Ben Todd | Apr 16, 2017 | 3
Can You Make Money With Lyft Or Uber? Make Honest And Ethical Money
Lyft and Uber are social lift giving services, which some call peer-to-peer lift services, and others call ride sharing or ridesharing companies. Instead of taking public transport or a taxi, you check another person’s schedule and take a lift with him or her. You pay them a rate as determined by the website, and they either meet you in a location or pick you up from where you live (depending upon what you prefer). If you would like a cheaper and pleasant ride, then hire an Uber or Lyft driver. If you would like to make some extra money on the side, then become a part-time driver in your spare time.
Why Do So Many People Love Social And Peer-To-Peer Lift Services?
There are plenty of reasons why people prefer to take lifts from Lyft or Uber drivers. The taxi industry has become very complacent because they have only had to compete with each other, and even that is not enough to compel many of them to regulate how their drivers behave.
If you need to get somewhere and the public transport system is not an option, then you are forced to take taxis and drivers know it. It gives taxi drivers free reign to overcharge, speed, take long routes, forget personal hygiene and drive cars with dirty interiors. Some are also very threatening, rude, and sexually aggressive to young women.
That is not to say that all taxis are like this, but many drivers have and do take advantage of the fact they have no competition by portraying one or more of the negative traits listed above. People prefer Uber or Lyft because the drivers are more market driven. The drivers have to give a good service or they will not receive other passengers. These services have been attacked (legally and otherwise) because they threaten the monopoly that taxi drivers hold of the driving-service industry. Become a member of Lyft and Uber and both drive and ride.
Driver Accountability And Responsibility
One of the most powerful reasons why people get a better service with Uber or Lyft drivers is because each driver has to account for his or her actions. A poor quality service means negative reviews and fewer (if any) passenger bookings. If a taxi driver misbehaves, it looks bad on the taxi company but not the taxi driver. That is not the case with Uber or Lyft, which is why service standards are often far higher with rideshare drivers.
Update – December 2016
While on an extended trip to Texas (it is where I plan to retire one day in the very distant future), I was sat in an apartment with a nasty virus (my girlfriend) and a serious illness (her mother), and also I wasn’t feeling very well. I discovered I can order any type of takeaway online (even sushi), I could order my groceries online and have them here the next day, and I could order a fridge freezer and have it here the next day to. I can book a plumber online, a cleaning service online, and there is a company that will come to my house and change my tires that I can order over the internet.
What I couldn’t do on the internet was book a taxi. With Uber and Lyft, I can order a taxi online and with a mobile phone. I don’t know what it is like in your area, but even where I live right now, I may only order a taxi online if it is an advanced booking for an airport run. I cannot go on a website right now and order a taxi for this evening, but I can get a stranger with an Uber or Lyft account to come and pick me up. The fact that Uber and Lyft drivers may be ordered online is a big selling point that they have over “most” taxi drivers.
Honest And Ethical Money
Some say that you are taking money out of taxi driver’s hands, but taxi drivers have a massive advantage over ridesharing drivers. Taxi driving services can offer 24/7 services where few peer-to-peer drivers can. Taxi companies can offer professional drivers where ridesharing companies cannot. Finally, a taxi company can build a reputation, whereas social ride sharers live and earn by their personal reputation only.
If a taxi company decided to offer lower and more reasonable prices, and stopped their drivers taking the long route to earn more cash. If the taxi company created strict hygiene and car cleanliness policies. And, if the taxi company placed cameras and audio surveillance in every car to monitor the actions of their drivers, then people would overwhelmingly use that taxi company above all other taxi companies and peer-to-peer ride sharing services.
It is a glorious age. If you are angry with your utilities company, you can change it. When and if you are angry at your bank, you can use peer-to-peer investing. If you are angry at your taxi service, you can use ride sharing. It is a golden age people!
Drive And Ride?
If you have a car, then by all means, become a driver for one or both of the driving services. You should also become a member and ride, even if you have a car. There are times when you may not be able to drive yourself, such as if you are going to the airport, or you are going out and you are drinking. Become a driver, and become a rider too.
How Much Do The Websites Claim You Will Make?
The amount you make is going to vary depending upon your expenses, how much you claim in payment for each ride, and upon how many customers you can pull in per month. There is no set amount that you can make, though Lyft says you can make up to $35 per hour.
Note that they say you can make “up to” $35 per hour, and not that you definitely will make that amount. There are many variables that may alter your take-home wage.
Uber does not say how much you will make, but there are occasionally studies and reports conducted around how much they make. Just like with Lyft, the amount each person makes will vary widely depending upon factors such as expenses, time spent, and so forth.
How Both Of The Rideshare Companies Work
There are a few subtle differences between Lyft and Uber. You apply to be a driver and use either your car or a rental car that the ridesharing company sets you up with. Flip your status to driver mode or show via the service that you are ready to take passengers.
People will make ride requests, and you will be able to pick people up and drive them places for a set fee. Once you are paid by the Uber or Lyft user, you are able to rate each other. The higher your driver rating is, then the higher the chances are that you will gain more passengers in the future. If you have a higher passenger rating, then it is more likely that drivers will pick you up in the future.
What Expenses Will You Generate?
Below is a list of expenses that you have to absorb. Your rate, as set by both you and the ridesharing website, will determine how much you are able to charge the rider/passenger. You are not allowed to ask for extra for tolls, car washes or anything else. Even if the passenger makes a mess in your car, you have to have it washed at your expense, and then give that passenger a bad review so that other people do not pick him or her up.
You are going to have to pay for gas money, and there is no saying how much it will cost from one location to the next. With a little clever budgeting, you can figure out how much your fuel will cost per mile and make assumptions about your profits.
Carwashes and Cleaning the Interior
For the love of carrots, do it yourself, and you will save a bundle. However, if you are thinking of making driving a part-time job, then strike a deal with a local car washing and detailing company for a regular-use discount.
This is not an extra expense. You should have insurance anyway if you are using your car. If your claim is denied for some reason, then the Uber or Lyft insurance may help, but your claim should not be denied if the accident is not your fault. You do not have to tell the insurance company that you were giving somebody a lift; you can just say you were traveling from one place to another for work or leisure reasons.
You cannot charge your passenger extra for tolls. If your route involves tolls, then you need to absorb them into your profits. They are often a small price to pay.
Pay your frickin taxes. Your country gives you so much, including protection from destruction by Iran, or invasion by the Chinese or Russians. The least you can do is pay your taxes.
Car Maintenance And Depreciation
Congratulations for coming to the correct website to discuss this matter because we will help shift your focus from expenses to wealth building. Below is a more in-depth section on car maintenance and deprecation, suffice it so say that you need to budget for your losses. You need to decide a loss amount per trip and apply it to each profit projection. The sections below explain what to do.
Calculating Your Car Depreciation Expenses
The IRS says you are allowed to depreciate your car for five years at 20% per year. A business car may not be depreciated at such a high rate, but your car is a mixed leisure, getting-to-work, and part-time rideshare-driver car. Still, since we are only dealing with how much profit you will make, you can depreciate by 20% for each year until your car reaches 10% of its initial value.
20% / 365 days = 0.05%
Every day you work as a driver, at the end of the day, you should knock 0.05% off your profit projection for depreciation.
Assuming your car is worth $10,000, here is how it may look:
$12 Carwashes and Cleaning the Interior
$0 Insurance *
$5 Depreciation **
$?? Maintenance (Covered in the next section)
$123 Sub Total
$18 Self-employment taxes**
$105 Total Profit
* This calculation assumes you are not using and insuring a car just to be an Uber or Lyft driver. It assumes you use your car for leisure and work too, so insurance for being a rideshare driver is zero.
** It is very low per day, but don’t forget that this is a daily expense that you also incur on days when you use your car yourself and not to drive others around.
*** Assuming they are 15%.
Calculating Your Car Maintenance Expenses
There is no way of knowing what your car maintenance costs will be, or just what will happen that damages your car. You may burst all four tires while nipping to the store, or while driving a passenger. Your gearbox may fail because of the trip you took to the beach, or because of the trip you took your (Uber or Lyft) passenger on.
Your best and most prudent course of action is to slice a portion of your profit from each ride and put it in a savings account. Put it in a savings account that earns interest and DO NOT TOUCH IT for anything else other than car repairs and maintenance.
Not only is doing this a wise course of action, but it also ensures that your new Uber or Lyft driving venture helps to pay to run your car. You are going to have to pay for maintenance anyway, even if you do not become a rideshare driver, so why not let your rideshare venture pay the biggest part of the bills. Just make sure you do not touch your maintenance savings for anything other than maintaining your car, and make sure you slice a piece from every trip you take. Here is how the new profit breakdown will look.
$12 Carwashes and Cleaning the Interior
$123 Sub Total
$18 Self-employment taxes
$105 Sub Total
$21 Maintenance at 20% into savings account
$84 Total Profit
Do not forget that you would have to work over 11 hours on minimum wage to earn $84. You can bump that amount up to $96 if you wash and clean your car yourself and do not pay others to do it.
What Are The Pay Rates?
They vary depending upon what you decide, and what type of service you offer. For example, if you are able to offer an SUV service, you may be able to charge more.
There are some people who are making only $5 per hour, but such instances are rare, and you can often earn at least $12 per hour even on your worst days.
Lyft Pay Stubs
Uber Pay Stubs