Lyft Driving — First Week Impressions

Ever since I started calling for rides from both Uber and Lyft a couple of years ago, I have wondered how it feels to be on the other side as a driver. For one, do drivers like to talk to their passengers? I always enjoy chatting to the drivers, to learn about their personal stories as well as general stories from driving — but often wonder if I come off as “nosy”.

About a month ago, I noticed that Lyft was running a promotion of offering a $975 bonus for 245 rides or more in the first 60 days. It seemed a lot of rides to give but with the holiday season coming up and the fact I know the DC area pretty well, I thought it was a good opportunity and finally applied. To my pleasant surprise, I was approved within a day after completing all the application documents and was good to go! Thus began my new side project, which I anticipate to only be temporary and will likely not even complete all 245 rides required for the bonus.

Let’s start with the noteworthy basics I’ve learned from application to first day of driving:

• Lyft has a separate driver app — the driver app is intended to give a more driver-centered UI and functionality, which I quite like. In particular the ability to “go online” at the touch of a button and likewise accept ride requests is nifty to say the least. I’m impressed by the hand-off feature to Google Maps for routing and navigation, which is largely seamless.
• Lyft has a number of incentive schemes — initially I was confused by the terms “Power Zone” and “Prime Time”, but realized both were terms Lyft uses to incentivize drivers to stay out and give rides. This is in addition to bonuses such as my sign-up promotion.
  - “Power Zone” has pre-determined regions or zones that are provided to drivers the week before, that lists the regions where there is a bonus for specific times. E.g. Accepting rides 6–7am in Arlington yields at 40% payout bonus.
  - “Prime Time” is similar to Uber’s “Surge” pricing, which basically means fare prices are higher during specific zones. I suspect the algorithm is basically whenever a driver availability ratio drops below a certain number.
• Lyft application process is simple and can all be done online — I was able to submit my driver’s license, car insurance, safe inspection record, and car registration all online. I should note that Lyft apparently also has an office location in Pentagon City I could’ve visited for any issues.

Overall impression of driving for Lyft is that it’s not much different than giving rides in general, with the key difference being the passengers are all strangers. In other words, it’s not so different than driving a friend or co-worker to places…minus the cost aspect. Anyone with a decent car can do it, though ideally you’d live in a large metropolitan area.

I think the ideal driver is someone who is sociable and chat with passengers but also able to recognize those passengers who prefer to be left alone. I’ve found that most passengers enjoy conversing with their drivers and vice versa — otherwise it’d make for an exciting hours of silent driving. It also helps to be able to set oneself a schedule and commit a certain number of hours driving per day/week, because otherwise procrastination takes over and you earn next to nothing. Above all, you have to like to driving or at least not mind it — I personally do not enjoy driving (hence this is a time-boxed side project). Others are common sense things like keeping a clean vehicle, asking passengers about temperature and music preferences, offering water and handling their luggage.

The biggest surprise I learned after a week of driving is that…driving for Lyft is less glamorous than I had thought it would be. After the first ride and day, it becomes rather monotonous and I couldn’t imagine it as a full-time job. Certainly the best part is that you do become your own boss and can drive for as long as and whenever you’d like, especially for the supplemental income. But I suspect also I obtained a glimpse of the life of a taxi driver.

One major topic I’d like to address is on revenue and payments. As an anecdote, I drove for 14hours last week for 39 rides and on paper earned $300 doing so. My biggest payday was a marathon 7-hour stint that had me literally drive all over the DC region, including quite a few times to Reston/NoVA. At face value, $300 for 14 hours of driving sounds great as it averages to be just over $21/hour (more than double minimum wage)! But this cost does not include car maintenance, gas, and devoid of any benefits such as healthcare whatsoever. Again, this reinforces the notion that Lyft (or Uber) driving is ideally a side gig and not expected to be the main source of income/livelihood.

Furthermore, I also realized that Lyft takes a commission from both the driver and the passenger. The driver commission is fixed at 25% of the total fare, which all well and publicized by the company to drivers. I see the total fare after every ride, including the breakdown between the fare price, bonuses, and Lyft commission. But that is not the fare price neither seen nor paid by the passenger. Rather, Lyft charges a higher price to the passenger for what I’d imagine is another commission or “ride-hailing price” that also includes any bonuses or real-time pricing adjustments (e.g. Prime Time). I don’t see any issue with this “passenger commission”, as I’ll call it, since it’s what probably Lyft largely uses to compensate drivers for bonuses like Power Zone ones aforementioned. It just would have been nice for transparency purposes to show drivers the same amount charged for passengers — which again I’ll venture to guess Lyft intentionally avoids as it would make that advertised 25% driver commission look more like 40–50%. Because this means that out of $10 total fare, Lyft potentially collects as much as $5 for the matchmaking service it provides! As a Lyft passenger, I do not see any breakdown of fares and prices so this is interesting and important to note.

To wrap this post up, it’s been a positive first week and I’ll continue to do Lyft rides for the next 2–3 weeks. It has definitely been a great learning experience, on DC geography, Lyft company and driving. As an aspiring product manager, I already thought of some ideas to improve the experience for drivers and will be documenting those in a future post!