The Ultimate Guide to Maximizing Your Income with Lyft
Lyft began in 2012 in San Francisco and has grown to become the second-largest ridesharing service in the United States. Logan Green and John Zimmer began the company with the goal to make affordable transportation accessible to all.
The two friends originally launched Zimride in 2007 as a carpool matching service before selling it to Enterprise and switching their focus to the Lyft platform we all know and love today.
Launched just a year after Uber, Lyft has been able to hold its own with a significant portion of the market share. In addition, Lyft has avoided most of the controversial mishaps and negative news stories that have plagued its rival, proving it may indeed have staying power.
- As of Q3 2019, more than 2 million drivers were employed through Lyft’s system [Lyft]
- In Q2 of 2019, more than 22.9 active users hitched a ride with Lyft [Lyft]
- In 2018, Lyft hit a milestone of more than 1 billion rides completed [CNBC}
- In 2019, Lyft’s global revenue was 3.62 billion [Statista]
- Lyft offers rides in more than 300 cities across the U.S. and Canada [Lyft]
Requirements to drive for Lyft
While signing up to drive with Lyft is pretty straightforward and most people will qualify, there are some requirements to keep in mind when starting your application process. The safety of both drivers and passengers is very important to the company, and these requirements are for everyone’s protection.
Experience and Licenses Required to Drive for Lyft:
While driver requirements vary by state and city, in general you will need:
- A valid driver’s license
- Valid car insurance and registration
- Be 25 years of age or older
- Proof of residency in the state you are signing up to drive in
- A clean background check and driving record
- A smartphone capable of running the Lyft app
Lyft Car Requirements:
While vehicle requirements to drive for Lyft will also vary from city to city, in general drivers can expect their car to be approved for service if it meets the following guidelines:
- Model year 2004 or newer (requirements vary in most major cities)
- Valid in-state license plates
- 4-Door sedan, SUV or van
- At least 5 seatbelts, but not more than 8
- Clean (not salvage) title
- Passes a multi-point inspection
Lyft provides insurance coverage to its drivers only while the Lyft Driver app is active. You will also need your own insurance policy that meets all of the following guidelines:
- A valid insurance policy that meets minimum state coverage requirements
- Insurance should be effective immediately and not expired or lapsed
- Your name should be listed on the insurance policy as a covered driver
- An optional rideshare insurance policy or rideshare endorsement
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How to get started as a Lyft driver
Getting started as a Lyft driver is a simple process that’s easier than you might think.
- Start an application on the company’s website or on the Lyft app
- Complete all required fields
- Schedule your vehicle inspection
- Await the results of your background check
- Create a driver profile and upload your profile picture
Once you have been approved as a driver, logging on for work is also pretty straightforward:
- Start the Lyft app and turn on Driver mode
- Review any incoming ride requests
- Accept a ride request and turn on your Lyft emblem
- Proceed to the location shown on the map and pick up your passenger
- Finish your ride and the app will process your payment automatically
You will also receive a Lyft emblem that you must display on the lower passenger side of your windshield while you are in driver mode. While you are waiting for it to arrive, you may print a temporary one.
There are some additional things to know as a new driver. Never accept cash for a ride, follow all local laws including car seat regulations and laws involving cell phone usage while driving, and respect all local airport rules and regulations.
What to expect as a Lyft driver
So, what does the day to day grind look like as a Lyft driver? How do you get paid and what other factors do you need to take into consideration as a Lyft driver?
How to get paid with Lyft
Weekly Deposits: If you want to receive consistent paychecks like you would at a 9-5 job, you can set up your Lyft payments as weekly deposits. Lyft initiates these deposits on Tuesdays at 5 a.m. and your funds will arrive within 1-3 business days, depending on your bank.
Express Pay: When you need your money in a rush, you can cash out your earnings instantly with Lyft’s Express Pay service. The processing time will depend on your bank but generally arrives the same day or within a few days.
Pros & cons of driving with Lyft
As with any app or platform in the gig economy, there are some pros and cons to driving with Lyft.
Pro: Make Your Own Hours
This is probably the most common reason why people decide to enter into the gig economy with apps like Uber and Lyft. Anyone from single parents to college students can easily fit driving for Lyft into their busy schedule during times that work for them. If you want to work 60-hour weeks, you can, and if you want to skip a week or two, that’s totally up to you too. Many Lyft drivers find this kind of freedom priceless.
Pro: Meet Interesting People
If you’re an extrovert, driving for Lyft can be a fun experience. You’ll get to meet passengers from all over the world and from all walks of life, as well as learn all kinds of new things from talking with them. Every day will be different, and you will likely never get bored like you would be sitting in a cubicle.
Con: Unruly Passengers & Stressful Rides
Every Lyft driver can share their fair share of horror stories. From drunk passengers to traffic jams, not every ride will be a piece of cake. As with any job that deals with the general public, at times you may wish you had a desk job instead.
Con: Additional Expenses Can Eat Into Your Profits
In addition to figuring out your own self-employment taxes, you will have gas, vehicle maintenance and wear and tear on your car to consider. While driving with Lyft can be a lucrative gig, these “hidden costs” can take out quite a big chunk of your profits. See below for more on this topic.
The costs of driving with Lyft
When calculating how much you can expect to earn from driving with Lyft, there are a few factors you will need to keep in mind that can affect your bottom line. Some of these expenses may be tax deductible, so speak with a tax professional in order to maximize your savings.
- Lyft Fees: Instead of charging drivers a flat rate commission, Lyft takes a portion of ride payments known as Lyft Platform Fees. These fees are variable, which mean they can change. Drivers can consult their region’s rate card to find out their rates.
- Income Taxes: As a self-employed gig worker, you will need to set aside your own withholdings to cover your bill come tax season. As a general rule of thumb, it is wise to calculate an income tax expense of around 25%.
- Gas: Lyft drivers are responsible for all of their own fuel fill ups.
- Cell Phone Plan: You will need a smartphone in order to operate the Lyft app and work as a driver. You are responsible for paying your own cell phone bills.
- Parking Fees & Toll Road Fees: Any toll expenses or parking fees you encounter while on duty as a Lyft driver are also out of your own pocket. However, they can be reimbursed by Lyft later.
- Regular Vehicle Maintenance & Car Washes: Keeping your vehicle clean and tidy and in perfect working order is crucial for your success as a Lyft driver.
- Miscellaneous Accessories: Many drivers choose to provide amenities such as air fresheners, mints, tissues and water bottles for their passengers.
How much can you make driving for Lyft?
While the amount that you can make as a Lyft driver will vary depending on your local area, how many hours you drive, and what kinds of shifts you take on, a new Lyft driver can expect to make, on average, $377 per month and about half of all Lyft drivers make between $100 – $499 per month.
Remember, many Lyft drivers are taking on this gig as a side hustle or in conjunction with driving for Uber, so don’t be discouraged if this number seems low to you. Putting in 40 hours a week or more will easily result in a full-time income, if that is what you are hoping for.
In addition to working more hours, drivers can earn more by taking advantage of surge pricing, trying to earn higher rider tips, Lyft driver bonuses, and other incentives. Read the next section for more on these topics.
How to make the most money with Lyft
Wondering how to make more money driving with Lyft? Luckily, there are some easy things you can do to ensure you make the most money possible:
Tip #1 – Sign up for both Uber and Lyft
In order to eliminate downtime as much as possible, many drivers suggest signing up and logging on with both apps at the same time. Once a rider is assigned on one app, simply turn off your availability on the other one. Having both apps running at once is an easy way to ensure quick passenger pickups without spending too much time sitting in parking lots waiting for a rider. The more time spent actively driving during your shift, the more money you will make.
Tip #2 – Locate “hot spots” in your local area where surge pricing is likely
If you’re willing to deal with the extra inconveniences, taking on a popular spot or route can pay out a pretty penny. For example, take on late night weekend shifts to pick up riders from crowded downtown bar districts, or take passengers home from large concerts and sporting events. Airport runs can also be very lucrative due to longer than average drives, guaranteed rides, surge pricing and better rider tips.
Surge pricing is also likely during storms and on holidays. Within the Lyft Driver app, you will be notified of hourly ride predictions for your area, available bonuses you may be eligible for, and which local events are happening nearby that could be prime earning opportunities. A new feature called Personal Power Zones also helps drivers find high demand areas nearby.
Tip #3 – Take advantage of the best times to drive
Driving during peak hours is the best way to guarantee a successful shift with plenty of passengers. According to other drivers, peak hours for Lyft drivers to gain the most riders include:
Morning Rush Hour: 6am – 10am
Evening Rush Hour: 4pm – 8pm
Friday / Saturday Evenings: 10pm – 1am
Friday / Saturday Late Nights: 1am – 3pm
These peak times may vary by city and even by time of year, so check with other drivers in your area to see when the ideal shifts are for your area. If you live in a particularly touristy area, these busy times can differ drastically. For example, peak times for an Orlando Lyft driver may include the early morning hours just before Disneyworld opens, and the late afternoon hours right before it closes.
Tip #4 – Maximize tips by providing top-notch service
Passengers remember and are grateful for drivers who go above and beyond. Some ways you can go the extra mile include offering riders a variety of phone chargers, water bottles, tissues, mints and even candy. In addition, offering friendly service with a smile and asking passengers if they have any particular requests for the radio or A/C settings is sure to result in a better tip. Be on time, be respectful, try to make conversation, open doors for your passengers, and offer to help with any bags or suitcases when applicable. Remember, Lyft drivers get to keep 100% of their tips!
How long does it take to sign up to be a Lyft driver?
Lyft’s sign-up process is fairly straightforward, and most steps of the driver application process can be completed within an hour or less. The longest part of the process is the background check and vehicle inspection, which can take several days. You will need to schedule an appointment to have your car inspected. Once you have been approved to log on to the system as a driver, you can begin picking up riders right away. This is an advantage of driving for Lyft over apps like Instacart where you must wait to be approved for a certain shift.
Is Lyft available in my area?
Lyft is currently available in more than 300 cities in the United States and Canada. To check if it is available in your area, you can check their service areas at Lyft.com/rider/cities.
Can I drive for Uber and Lyft at the same time?
Yes, in fact many drivers choose to drive for both Uber and Lyft at the same time. Each platform has its pros and cons, and when one platform may not be providing any work, the other may have users waiting for a ride. For this reason, many drivers will actually start up both apps at the same time to see which one can connect them with a rider faster. If you choose to go this route, just be sure to turn off your availability in the non-active app once you’ve been assigned a rider in the other platform.
Is my car nice enough to drive for Lyft?
While Lyft’s vehicle requirements are slightly more rigorous than Uber’s, most 4-door sedans in decent shape will qualify. So, if your car is in good condition, has current in-state plates and registration, can pass a multi-point inspection, and is a 2004 model or newer – you should be good to go. Please note that the age requirements for your vehicle will vary by location, and a newer model vehicle may be required in order to drive in most major cities.
How do I reach Lyft customer service?
Lyft provides 24/7 customer service to its drivers and riders. Riders and drivers can both connect with a customer support agent by selecting “Get Help” in the Lyft app at any time.