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For many people in many parts of the world, driving a ride share car is a new experience. It can be a liberating way of making some money. Overall, Lyft drivers can expect to make about 21 dollars per hour of driving, according to Lyft. Your daily limit of total hours is 10, including non-billable hours. The equivalent annual income can be 70000 dollars annually, if you drive ten hours every day of the year.
However, you must pay for your own cost. Lyft does not pay for gasoline, car maintenance, cell phone usage, and any damages. There are five hidden costs.
Here are five of the biggest costs that you must cover yourself.
Your time. Obviously, you are on your own in terms of using your time. The equivalent hourly wage for driving Lyft is $19/hour.
Your gasoline. You must fill your car almost on daily basis. For most cars, a day worth of driving consumes about 12 gallon, or 50 dollars. It can cover about 300 miles in my car (a Jeep).
Your car depreciation. Obviously, the more miles a car has on odometer, the less valuable it becomes. If you put 300 miles a day on your car, you are talking about 10,000 miles a month if you drive for a month. Most cars can last 200,000 to 300,000 miles with top maintenance. This gives a car a lifetime of 3 years.
Your car insurance. You must pay for car insurance.
Your cost of car maintenance and repair. You must cover for costs of repairs. The repairs may be needed down the road when you rack up 300 miles per day.
In the end, Lyft drivers do not make money, let alone make a living. Don't do it unless you are interested in helping people.
This is even true for the largest metropolitan area in Northern California. I can say it since I am a Lyft driver myself in the San Francisco Bay area. All the numbers below are from my real driving experience. My normal area of driving covers Silicon Valley (e.g., San Jose and Palo Alto), East Bay (e.g., Fremont), the Castro Valley (e.g., Pleasanton), and far central valley suburbs (e.g., Tracy and Stockton).
Let me give you some numbers as examples. Suppose that a Lyft rider pays Lyft 40 dollars for a ride, you will be given about 70%, or 28 dollars. A 28-dollar ride in the San Francisco Bay area is typically about 30 miles long on highway and can take you about one hour. It can also mean that you will be in a new city and new time window and may not be able to find a return rider quickly.
When I say a Lyft driver earning 28 dollars, the ride will burn about 2 gallons of gas. With gasoline cost of nearly 4.5 dollars per gallon, this is 9 dollars of cot. This leaves about 19 dollars. At this rate, your hourly pay is about 19 dollars per hour, if you calculate it this way. In reality, the other costs will also eat significantly into this haul.
Does it matter if the Lyft driver lives in a big city or a small one?
In reality, your ride requests will be a mixture of long ones (20-100 miles) or short ones (within 10 miles). No matter what the mixture and what city is, the costs will eat into the earnings.
Here are some numbers of rider's earnings. I earned 70 dollars from the 100-mile ride (from Livermore to Sacramento). And there was no tip. I typically earn $6 for inner city rides, such as Mom's dropping off kids, people going to visit friends, going to car repair shops, or workers commuting to work. Each such trip will take about 20 minutes to complete.
If it appears that a Lyft drive makes no money, you are not completely wrong. Lyft and Uber have powerful algorithm that calculates the pay to the driver and the price for the rider. it boils down to a zero-sum game for the driver. Some Lyft and Uber drivers are full time (that is, 10 hours a day, every day). Some are part time (e.g., a couple of hours a week, in peak hours).
If you drive Lyft full time, and makes 300 dollars a day, then your fuel costs will be around 100 dollars that day. You have a chance to make 70,000 dollars annually if you keep up with this brutal pace.
In reality, you may be driving anywhere in the United States and the income is about the same, I suspect. Your rider cannot be long rides all day. It will always be a mixture of long and short rides. Both long and short ones have their own pros and cons.
A Lyft can pick and choose what rides to accept, but in reality you have to go with the flow and take whatever the riders demand, based on location and time.
If you want to make more money and squeeze out some profit, you must drive long max hours.
The author is a Lyft driver. To contact the author, use the email link provided in the website.