If you’re trying to earn some extra cash, driving for a service like Lyft can be a great way to get more money in your pocket. You also get to set your schedule while doing it. Lyft can be a nice side hustle, but the amount you can earn depends on several factors: Your location, how much you work and when you work will impact your total earnings.
So exactly how much do Lyft drivers make? Well According to Indeed, the average Lyft driver earns $21.51 per hour. This number is based on 91 salary estimates from employees and features a low of $7.25 per hour and a high of $44.25 per hour. It’s a little more than what you can earn on Instacart.
Looking for ways to access your cash sooner? MoneyLion InstacashSM is a cash advance that can help you bridge the gap between paychecks. Access up to $500 of Instacash – no interest, no credit check, and no mandatory fees.
How much do Lyft drivers make per day?
The average Lyft driver earns a median salary of $38,803 per year. This salary comes to $106.31 per day, taking into account weekends, holidays, and vacation time. These figures come from estimates found on Salary.com.
Lyft drivers are paid a base rate plus extra per mile and per minute, along with a tip offered by the rider. These extra payments add up but aren’t enough for most people to drive on Lyft full-time. However, it is a viable side hustle that can assist with your financial goals.
How much do Lyft drivers make per ride?
Lyft drivers make approximately $13.31 per ride on average based on Lyft’s third-quarter 2023 financial report. The company hosted 187 million rides in the quarter, which generated $3.554 billion in gross bookings. That comes to $19.01 in gross revenue per ride.
Lyft recently committed to giving drivers 70% of what the rider pays excluding external fees. The 70% figure against the gross revenue per ride results in an average pay of $13.31 per ride.
Lyft can adjust its pricing structure at any time, and rates can vary from city to city. Drivers should know the components that influence pay before getting started with Lyft.
Factors affecting Lyft driver income
Lyft income won’t be the same for every driver. Several factors can make a difference in the earnings you’ll take home.
1. Location
Some cities have higher pay rates for Lyft drivers. In certain states, the company has to pay minimum wage — a number that varies depending on the state where you’re working.
2. Demand/time of day
During times of high demand for rides, Lyft will institute surge pricing. That means the trips cost more, and drivers get paid more. Typically demand is the highest from 7 a.m. to 9 a.m., when people are heading to work; 4 p.m. to 6 p.m. when people are headed home from work; and 12:30 a.m. to 2:30 a.m. when people are heading home from bars tend to be the best times.
3. Driver experience
When drivers have more experience they tend to have greater earnings because of higher ratings and more positive reviews.
4. Service level
Lyft offers a variety of different service levels to cater to customer needs. Each type of ride is in one of these categories:
- Economy
- Premium
- Extra seats
- Other types
Typically, Lyft premium and extra seat services tend to charge more. Lyft drivers specializing in these services may be able to earn more per ride.
5. Miles and minutes
Drivers get paid for every minute and mile they log. Longer commutes will result in higher earnings for each ride. The cost per minute and mile depends on various factors such as location and the type of service being offered. A driver cannot control those variables, but they can choose trips that have more miles.
5 Tips for maximizing Lyft driver income
Drivers’ fates aren’t entirely up to the city where they live. It’s possible to increase your earnings while working the same amount of hours. There are things drivers can do to maximize their earnings.
1. Finding high-demand areas
Places like downtown gathering spots, concerts, and airports have more riders in one spot who need to get where they’re going. Lyft will create surge prices for those spaces because they’re high-demand areas. Taking riders from there will boost your pay.
2. Offering exceptional customer service
Having a clean car with things like snacks and bottled water available for your customers plus features like phone chargers for them to use will brighten your riders’ day and encourage them to give you bigger tips and higher ratings.
3. Driving during surge hours
Lyft drivers earn money based on the number of minutes and the number of miles that make up each of the rides. You can maximize profits by driving during hours when more people want rides, which creates a pay surge.
4. Stay informed about local events
Local events can bring a lot of people from other towns and cities. When these events take place, demand for Lyft drivers will grow. Working during concerts, festivals and other local events can result in higher pay for the day.
5. Understand tax deductions
Lyft drivers can capitalize on several tax write-offs to lower their taxable income. Tracking expenses that go into your Lyft side hustle can increase your take-home pay after taxes. Vehicle maintenance, gas, and certain driver-related expenses may contribute to a lower tax bill.
If you are looking for help with filing your taxes, MoneyLion has you covered. MoneyLion has partnered with Column Tax to offer a stress-free tax filing process for qualifying customers.
Learn more about Filing your Taxes with the help from MoneyLion.
Challenges Lyft drivers face
Like all jobs, Lyft isn’t always a breeze. These are some of the things to keep in mind before getting started.
1. High operating costs
A good portion of the pay goes to gas, tolls, insurance, and car maintenance fees. These expenses can quickly add up and speed up your vehicle’s depreciation. While these operating costs can reduce your tax bill, they reduce also your margins.
To better manage high operating costs, you may want to consider putting extra funds away for saving. MoneyLion offers a convenient marketplace to compare high-yield savings accounts from our trusted partners that could help grow your money.
2. Lack of benefits
Gig workers don’t enjoy the benefits of traditional employment. Lyft drivers have to cover their own health insurance and don’t benefit from retirement account matches. Your income is also based on how much you work. Lyft drivers don’t make any money on sick days. Drivers will also have to pay the self-employment tax since they file 1099 tax forms.
3. Difficulty maintaining a work-life balance
The times you’ll earn most with Lyft are often the times you would want to be with family or friends, like holidays and evenings. There’s also pressure to work extra hours because every minute you work is a chance to earn money.
4. Difficult passengers and potential safety concerns
You never know who you will pick up during a Lyft drive. You may get unruly passengers and will have to stay calm while on the road. However, some passengers can put the driver at risk and present a dangerous situation.
Being friendly with passengers can minimize the likelihood of any tension. People are less likely to put you in a dangerous situation if they see you as friendly. Politely requesting that a passenger stop any bad behavior can help with diffusing situations as they arise. Working late hours can increase the likelihood of dealing with difficult passengers.
5. Insurance concerns
Auto insurance protects your vehicle from accidents related to personal use. However, you may need an add-on to your policy to cover any accidents incurred while on the job. Comparing insurance options can help you get a lower premium and better terms.
MoneyLion makes it easy for drivers to compare rates across multiple providers. You can also end up with a lower rate than the premium that you are paying for your current policy. MoneyLion’s process is seamless and can save a lot of time when you are looking for a policy.
Is driving for Lyft worth it?
Driving at Lyft can be a useful side hustle, but it isn’t the best way to generate a full-time income. The average Lyft driver earns $21.51 per hour with some drivers earning $30 per hour. You will have to spend extra money on gas, insurance, vehicle maintenance, and other costs.
Lyft can also change its payout structure at any time, which leaves drivers reliant on the algorithm. Lyft can help with short-term expenses, but other side hustles are more lucrative and can become full-time careers.
If you’re considering a career as a Lyft driver, it’s helpful to also explore all other options for side hustles or full-time jobs that may be available to you.
Recommended: How to Make More Money in 2024
Understanding Lyft driver earnings and navigating the road ahead
Lyft drivers can earn some extra cash driving people around. It’s definitely a worthwhile side gig, so long as you’re aware of the pros and cons and go into into fully equipped with the latest information.
In the meantime, MoneyLion can make it easier to manage that cash and get on top of your finances. MoneyLion makes it easy to compare loans, insurance policies, and other financial products. Qualifying customers can also file taxes straight from MoneyLion.
FAQ
How much do Lyft drivers make per week?
Lyft drivers working 40 hours per week could earn about $860.40 according to Indeed’s rate of $21.51 per hour.
What percentage do Lyft drivers get?
Lyft recently committed to distributing 70% of the fare to its drivers after paying external fees.
Are Lyft drivers paid a base salary or is it all based on their fares?
Lyft drivers do not receive a base salary. They are paid based on the fares they earn from their trips. Lyft takes a commission on each fare, and drivers keep the rest.
How much do Lyft drivers make per mile?
The earnings per mile depend on the type of vehicle you drive, your location, when you offer rides, and other factors.
How do Lyft drivers get paid?
Typically, Lyft drivers get paid every Tuesday through a direct deposit to their bank accounts. A couple of other options are also available. Express Pay lets drivers access their funds immediately. Another option called Lyft Direct loads your earnings to a debit card managed through an online bank.
