If you have aspirations of being a driver, how much do Lyft drivers make should be a question on your mind. At this moment, you may be wondering, why Lyft and not any other brand. Well, you will have to find out as you read on, because we will be showing you not just how much Lyft pays their driver but why they pay and how they pay.
Lyft is a rideshare platform currently operating in the U.S. and parts of Canada. The platform was established in 2012 and went public through a Nasdaq listing in March 2019.
Lyft operates in over 600 cities in the U.S. and 12 in Canada. More than 2 million drivers operate on the platform, serving over 12 million customers.
But we aren’t here to talk about what Lyft is, however, it helps us to better understand where we are heading to.
Now let’s talk about how much Lyft drivers make.
How Much Do Lyft Drivers Make?
Before delving into precise figures, there are several key points that we need to address initially.
1. Lyft Driver Salary Per Hour
Since Lyft drivers operate as independent contractors, they do not receive a fixed salary. Instead, they have the opportunity to earn money on an hourly basis, determined by the per-minute rate for rides in their specific city.
Essentially, the more you drive, the higher your earnings as a driver can be.
However, even if you choose to drive on a part-time basis, your potential income can still be respectable, influenced by various additional factors.
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2. Income Varies by Service Level
Lyft provides various service tiers tailored to cater to diverse passenger preferences. These ride options encompass:
- Lyft (standard)
- Lyft shared
- Lyft XL
- Lux Black
- Lux Black XL
For instance, opting for a Lux ride can potentially result in higher earnings compared to a standard ride.
Similarly, Lux Black and Lux Black XL rides also have the potential for increased earnings. Additionally, these larger ride categories may lead to more generous passenger tips.
3. Income Varies by Location
In Tampa, Florida, Lyft drivers typically earn around $12.71 per hour. Charlotte, North Carolina stands out by surpassing the $15 mark, with rideshare drivers making an average hourly income of $15.53.
Across the state of New Jersey, independent contractors can expect to make approximately $20.58 per hour. On the other hand, the San Francisco Bay Area boasts the highest average hourly wage at $23.28.
Other cities fall somewhere in between these examples, with Seattle, San Jose, New York City, and Boston completing the top five. In these cities, Lyft drivers typically earn a minimum of $21 per hour on average.
Now that we know some key points to how much Lyft drivers make, let’s look at how much they make per hour, per week, etc.
How Much Do Lyft Drivers Make Per Hour?
Based on information from more than 3,700 salary reports on Glassdoor, the typical earnings for Lyft drivers average approximately $17 per hour.
According to data from Indeed, independent contractors can expect to make approximately $15.20 per hour.
However, it’s important to note that these averages serve as general guidelines and may not apply universally.
For instance, if you reside in a city with a higher cost of living, your potential earnings could exceed the average. Additionally, taking advantage of surge pricing and other fees can also lead to an increase in your overall income.
How Much Do Lyft Drivers Make Per Week?
The weekly earnings you generate are closely tied to your driving hours. If you maintain a full-time schedule of 40 hours per week, you have the potential to earn approximately $680 weekly.
It’s important to note, though, that this calculation assumes you have a passenger throughout every minute of those 40 hours.
In reality, downtime can occur, especially during periods when ride requests are scarce. Consequently, your income may vary, even if your schedule remains consistent.
How Much Do Lyft Drivers Make Per Year?
Based on an hourly rate of $17 and a full-time work schedule, your potential annual income could reach approximately $35,360. However, this calculation doesn’t factor in any days off or periods of downtime during your work.
According to Salary.com, the average annual income for drivers is reported at $36,603.
Those in the lower 10% income bracket typically earn around $24,758 per year, while individuals in the top 10% can expect to make approximately $52,078 annually.
If you aim to increase your yearly earnings, you might consider working more hours per day or taking fewer days off. However, it’s essential to weigh whether the extra income justifies spending more time away from home.
How Much Do Lyft Drivers Make Per Trip?
Earnings per trip can vary among Lyft drivers due to several influencing factors, such as their location and the chosen ride mode.
To illustrate, consider a driver who received $7.98 for a single trip. In this instance, the driver had two passengers on board and covered a distance of approximately two miles.
It’s worth noting that longer rides within the same city tend to result in higher earnings.
Furthermore, driving in a more expensive city can potentially boost your income. Additionally, opting to drive during peak times may also increase your per-trip earnings.
How Much Do Lyft Drivers Make in Tips?
Receiving tips can significantly boost your income as a Lyft driver. The amount you collect in tips can vary based on both your driving frequency and the generosity of your passengers.
There may be instances where you encounter passengers who are exceptionally generous and leave substantial tips. Conversely, you might also encounter passengers who either don’t tip or provide a modest tip.
However, it’s important to note that the more you drive, the greater your potential tips can be over time.
To increase your tip earnings, it’s advisable to strive for exceptional customer service. Consider having snacks or additional amenities readily available for your passengers.
Additionally, don’t hesitate to inquire about how you can enhance their overall experience to encourage more generous tips.
How Much Do Lyft Drivers Pay in Taxes?
Employees don’t have to handle the organization and payment of their income taxes, as these taxes are automatically withheld from their monthly paychecks.
However, when you work as an independent contractor, you’re legally considered a small business operator, and it becomes your responsibility to pay income taxes to the IRS (Internal Revenue Service) on the income you receive from Lyft.
It’s important to note that the income tax rate for employees differs from that for independent contractors, and there’s an additional self-employment tax to pay if you earn more than $400 in a calendar year.
Overall, as an independent contractor, you typically pay approximately 7.65% more in federal taxes compared to being an employee. However, this doesn’t necessarily mean you’ll owe a higher total amount.
You have the opportunity to reduce your tax liability by deducting job-related expenses such as your cellphone bill, tolls, snacks for customers, and mileage from your taxable income.
As a Lyft driver, it’s crucial to have a good understanding of state and federal tax matters. Incorrectly filing your taxes could lead to potential back taxes and penalties imposed by the IRS or state tax authorities.
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Determining the earnings of Lyft drivers is not straightforward, as it varies significantly based on various factors like location and customer demand.
As a driver, there are tactics you can employ to optimize your income. One effective approach is to focus on extended driving hours during periods of high demand.