am curious if anyone would share in the comments what his or her bonuses are, so we can get a feel for the diversity of pay. I understand some drivers are offered an hourly guarantee, Power Zones and Power Driver Bonuses.

    Drivers, what types of bonuses are you offered in your market? Have you ever compared what you get vs. what other drivers in your market get? Let me know in the comments.

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    -Jay @ RSG

    Jay Cradeur

    Jay Cradeur

    Jay Cradeur, a graduate of the Haas School of Business at UC Berkeley, is a full-time driver with over 26,000 rides. Jay has a driver-focused podcast: Rideshare Dojo with Jay Cradeur. When Jay isn’t writing articles or making videos, he is traveling the world. You can see what Jay is up to at www.nomadjay.com.