Do you know that Lyft Inc. is one of the most popular taxi driving service companies in the US? Perhaps, driving for Lyft is fun. Yes, With the help of this firm, many have gotten part-time and full-time employment. In the same vein, they are also able to take care of their families with their earnings.
According to Lyft, “signing up to be a driver makes you your own boss”. However, in this article, we will learn if this claim is true. Just read to the end.
What Is Lyft?
Lyft is a rideshare platform in the U.S. and parts of Canada. It was established in 2012. However in March 2019 through a Nasdaq listing. The brand operates in more than 600 cities in the U.S. and 10 in Canada. At the moment, it has over 2 million drivers operating on the platform serving over 12 million customers. With their phones, customers can book rides online with their Lyft app. Thus, the app is available for download at Google Play or the App Store.
What Is the Average Income for Lyft Drivers?
Driving for Lyft helps you make lots of cash. A Lyft driver earns an average of $31,249 — 36% below the national earning average annually.
On the other hand, Glassdoor estimates it to be between $16 and $17 per hour. Take some time to do the Maths, the annual income is between $33,280 and $35,360, when calculated weekly and daily.
However, keep in mind that Lyft drivers do not get a salary, they are paid per hour. The firm sees them as independent contractors. This is so since they drive their own cars, at their own convenience, And more. Also, they are responsible for fueling their cars and maintaining them.
Since the drivers earn per hour, the more hours they drive, the more they earn. Lyft calculates drivers’ pay from the moment a driver picks up a client, which begins one minute after the driver taps “Arrive.”
The app calculates charges by estimating many costs including:
Minutes traveled
Distance traveled
Base fare
Distance rate
Per-minute rate
Good To Know
Usually, the cost of each trip depends on what city you’re driving in. You may get bonuses and adjustments if there’s heavy traffic.
Hourly Earnings
Lyft as a body or firm takes 20% of the earnings. If a driver earns $20 per hour and he works for 10 hours and gets $200. Lyft will take $40. The driver goes home with $160.
Income Taxes for Lyft Drivers
Actually, no income taxes will be withheld from your pay when you drive for Lyft as a 1099 worker. However, you owe taxes on the money that Lyft pays you. So you pay self-employment tax to the IRS once you earn more than $400 as a 1099 contractor in a calendar year.
Federal self-employment tax is 15.3%. It covers the deduction from your pay (7.65%) and the amount that a normal employer would contribute (7.65%) to Medicare and Social Security tax for a W-2 employee.
What Impacts Lyft Earnings?
A lot of factors affect what you’ll make as a Lyft driver. They include your location, the number of hours you work, your expenses, tips from clients, and more.
Let’s consider them in detail.
Hours Worked
Lyft drivers earn hourly. The more hours you work, the higher your earnings.
Driving for Lyft – Is Driving for Lyft Worth It?
Yes! It’s worth it as you work at your own will. Even if you are taking it for full-time work, it’s still at your will. While you work with Lyft, you still have time for family, friends, and other activities. The system is flexible and if you already have a job, you can combine it with you and earn more.
However, note that all expenses and insurance about your car is on your head. If you do not have many customers per day, you may not earn much.
Your Location
The higher the cost of living in your city, the higher you earn from driving. For instance, if your drive in the city, you earn more than someone who drives in the countryside.
Another factor to consider here is population density. Cities with lots of people have more customers. But cities with less population density have fewer customers. People who get customer requests immediately after they open the app are likely to earn more.
Surge Pricing
This method focuses on the high demand for ride-sharing. It is usually due to rush hour and rainy weather. Working on peak hours helps you to earn more. Grab the offer.
Bonuses and Promotions
This firm, Lyft has a bonus program for drivers. It schedules promo and bonus periods randomly. This helps hardworking drivers to earn more. Many customers to give tips and bonuses to drivers who treated them well. Lyft does not touch any bonus a customer gives a driver.
Service Tiers
In Lyft, drivers can give services in different tiers. They can select between providing regular service or luxury service tiers in select categories. Drivers with brand new high-end vehicles can maintain a rating of at least 4.85 and earn more. Other categories include Lux Black XL, Lyft Lux, and Lux Black.
FAQ on Driving for Lyft
How can I earn more with Lyft?
Work more during promotions and give excellent services to customers. This will make them give you bonuses and make them always come back for you. Show personal interest in them and treat them nicely.
Does Lyft offer drivers the option to rent a car?
Yes! It gives rental cars to drivers who can not afford to buy a car. Lyft’s partnership deals with Flexdrive and Hertz through the Express Drive program. For people who can drive but don’t have a car, they can rent a car and drive for Lyft.
How long does it take to start earning on Lyft?
Once you sign up and enroll all your personal details including phone number, email address, driver’s license, and other vital details. For people who have a car, Lyft decides its road readiness. Permit the platform to run background checks on your driving record. The background check takes a few days. After that, you will soon get your first client.
Does Lyft cover gas and car maintenance expenses?
No! Not at all. Each driver covers all his expenses down to car insurance since they are independent contractors. That’s why they have to consider a lot of factors in pricing.
Does Lyft pay for accidents?
Interestingly, yes. Lyft provides insurance for accidents. It has third-party liability coverage that pays up to $1 million for personal injuries and property damage if a driver is involved in an accident. However, the insurance must conform to the terms of service at the time an accident happens.