Lesson 1: The Biggest Payout – Which Rideshare Service Pays The Most?

Hello and welcome to the first lesson of module 3. In this lesson, we will break down the commission platforms for Lyft and Uber as well as look at expenses to determine which company can put more money in the pocket of the driver.

Whether you finished the previous module or are just jumping in now, make sure you have reviewed previous material so you can understand terms and phrases used in the following lessons.


Video Overview:


Which Rideshare Platform Pays More?

With so many options for which rideshare company you can drive with, one of the key factors in this decision for most people is going to be which one pays more.  While the pay scheme is similar, the fair for riders will fluctuate depending on certain factors.

Seasonal business can influence how much fare passengers pay, for example. If there is less business in the area the fare rate will go down. Whereas increasingly busy times implement surge charges.

Lyft VS Uber

Rideshare companies like Lyft and Uber don’t really ‘pay’ you. What happens is that they take a cut of the fare from every ride given, and you get whatever is left. The percent either company takes is different depending on where you are as well.

Generally, both Uber and Lyft charge based on three main factors: a base fare, plus the number of miles driven, plus the number of minutes a ride takes. With that being said, the more the passenger pays the more that goes into your pocket.

Some drivers employ their own tactics for driving up the ticket. A common one is taking the longest route possible to the customer’s destination. However, in no way should you take longer routes just to rack up charges. There are two major reasons why:

  1. It shows a lack of integrity towards your passengers.
  2. It discourages passengers from giving you a high rating and encourages them to use a different service.

So let’s look at a fare estimate of both companies, each for the same trip. In this hypothetical trip, you will be going from the Chinese Theater to Venice Beach, both of which are in Los Angeles.

 Lyft fare estimate: $21-29                                   Uber fare estimate: $21-28

As you can see, the estimations for fare for both companies are relatively the same. The only difference in these estimations is going to be whether or not surge pricing is in effect.

How much of this the driver gets down to the cent depends on the percentage either company takes. But guess what? It’s the exact same!

Lyft keeps 25% of the fare, as well as location based city/state taxes. The rest goes straight into the wallets of the driver. Drivers, of course also keep 100% of any tips received from the passenger.

Uber takes 25% as well, however they also charge the passenger an extra rider fee. So a passenger for Uber still pays around the same for their rides as a Lyft passenger would, but a rider fee is included.

Either company will give you the remainder of this fare. Which company you choose should therefore be determined more or less by how much business is present for each company in your city.

Day To Day Expenses

Anything that you know you’re going to have to pay for in advance counts as an expected expense. Let’s go over some of the more notable ones:

  • Gas

You know pretty well that you’re on the hook for the gas you fill your car up with. Depending on the car you drive and the amount you drive it, this can be either frequent or infrequent.

Also, keep in mind that every second you spend driving without a passenger in the car that you’re using gas and not making any money. So the more time you spend getting to your passenger, or just ‘driving around,’ the less you’ll make overall.

  • Insurance 

If you’re using your own car for ridesharing, then you’ll already be paying this. However, if you don’t own your own vehicle then these will be new expenses for you.

This will differ based on your age, sex, estimated daily travel distance and car make. Some insurance companies will charge more for monthly insurance if you drive for a ridesharing company as well. They see it as more of a liability to the driver, and by extension to the insurance company.

  • Incidental Expenses

These are things that you have to pay for, but aren’t necessarily planning for in advance. Are you driving during the late night hours to take advantage of surge pricing and need a caffeine pick-me-up? That coffee you buy is an incidental expense. Getting hungry while out taking rides? Well that delicious burger you might grab while on the job is an incidental expense.

Some incidental expenses may be more serious in nature. Like traffic accidents or vehicular collisions. The deductible you pay on your insurance and the possible increase in your monthly can be an unforeseen expense.

Then there’s those incidental expenses that you can definitely avoid regardless of other vehicles on the road. For example, getting pulled over and ticketed for running a red light or speeding. Safe driving and maintaining constant awareness will help keep you free of worry.

Looking Towards The Future

Maintaining your vehicle is a consistent expense and should be examined closely in respect to how many rides you can maintain for a period. Considering the similarities in how Uber and Lyft pay their drivers it comes down to the amount of business you can maintain. This is why so many drivers operate for both business’ simultaneously.

In respect to the various company platforms, using one of the services that provides a car for you can save some money on insurance. While you are using your own insurance when in the car, you will not pay a higher monthly premium for a car that you do not own. This also gives you options to rent a car that has better gas mileage and is mechanically maintained by the company.

Find a balance between ride density and your expenses. This is the key to making a more substantial paycheck.


The Biggest Payout Recap

Before moving on to the next lesson, review the above material. Below are some questions that you can answer in your head.

  1. Is it okay to take longer routes to drive up passenger fares?
  2. What percentage does both Lyft and Uber keep from the passenger fare?
  3. What determines the amount of monthly insurance you will pay for your car when ridesharing?
  4. How can you avoid being pulled over by a police officer while driving?
  5. Is car maintenance provided by either company?


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