How Much Money Can You Actually Make With Lyft And Uber
How Much Do Lyft Drivers Make?
- What Is Lyft?
- Average Annual Earnings
- Hourly Earnings
- Income Taxes
- Factors Affecting Earnings
- Is Driving for Lyft Worth It?
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The gig economy and advances in technology accept made for interesting chore opportunities. Ride-hailing services like Lyft are at present a formidable part of the transportation industry. The rideshare company, which is part of the Lyft Inc. portfolio, is ane of the two most popular taxi-culling services in the U.South.
But how much practice Lyft drivers make? Proceed reading to find out.
What Is Lyft?
Lyft is a rideshare platform currently operating in the U.S. and parts of Canada. The platform was established in 2012 and went public through a Nasdaq listing in March 2019.
Lyft operates in over 600 cities in the U.S. and x in Canada. More than ii million drivers operate on the platform, serving over 12 million customers. Customers book rides with their smartphones through the Lyft app, which is bachelor via Google Play or the App Shop.
What Is the Average Income for Lyft Drivers?
Estimates vary for how much Lyft drivers earn. Indeed puts the average annual earnings for drivers on the rideshare platform at $24,895 based on 207 self-reported earnings — 49% beneath the national average for drivers.
Glassdoor estimates the boilerplate earnings for a Lyft driver to be $17 per hour based on 214 self-reported earnings. Multiply that by 40 and then by 52, and that works out to an annual income of $35,360.
Lyft drivers are not salaried employees of Lyft — when you sign upward as a driver, y'all practice so equally an independent contractor. Similar other gig workers, Lyft drivers receive a 1099 statement instead of a W-2 and are non subject to minimum wage requirements. You drive on your own fourth dimension, in your own machine. Yous lone handle your vehicle maintenance, gas and most insurance costs.
Drivers' earnings are based on the time they spend driving with passengers in their car and the distance they drive with passengers. Lyft calculates drivers' pay from the moment a driver picks up a client, get-go ane infinitesimal subsequently the commuter taps "Arrive."
The app calculates charges by tallying several costs:
- Base fare
- Time rate
- Altitude charge per unit
Good To Know
The price per trip varies according to what urban center you're driving in. Bonuses and adjustments due to things like college-than-usual demand also determine how much you make at the cease of the day.
Hourly Earnings
Though driver rates are calculated based on how long they drive with passengers in the car and the distance they drive with passengers, Lyft takes a 20% cut of the gross fare and pays the residue out to the driver. So, what'south the average daily take-home pay afterward Lyft's share?
On a typical day, a driver makes between $12 and $17 per hr, according to Indeed and Glassdoor estimates — that's $96 to $136 in eight hours. Driving 40 hours per calendar week, you could expect to earn $480 to $680 per week, or $1920 to $$2,720 per month before taxes and not including expenses.
Income Taxes for Lyft Drivers
Go on in mind that no income taxes will be withheld from your pay when you drive for Lyft equally a 1099 worker. But you owe taxes on the money that Lyft pays you. That ways you've got to calculate your ain income taxes. You are also on the hook for self-employment tax to the IRS as soon as you make over $400 as a 1099 contractor in a calendar year.
That federal self-employment tax rate is 15.3%. This amount covers the usual employee withholding (7.65%) and the amount that a normal employer would contribute (7.65%) to Medicare and Social Security taxation for a W-2 employee. So Lyft drivers, similar other contained contractors, pay 7.65% more than in Social Security and Medicare withholding than W-two employees, plus any federal, state and local tax they owe.
However, Lyft drivers can deduct expenses from their gross income, which reduces their tax liability. Write-offs include a standard mileage deduction or bodily expenses involving business organization utilize of your car, tolls and parking, civilities yous provide to riders and cell phone expenses directly related to your business.
What Impacts Lyft Earnings?
Several factors affect how much yous'll brand as a Lyft driver. Your income tin can shift depending on how many hours yous put in, where you're based, your expenses and whether y'all get tips from customers.
Hither's a closer wait at factors that bear upon your income.
Where You Live
Your location determines how much you earn. For example, the higher the cost of living is in your city, the more than you'll make while driving for Lyft. That means if yous're plying the roads of Seattle, y'all'll make more than a commuter in Wyoming. Also, city drivers make more than those in rural areas.
In that location'due south also client density. Busier places naturally have more customers. When you leave your house and turn on the app, do you immediately receive requests, or exercise you take to bulldoze closer to town? If yous receive customer requests equally soon as you turn on your app, you lot're poised to earn more coin faster.
Surge Pricing
Surge pricing is a model that capitalizes on high need for ride-sharing. Such high demand could arise from rush hour and increase even more than combined with rainy weather. Working during tiptop hours can dramatically increment your earnings.
Bonuses and Promotions
Lyft has a bonus plan for drivers. The platform schedules promo and bonus periods randomly, allowing hardworking drivers to rake in more than pay. Lyft allows drivers to keep 100% of the bonuses they earn during promotion periods.
Service Tiers
Lyft allows drivers in some cities to offer services in different tiers. This enables them to choose betwixt providing regular service and providing luxury service. A commuter with a loftier-finish vehicle, 2014 model or afterwards (2016 in Houston, Texas), who maintains a rating of at to the lowest degree 4.85, qualifies to provide luxury service. Lyft'south luxury tier is categorized into Lyft Lux, Lux Black and Lux Black Xl.
Hours Worked
It may seem cocky-evident, but the number of hours a commuter works naturally translates into the amount they earn. Drivers who spend more hours behind the wheel will typically earn more than those who work merely a few hours per twenty-four hour period.
Is Driving for Lyft Worth It?
Driving for Lyft is flexible compared to a full-fourth dimension, or even function-time, job. Drivers can work at their convenience as they take intendance of their business organization, creating time for hobbies and family members or friends.
The cost of running the business tin be expensive. It's non unheard of for expenses to run Lyft drivers out of business. Furthermore, earnings are limited by demand — if in that location aren't enough customers to keep you lot busy for 40 hours a week, your earnings will be less than those of a driver in a loftier-demand area.
A major pro is that drivers control their own schedule, and in large function, their earnings. For many, the flexibility of operating as a Lyft driver outweighs its downsides, which is probably why at least 2 million drivers are using the platform to generate income.
FAQ on Driving for Lyft
Here are the answers to some commonly asked questions nigh driving for Lyft.
- How can I earn more with Lyft?
- You tin can earn more than past taking advantage of promotions, putting in more hours, and providing first-class services to customers who in plow might tip you lot.
- Does Lyft offering drivers the choice to hire a car?
- Lyft's platform offers rental cars to drivers who tin non afford to purchase a car. This is possible cheers to Lyft's partnership deals with Flexdrive and Hertz through the Express Drive program.
- Does Lyft embrace gas and car maintenance expenses?
- Lyft does non cover gas and motorcar maintenance expenses. Drivers are independent contractors, and they are expected to have intendance of these expenditures with the money they earn from trips.
- Does Lyft pay for accidents?
- Yeah, Lyft provides insurance for accidents. The platform has third-party liability coverage that pays up to $1 one thousand thousand for personal injuries and holding damage if a commuter is involved in an accident. This insurance is contingent on the terms of service at the time an accident happens. Claims get to the driver'southward insurance visitor first before the platform determines whether it will pay for damages.
- How long does information technology take to commencement earning on Lyft?
- Information technology takes around xxx minutes or less to enter your credentials — which are typically your phone number, email address, driver's license and other identifying information. If you have a car, Lyft will determine its route readiness. You lot too take to authorize the platform to run background checks on your driving record. This process unremarkably takes a few days.
Daria Uhlig contributed to the reporting for this commodity.
Data is authentic equally of Mar. 21, 2022, and subject to change.
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