The rideshare industry has been around for years now. Hundreds of thousands of drivers have taken to the roads with Lyft and Uber. It's likely that just about everyone reading this knows someone who's tried their hand as a rideshare driver. The industry has had a ton of buzz recently, so we thought we'd give you an overview of what it's like to drive for Lyft and Uber (from the perspective of real Lyft and Uber drivers).
The infographic to the right covers some of the essentials of driving for Lyft and Uber. It's definitely not an exhaustive list, but it includes some of the mane benefits as well as draws of being a rideshare driver. We'll go into a little bit more depth with regards to the topics below, they include:
- Hourly Guarantees
There are a few subjects that aren't touched upon below, but they're still important. Those are surge pricing, Lyft Line/Uber Pool and wage cuts.
We'll start with surge pricing, because it's the most beneficial to drivers. During busy hours surge pricing matches the demand for rides with the supply of drivers on the road. If you are driving in an area with surge pricing you get to add a multiplier to the rate you're currently earning.
Lyft Line and Uber pool are relatively new features. They're a product of algorithms used to fill empty seats in your car. The jury is still out as to whether or not this is actually beneficial for drivers. We know that it makes rides cheaper for passengers and puts more money in the pockets of Uber and Lyft, but it doesn't appear to have in impact on the bottom line for drivers.
Wage cuts are kind of a sore subject. They've managed to piss off a ton of rideshare drivers. But they tend to be just a big enough deduction from drivers' earnings to really piss them off but not push them to quit (at least not any more than the 50% turnover rate already accounts for)
One of the major draws to the rideshare industry is flexibility. Most people don't intend to be career drivers with Lyft and Uber. As a matter of fact, over half of all drivers will quit within their first year. Add to that the fact that about 70% of drivers only do it part time, and you start to see the bigger picture. Lyft and Uber provide a unique opportunity for people to leverage an asset (their car) in order to make quick and easy cash on their own schedule.
Insurance coverage is a highly publicized issue for both Lyft and Uber. Essentially, Lyft and Uber have great insurance coverage. They just don't provide that coverage for the full time that you are driving. You won't be covered by Lyft or Uber's insurance during what is known as period 1. This is the period when you don't have a passenger in the car. If you think about it, it's also a potentially hazardous time to drive. Most drivers are aware of the risk presented by this gap in the insurance coverage and they choose to drive anyways.
Tipping is a big plus for drivers. Until recently, Uber openly discouraged passengers from tipping. They recently opened up their policy to allow for tips, but there is no tip function built into the app. On the other hand, Lyft makes it very simple for passengers to tip their drivers. It's a big incentive to choose Lyft over Uber. Drivers can also take advantage of a Power Driver Bonus. They can do so by driving more hours each week, and the reward is a larger slice of their paycheck goes into their pocket.
A big draw for new rideshare drivers are the hourly guarantees and huge sign up bonuses. If you drive during set busy hours and give a certain number of rides in that time you are guaranteed an certain hourly wage. A lot of times this amount is more than drivers might earn otherwise. Furthermore, if you sign up with a referral code you get a lump sum of cash after completing a certain amount of rides.