What ride share pays the most?
Updated: Nov 15, 2020
Ride share offers a unique business model for people to earn extra money, on their time, and when they want. If you sign up to be a ride share driver you are most likely doing so to supplement income or make extra money on the side. Even if you are considering doing it full time, it is a good idea to know which ride share company will pay you the most.
In this article we will examine driver data from across the nation to get a good sense of who pays more: Uber or Lyft?
The question of which ride share pays the most is a very complex one and there is not a clear and concise answer. The amount you earn driving with either company is contingent on many factors such as how often you drive, you'r driving strategies, your determination, the type of vehicle you have, when you drive, as well as your operating expenses among other things.
So, how can we start to get an idea of who pays their drivers more: Uber or Lyft?
First, lets take a look at which company takes more in driver commission (since ride share drivers are classified as independent contractors and are essentially their own boss, they have to pay Uber or Lyft a commission for using their software and platform). So, who takes a higher commission cut? According to Uber, they advertise as taking a 25% commission rate from drivers while Lyft advertises a 20% commission rate taken from drivers. From the surface, this would lead you to believe that driving with Lyft would amount to more earnings as they advertise taking a lower commission rate, but that is not the whole story.
When a rider opens their app and requests a ride, they will be charged a "booking fee" which is paid directly to Uber which they in turn use to cover operating costs as well as safety expenses. It is important to note that the uber driver never see's a cent of this "booking fee." The rider also pays the travel expense which is the part which is split between Uber and the driver. For Uber, this "booking fee" varies from state to state and city to city but the approximate average is anywhere from $1.90-$2.50. Uber raised this fee recently which makes the rider have to pay more money while the driver does not see an increase in pay.
For Lyft, they call it a "pickup fee" which is the exact same thing and has a national average of $.95-$2.05 and is also paid in full to Lyft and none to the driver.
So, if you factor in the "booking fee" or "pickup fee" plus the 25% commission that Uber takes from the travel fee, the actual commission averages out to about 40%. This is very similar with Lyft with an average around 35%.
So, what are drivers really making?
If you've seen Uber or Lyft ads advertising driver's making anywhere from $20 to $30 an hour, this is not completely accurate, although at certain times it can be true, but certainly not the average. An advertisement of $30/hour leads you to believe your pay will average out to that amount per hour when in reality their advertisement of $30/hour is the high point. There will be times when you get a couple quality rides back-to-back and get paid out $30, maybe even in less than an hour. But these type of earnings in a typical hour of driving are few and far between.
In reality, after questioning our customers on this issue, the average amount per hour, nationwide, that Uber drivers make is closer to $15.50/hour and that is before you factor in the cost of operating expenses such as gas, vehicle maintenance, and other expenses associated with your ride share business. After questioning Lyft drivers on the same subject, the average was around $17/hour. This survey was done on 100 of our Uber customers as well as 100 of our Lyft customers who range from all parts of the United States, so it does offer somewhat of a reliable average, nationwide, of what the average Uber and Lyft driver make per hour.
But, as I mentioned before this is the amount they make per hour before expenses. It's pretty easy to see that after factoring in expenses and taxes, the average ride share driver can end up making well below minimum wage on average. That is why I always have recommended ride share driving as a side hustle or a means of making extra money on top of what you are already making given the flexibility of the ride share business model allowing you to adjust your driving time around your main schedule. But for those who do it full time, it is possible to make much more than this if you apply several strategies and tips that we talk about in our article on How to make more money driving for Uber and Lyft?
In the end, which one is better Uber or Lyft?
It is very interesting that out of the 200 customers that we questioned about how much they make per hour driving with Uber versus driving with Lyft, we also asked them which company they prefer driving with more Uber or Lyft and 151 of the 200 drivers said Uber.
After asking why, there were two main answers that we received. First, drivers said that Uber has a more professional persona than Lyft which leads to more business men and women using their platform for their business needs and travel. More importantly, most of the time, these people tip very well.
The second reason is that with Uber, although they take a higher commission rate than Lyft, the drivers get more ride requests per hour than Lyft. In fact some of our customers said they usually get double the requests when driving with Uber over driving with Lyft on average.
Our best recommendation is to try out both platforms and see the results for yourself. One day try only Uber and the next day try only Lyft and then compare your results to see which one works best for you. If you are planning on jumping into the world of full time ride share driving we would recommend driving with both apps on at the same time. Either way, good luck!