Rideshare apps have been a game-changer for anyone who wants to grab a relatively inexpensive ride, and most riders often pick whichever company is cheaper and/or faster. But for drivers, is Uber vs. Lyft better to drive for?
I’ve been a big fan of ridesharing from the beginning. Taxis have always felt kind of old, and they seem to take forever to get. Not Uber and Lyft – drivers come in minutes. And the reason they’re so available is because of the rideshare appeal…
Uber and Lyft offer side hustlers an easy and low commitment way to make a buck. Have a newish car? Have a phone? Have a little extra time? You can start earning money. Lots of hustlers like this plan, and that means a growing number of drivers.
Rideshare companies have been a pretty decent side gig from the beginning. But, as time has passed, policies have changed, and the field has been leveled, is driving for Uber vs. Lyft a better way to earn money?
To help you pick the best rideshare company to drive for, here’s what this article will cover:
- Pricing for Uber vs. Lyft
- Driver pay
- Sign-on bonuses
- Types of vehicles/services
- Customer service
- Where you can drive
- The apps
- Features of Uber and Lyft
- Brand reputation
- FAQs for driving for Uber vs. Lyft
Everything you need to know about driving for Uber vs. Lyft
1. Pricing for Uber vs. Lyft
What Uber and Lyft charge their riders will have a direct effect on what you earn, so let’s start here. I did a little research and scheduled some rides through both Uber and Lyft, and nearly every time, Uber was less expensive by $1-$5.
Now, what you need to know is that none of those rides were scheduled during peak hours, which will increase the cost of rides.
- Uber calls the price increase during peak hours surge pricing. They used to show you a multiplier, but now you are just quoted a higher price that the driver gets as a flat bonus for driving during that period.
- Lyft calls peak hours Prime Time and pricing is based on a percentage system. If Prime Time pricing goes up to 50%, a $12 ride would cost $18.
These peak hours are when there is an increased demand for drivers. Higher demand = higher prices. Drivers can use each rideshare company’s app to find areas where more rides are needed.
Related: Is Driving for Uber Worth It?
2. Driver pay
What has been frustrating many rideshare drivers is what both Uber and Lyft claim to take from each fare and what they actually take.
Jalopnik ran an independent study requesting fares and receipts from over 14,000 drivers. The study found that while Uber claimed to take around 25% of each fare, the reality is that they took closer to 35%. Lyft claimed to take 30%, while the study suggested that amount was more like 38%.
Uber did report its “take-rate” in regulatory filings when the company went public in May of 2019, and those filings claimed that Uber’s take-rate had been dropping, down to 19% in the first quarter of 2019. But, that information isn’t specifically for U.S. drivers only, and Uber is available in over 60 countries worldwide.
Lyft hasn’t publicly shared its take-rate.
I’ll admit that the Jalopnik study does have some issues when you consider how many Uber and Lyft drivers there are in the U.S. alone (around 2 million for Uber). But it’s still a pretty big bummer that so many drivers did report that there were times when Uber and Lyft took 50% or more of their fares. That’s nearly half of what drivers are expecting to make.
What does that look like per hour? In an independent study done by Ridester, it was found that Uber drivers made an average of $14.73/hour in 2018 once you factored in tips.
3. Sign-on bonuses
Both Uber and Lyft are motivated to find new drivers, and both companies run promos and bonuses to attract them. Uber has a guaranteed pay promo and Lyft offers new drivers a sign-on bonus.
Uber’s guaranteed pay promo lets you put in the city you would be driving in and then tells you how much you would earn if you completed so many rides in a set amount of time. Here are a few examples:
- $1,000 for 150 trips in Dallas, TX
- $2,500 for 400 trips in Chicago, IL
- $1,225 for 150 trips in St. Louis, MO
- $1,900 for 300 trips in Denver, CO
- $1,600 for 300 trips in Boston, MA
The way it works is that if you complete that number of trips in the set amount of time but don’t earn that guaranteed amount, Uber will pay you the difference.
Lyft’s sign-on bonus is an extra $1,000+ if you are able to complete a certain number of rides in your first 30 days. You can use the code LYFTMAX when you sign up to drive, but don’t use the code until you are really ready to start. The bonus isn’t retroactive.
4. Types of vehicles/services
For both Uber and Lyft, cars can be up to 15 years old for the lowest tier of service. But for Uber, drivers in D.C., Maryland, and New York City will need something even newer than that. For each company’s service, your car should be able to carry at least four passengers and cannot be salvaged.
Both companies offer different classes of vehicles that drivers can request. Regular Lyft and Uber X are the most inexpensive options if riders don’t want to share a ride, which they can do with Lyft Line and UberPool.
If drivers are willing to pay top dollar for a more luxurious or roomer ride, both Uber and Lyft offer more options that are virtually identical:
- UberXL and Lyft XL (was Lyft Plus): SUV with seating for up to six passengers.
- UberSelect and Lyft Lux (was Lyft Premier): A luxury sedan with leather seats and room for up to four passengers.
- UberBlack and UberSUV and Lyft Black and Lyft Lux Black XL: These are high-end luxury vehicles with both a black exterior and interior. Cars must be 2014 or newer.
- UberLux: Drivers must have commercial insurance and drive a 2010 or newer model. Brands like Mercedes, Porsche, Audi, and Tesla are a few of the recommended brands. This is only available in Miami, Los Angeles, and New York City.
Higher end service lines aren’t available in every city, and it wasn’t until recently that Lyft offered as many options. The only upper hand Uber has now is with UberLux, which is described as “for moments when you want to splurge and celebrate.”
5. Customer service
Both companies offer pretty comparable customer service for both drivers and riders through:
- In-app support
- Website support
- Critical response lines
When you read comments in online forums for drivers, what you’ll find when comparing Uber vs. Lyft is that Lyft generally offers faster and more helpful response. However, both companies are known for being quick to address issues reported in their critical response lines.
6. Where you can drive
If you’re trying to decide which rideshare company to drive for, one of the most obvious factors is whether or not they’re available where you live. Uber has Lyft beat by far here, offering services in over 63 different countries.
Lyft’s service map still doesn’t reach beyond the U.S. or Canada. But, like Uber, they are available in most major U.S. cities.
7. The apps
Both ridesharing companies have apps that feel really similar for both user and driver. They’re actually so similar that riders and drivers can easily switch back and forth between apps to find which fare will either cost them the least or earn them the most.
As a consumer, my only complaint is that Uber’s app is starting to feel a little more bogged down with offers for their partner companies, like Uber Eats or the Uber Visa Card. If I want a ride, I want a ride, not Chinese food delivered to my house.
Overall there is very little effect on the driver, unless one app just legit stops functioning as well as the other.
8. Features of Uber and Lyft
Both companies let riders add multiple stops on their rides, but Uber by far offers riders more features that could potentially pull riders away from Lyft.
Those features include:
- UberPool lets you split the cost of the ride with friends. Lyft did have a similar feature, but it’s been discontinued while they work on building and releasing a new one.
- Uber’s ExpressPool gives riders in some cities the option to walk to a location that’s easier for drivers to access and then be dropped off at a more driver accessible spot. The goal is to help riders save money, but this can also make it easier for drivers to get to their next fare.
Uber and Lyft both offer some version of wheelchair accessible vehicles. Neither one has a ton of access locations, but let’s hope these services continue to grow.
9. Brand reputation
As both rideshare giants have grown, neither has maintained a spotless reputation.
Business Insider recently reported on nearly 50 scandals involving Uber, that go back to 2010. Those include:
- Price gouging in New York during Hurricane Sandy.
- 350,000 current and past drivers filing a lawsuit against Uber claiming that drivers should be treated as employees to have access to health insurance and other benefits.
- A number of sexual harassment and assault cases.
- “God View” tracking.
While Lyft does have a cleaner reputation, to the point that they’ve been able to capitalize on Uber’s scandals. But, it’s been reported that Lyft employees have abused software to spy on customers.
All of that is pretty unfortunate for both riders and drivers. Not to be cynical, but we’re living in a time when most major companies have some kind of stain on their reputation. The hope is that Uber and Lyft learn from their mistakes and implement changes that offer drivers and riders a better experience.
FAQs about driving with Uber vs. Lyft
Can you drive for both?
Yes, and many drivers do this to increase their chances of earning. Many drivers even keep both apps open at the same time to make sure they’re available for as many rides as possible.
Who pays more?
Uber drivers generally earn a little bit more, but it’s not a huge difference.
Can you earn tips?
Yes! Drivers for both Uber and Lyft keep 100% of their tips. If you offer a sweet ride and stellar service, you’ll increase your chances. I’ve experienced drivers going out of their way to earn tips, from offering mints to having phone chargers ready and plugged in.
What if you don’t have a car and still want to drive?
Both Uber and Lyft have partnerships with rental car companies if you don’t have your own vehicle. You can read about Lyft’s program here, and Uber’s program here. I’d be a little wary of how much you would actually earn renting a car to use for rideshare driving, but do your homework and weigh up the pros and cons before going for it.
Do I need special insurance?
Yes and no. Most car insurance policies don’t offer rideshare coverage, but both Uber and Lyft offer collision coverage. Your out-of-pocket costs for both are:
- Uber $1,000
- Lyft $2,500
A number of car insurance companies now offer rideshare insurance that can be added to your personal auto policy, and those plans can range from $5-$20/month. This is for gaps in your coverage.
Both of these companies started out as disruptors that were trying to change not just the way people get from place to place, but they’ve also changed the way many people earn money. If you talk to any driver for Uber or Lyft about why they started driving… this is something I do a lot… you’ll hear that drivers started because they wanted a flexible way to earn more money.
And yes, Uber and Lyft have done that. Need some cash and have a little extra time? Pick up a quick fare. You can do it after you drop your kids off at school, spend an hour driving after dinner, or even when you’re bored… I’ve heard this from more than one Uber driver.
But rideshare driving isn’t the only option for flexible side gigs, and I can actually think of a number that pay considerably more.
When you factor in the wear and tear on your vehicle, extra insurance, and policy changes, rideshare driving isn’t worth the hype for some side hustlers.
The final word on driving for Uber vs. Lyft
The entire goal of my site is to help people find ways to earn and save more money. Rideshare driving can do that for you, no matter which company you choose to go with. Many drivers find that driving for both increases their chances of earning the most. For those that choose one over the other, it usually comes down to personal preference.
Whichever you choose, do yourself a favor and stay up to date on policy changes and keep track of how much you’re earning. If you start disagreeing with either company’s policies or find that you aren’t earning enough, find a better side hustle.