Is it better to drive for Uber or Lyft? This guide will go over the pros and cons of each, including which company pays better.
Key takeaways:
- Uber drivers average $19.73/hour.
- Lyft drivers average $17.49/hour.
- Averages vary drastically depending on local rates and rider demand.
- Drivers for both companies incur about $6 per hour in expenses.
- Lyft and Uber both offer bonuses for driving during busy times.
- Uber’s earnings guarantee is only available to new drivers.
- Lyft’s earnings guarantee offers change regularly but are available to all drivers.
Uber vs. Lyft is a common problem. Both offer business opportunities with minimal start-up costs. If you have a clean driving record, a vehicle in decent condition (usually fewer than 15 years old), and meet other minimum requirements, you can start driving for either.
But how much will you earn? Neither company pays an hourly rate. Earnings vary widely depending on how many fares you accept, when you drive, the expenses you incur, how well people tip you, and more.
This guide breaks down the differences between how much drivers earn on Uber vs Lyft, driver bonuses for both companies, and the differences in their pay structures.
Average hourly rate for Uber vs. Lyft
Neither Uber nor Lyft publishes their driver’s average hourly wages, but a survey of thousands of drivers in 2019 indicates an average hourly wage of $19.73 for the former and $17.49 for the latter. This is before expenses, though. After expenses, Uber drivers end up with $13.47 per hour, while Lyft drivers put $11.55 in their pockets.
Note these numbers reflect 2019 earnings. Most drivers experienced an increase in pay that year. If the rate trend continued, many drivers may now be earning more than these averages.
Pay structures for Uber vs. Lyft
Both Uber and Lyft base their driver pay rates on time and distance. The time and distance rate is based on your location. Both companies offer a range of bonuses. Then, there are tips — drivers get to keep 100% of tips from all companies.
Difference between rider costs and driver pay
The fare for Uber and Lyft riders is based on the time and distance rates in their area. Here are some basic facts to keep in mind when deciding whether Uber vs. Lyft is right for you:
- The rideshare companies may add special fees like safety fees or airport fees to the total.
- Riders can add a tip if they like.
- Drivers only get a portion of the amount that the rider has paid.
Here is an example: Imagine that a rider’s fare costs $20 for time and distance, the company adds on a $4 safety fee, and the rider pays a $5 tip. Based on these numbers, the rider has paid $29. Both companies keep extra fees. Then, Uber keeps a 25% commission and Lyft takes 20%. For this $20 ride, the Uber commission is $5 and the Lyft commission is $4. The driver gets to keep the whole tip for both companies. Based on the $29 rider fare, the Uber driver has earned $20 ($15 base pay plus $5 tip) and the Lyft driver has earned $21 ($16 base pay plus $5 tip).
Over time, Lyft’s lower commission rates can help you to earn more money, but that doesn’t necessarily mean that you’ll earn more working with Lyft. You also have to take into account the rate differences between these two companies, how busy they are, and their bonus structures.
Uber vs. Lyft bonuses
Uber has surge pricing that rewards you for working during busy times. The company calculates a surge multiplier based on demand, then multiplies the regular rate by this number. For example, if the normal time and distance rate is $20 and the surge multiplier is 2, the rider’s rate will be $40, and your payment will be based on that amount instead of the regular rate.
Uber also offers bonuses for reaching certain goals. The bonuses are not always active, but you can see when they’re happening in the app. Uber may pay you extra if you complete a set number of trips in a certain amount of time, for example, or may pay extra for trips in key areas at busy times.
Most of Lyft’s bonuses are also based on rider demand. The company has weekly set bonuses that it uploads into the app bright and early at 5:00 AM on Monday morning. It also offers real-time spot bonuses that appear in the app as they’re happening, plus offers ride streak bonuses. Rather than applying per ride, streak bonuses apply when you accept back-to-back rides during busy times.
Uber vs. Lyft’s earnings guarantee
Uber offers an earnings guarantee for new drivers. If you complete a certain amount of rides in a certain amount of days after signing up, the company guarantees your rate. If you earn less than the guarantee, Uber will pay the difference.
Lyft also offers earnings guarantees, but they’re not just for new drivers. The guarantees change weekly and new ones are posted Monday mornings. If your earnings are lower than the guarantee, Lyft makes up the difference. For example, if you’re guaranteed to earn $50 but you only earned $30, Lyft will pay you $20.
Changes to Uber and Lyft driver pay
Note that Uber and Lyft may change their pay at any time.Uber has been testing out a new pay structure in some areas, for example, with drivers earning an upfront fare based on the same factors discussed above. Check these companies’ websites for the most up-to-date details.
With both companies, your expenses make a difference in your total earnings. Keeping expenses low helps to boost income. Take advantage of the helpful programs and tools offered by both companies to earn as much as possible.
Contact Life Asset to talk about your success
The team at Life Asset helps small businesses get off the ground and succeed. We help very small business owners – including Uber and Lyft drivers – obtain loans, build their business credit, and improve their businesses. To learn more about how we can help you, contact us or apply for a loan today.