Rideshare – Uber vs. Lyft

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In all likelihood, you have used rideshare services.  Maybe you have taken an Uber to the airport.  Or maybe you’ve caught a Lyft from the airport.  But have you ever considered driving for Uber or Lyft?  Rider or driver, if you’ve never done one or the other, keep reading for a bonus.

UbervsLyftRideshare

Providers: Uber and Lyft

Rating (as a passenger): five-stars

Rating (as a driver): 3-5-stars

Note: There are other rideshare companies, such as Sidecar, that exist in addition to Uber and Lyft. I decided to limit this post to Uber and Lyft because they are the biggest and the only ones that I have personally used and driven for.

 

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Introduction


The rideshare industry came about as one of the first “asset monetization” industries.  The thinking goes like this.  You have an asset (your car) and some extra time, so you decide to use this asset to make money.  In this case, you use your car to provide rides to people who either do not have access to a car, or for whatever reason (going out drinking, no parking, etc.), do not want to use their personal vehicle.  So you give them a ride, and they pay you for the favor.

Screenshot_2016-08-13-17-29-57
Uber User Interface
Screenshot_2016-08-13-17-29-21
Lyft User Interface

Rideshare companies streamlined the whole process by providing apps that make calling for a ride super easy.  You just open the app and click a button.  The app will automatically call the nearest driver.  You can enter your destination or simply tell your destination to your driver.  Everything is handled via GPS on the rider’s and driver’s respective phones.

The drop off process is just as easy.  When you reach your destination, the driver stops and you get out.  That’s it!  Payment occurs automatically through the app, so no cash needs to change hands.  One exception is if you are in an Uber and want to tip your driver.  The Uber app does not include an option to tip, so if you want to tip your Uber driver, you will need to give him cash.

In general, riders love rideshare companies as compared to traditional taxis.  The prices are much lower, and the drivers arrive much more quickly.  However, the price can increase drastically if there are more riders requesting rides than there are drivers to answer the requests.  Uber calls that “surge” and Lyft calls it “prime time.”  It is something that every rider who uses these services needs to be aware of.

 

Driving for Uber or Lyft


To become a rideshare driver you need:

  1. A vehicle that is not too old;  how old varies from location to location.
  2. A valid drivers’ license
  3. Proof of insurance in your name
  4. Current registration in your name
  5. Current inspection sticker

Additionally, to drive for Lyft, you will need to schedule an appointment to meet with a Lyft Mentor for a vehicle inspection and a test drive.

The rideshare company will run a background check on you, and if you pass, you can start driving.

So what is it like driving for Uber or Lyft?  Well, it is actually a  lot of fun.  You get to meet a lot of great people, many of them from all over the world if you live in a popular tourist destination.  You simply go online and wait for a call.  Where you wait is entirely up to you.  You can wait “downtown” where there might be lots of calls, or you might choose to wait at your house so you don’t need to put any uncharged mileage on your vehicle.  The entire process is up to you.

 

Pros and Cons


Pros

  • Set your own hours
  • Earn as much as you want
  • Start earning immediately
  • Get paid weekly
  • Meet lots of interesting people
  • Fun
  • Relatively stress free
  • Tax deductions

Cons

  • Cannot set your own prices
  • Responsible for your own expenses
  • May experience hostile regulatory environment
  • Insurance requirements unclear
  • Wear and tear on your vehicle
  • Safety concerns

 

Should You Drive?


Ultimately, your decision to become a rideshare driver will depend on many factors.  The biggest positive is the ability to set your own hours and earn as much as you want by driving more hours.  But what about the negatives?  Here are some of the concerns people have when driving.

Expenses

Aside from most drivers’ biggest fear of a passenger who had a few too many regurgitating that few too many back into their vehicle, there are real expenses associated with driving for Uber or Lyft, including:

  • Depreciation
  • Maintenance
  • Tires
  • Fuel
  • Cleaning
  • Optional Amenities (Chargers, snacks, water, etc.)

These are real expenses that will have to be deducted from what the rideshare companies pay you to determine whether it is worth it.  For an analysis that tries to calculate the average net pay of Uber drivers, check out this video.  It does not paint a rosy picture of the rideshare environment for drivers.

Does this mean no one makes any money driving for Uber and Lyft?  Not exactly.  It just means you have to know a few tips for increasing your earning potential.  For a great site that offers tips, check out The Rideshare Guy.

Safety Concerns

Uber Lyft DriverWhile rideshare companies perform background checks on their drivers, no such check occurs on the riders.  This creates some concerns that drivers have about possibly picking up someone who would do them harm.  It is a valid concern.  Many female drivers choose not to drive at night.  Others may not drive at all.  On the flip side, one could argue that the rideshare industry has been around long enough that if there was a legitimate threat to drivers, we would be seeing multiple cases.  With the possible exception of a few high-profile instances, there really has not been much news concerning the safety of drivers.  Some of the reasons for that may include:

  • For the most part, Uber and Lyft are cashless
  • Riders must be registered with credit card or PayPal information
  • The car is being tracked via both the rider’s and the driver’s GPS

But, ultimately the choice to drive is an individual decision, and you will have to decide whether the benefits are enough to offset the safety concerns.

Note: If you would like a way to work for yourself without these drawbacks, click here for a review of my #1 Recommended Product.

 

Uber vs. Lyft: Which is Better?


ubervslyft-2So both Uber and Lyft operate in your city, and you have decided to drive.  Which do you choose?  That’s easy.  Sign up for both.  That way, your options are open when you decide to start driving.  You can drive for Uber one day and Lyft the next.  Or leave both apps on and just answer whichever call comes first.  Just be sure go offline for Uber when you get that Lyft call and vice versa.  Otherwise you might get a call when you’re on a ride.  It’s not a disaster because you can ignore a call, but there are consequences if your acceptance level gets too low, up do deactivation of your driving privileges.

If you do not want to drive for both companies, or only want to drive for one at a time, here are some factors to consider:

  • Who has more riders?  More riders = more money
  • Who has more drivers?  Generally, more drivers = less money
  • Can both companies pick up / drop off at the airport?
  • Which one is surging or prime-timing at any given time?

My own personal opinion?  All else being equal, if I were to choose only one, I would choose Lyft for the following reasons:

  • Lyft allows tipping within the app, so more riders tip with Lyft.
  • Lyft starts charging the rider as soon as you arrive at their location, so riders don’t keep you waiting as long.
  • If you meet certain milestones, you get to keep a greater percentage of your fares.
  • From my experience, Lyft tends to have higher brand loyalty with riders. (BTW, others disagree with me on this, so grain of salt.)

 

The Verdict


If you have a full time job and want to earn some extra income, driving for Uber or Lyft can be a great option.  You can set your own hours, so you can drive before work, after work, and on holidays and weekends.  If you are looking at driving full time, it will become more important to think out of the box to maximize earnings.  Some of the tips I follow:

  • Establish a regular clientele of riders
  • Stop chasing the surge or prime time
  • Avoid the herd of other drivers
  • Stay near conventions and other major events
  • Stay near hotels early morning when people typically need rides to the airport

You can make a living driving for Uber and Lyft.  You just have to be smart about it.

 

Bonuses


OK, you made it this far, and I promised you a bonus if you made it to the end.  These bonuses are for first time riders or drivers, so only click on the links if you have never ridden or driven for one or the other.

New Riders

$15 Off Your First Uber Ride

$15 in Ride Credit on Lyft

New Drivers

$100 Bonus for New Uber Drivers

$150 Bonus for New Lyft Drivers

 

If you have any questions, please drop them in the Comments below.  And if you drive already and have tips for new drivers, I’d love to hear them.  Now get out there and start driving!

Have a great day!

Andy

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4 thoughts on “Rideshare – Uber vs. Lyft

  1. This is a great review of ridesharing. I’ve taken Uber a few times and have always had a good experience as it was really convenient. As a female, I’m still not sure if I would want to ever be a driver, but can see how it might work for others. I see it coming to more and more cities and so it must be working well. I think I’d have to wait and see a little more before it could become and option for me.

    1. I totally understand your reluctance to become a driver, though we have a few Rideshare groups here in New Orleans, and we have a lot of female drivers who do quite well. For most of them, their biggest complaint is the college guys they pick up hitting on them. I don’t know if you have Lyft in your area, but if you do and have never used it, go ahead and click here for $50 in ride credit. I don’t know how much longer they will be offering that.

  2. Hi,
    Great information on the two. I have carpooled before but never used those you described.Do you ever worry about being robbed or carjacked? In terms of gender, have you noticed more males doing this type of job? I know if I mentioned this to my husband he would not allow it.
    Thanks,
    Sofia

    1. Hi, Sofia. I do not have all the statistics, but in the drivers’ groups I belong to, there seems to be a 50-50 split between men and women drivers. I think that is good because some women passengers are more comfortable with a woman driver. Since there is no cash changing hands, I think the chance of robbery is pretty low. Plus, everything is tracked via GPS, and every trip is logged into the system, so they know who the passenger is and who the driver is. I think that creates a disincentive to commit a crime.

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