Uber is a magnet for negative news stories. It is largely viewed as an unruly, chauvinistic company that treats it’s drivers poorly.
This view may or may not be reflected in reality, but since August of 2019 Uber can can at least tout that they pay their drivers considerably more per mile than Lyft.
In the Phoenix, AZ market Uber pays 61 cents per mile (and 13 cents per minute) to their drivers. Lyft pays a miserly 35 cents per mile and 15 cents per minute. That’s 43% less than Uber.
Lyft’s does pay for the driver to get to the passenger and Uber does not. For the average driver in Phoenix, Lyft’s significantly lower per mile pay for the ride negates what little extra drivers earn on the way to their passengers.
There are some driver oriented blogs that state drivers are purposefully taking long routes to get to passengers to boost their pay.
Lyft Pays Less Than What IRS Says it Costs to Drive a Mile
The IRS calculates the average cost per mile to drive a passenger car every year. For the year 2019 that cost was 58 cents per mile. So by the IRS calculations Lyft drivers are losing 23 cents for every mile they drive.
Lyft is a company that claims a liberal, progressive corporate culture yet pays it’s drivers more like the robber barons of the industrial revolution.
Lyft Drivers Won’t Pay Federal Taxes
The miserable 35 cents per mile that Lyft pays results in NONE of Lyft’s drivers EVER paying federal income taxes.
Why? For every mile put on a driver’s vehicle Lyft pays 35 cents. The IRS then allows that driver to write off 58 cents for expenses. The resulting net income equals a negative 23 cents. What taxes are paid on negative earnings? Zero.
Drivers can also earn tips, and also get paid for time (15 cents per minute) and Incentives but they all amount to a minority of what drivers earn.
Most Passengers Don’t Tip
A recent study of 40 million ride share trips showed that only 16% of trips resulted in a tip.
Pay For Time Adds Little Income
The driver does get paid for their time, but Phoenix is a spread out city with a . Many trips take place on freeways where speeds are 60 to 75mph for the vast majority of the trip, meaning a 13 mile fare may only take 15 minutes to drive. This would result in an increase of $2.25 to the drivers pay from $4.55 (for distance) to a whopping total of $6.80 (distance plus time). The IRS calculates that same trip cost the driver $7.54 in expenses. So the driver lost 74 cents for this fare.
Lyft’s Driver ‘Incentives’ Often Don’t Add Any Income
Lyft’s incentives are often constructed as follows; Provide 30 rides and we guarantee a minimum of $150. If the 30 rides you give don’t add up to the $150, as used in this example, Lyft will kick in the difference. The problem is most of the time the rides meet or exceed what they guarantee so drivers don’t actually gain any extra income.
The ‘incentive’ program is probably designed just to keep a driver from quitting when he or she has a day where they spend 12 hours giving 30 rides, spend $20 on gas add subtract another 200 miles from the life of their car and then see that the rides came out to $112.
Yeah, But Drivers Don’t Have To Drive
The elephant in the room for defenders of ride share companies is always the same. Drivers don’t have to drive.
Drivers don’t have to drive. That’s absolutely true. But Lyft tries to portray itself as more “ethical” than Uber yet their pay structure as instituted in August 2019 seems to defy this narrative.
The reality for drivers is that Lyft is just another corporation trying to make a profit and if that means their drivers are driving their cars into the ground for little or no actual long term profit, well, than Lyft can say, it’s the driver’s fault for driving with us.
True, but not exactly the image Lyft lays claim to.