Ride-hailing services seem like good side hustles, but is driving for Lyft worth it? Learn how it works and whether it's worth your time. #sidehustle #CentSai #sidehustles #Lyft #ridehailing #makemoremoney

Ride-hailing services seem like good side hustles, but is driving for Lyft worth it? Learn how it works and whether it's worth your time. #sidehustle #CentSai #sidehustles #Lyft #ridehailing #makemoremoneyOdds say that if you’ve ever worked a menial job for low pay, you’ve looked for ways to boost your income by working side hustles. These are gigs that you can do in your free time outside of your normal job to make some extra money, either to make ends meet or to stash in a savings account for the future.

There are a lot of different things you could do to make some extra cash. People sell plasma, work for pyramid schemes, and become drivers for ride-hailing services like Uber or Lyft. The last of these options is by far the most worth it, right? Don’t be so quick to assume.

If you’re a millennial — or anyone for that matter — the odds are good that you’ve heard of Lyft. It’s Uber’s main competitor, and just like Uber, Lyft is a ride-hailing platform for Android and iPhone. It's essentially the modern-day taxicab.

How Does Lyft Work for Passengers?

Lyft’s concept is simple. To order a ride, you first download the app to your phone and create an account. Once you add your personal details, including your credit card so that you can pay, you put in your destination and hail your ride. It automatically grabs your location from your phone’s GPS so that it knows exactly where you are. This way, there’s no confusion for the driver coming to pick you up.

Lyft uses special formulas that vary from city to city to calculate how much your ride will cost. Generally, there’s a flat fee. From there, the extra cost is added based on a combination of miles driven and minutes taken to get there. Below is a picture of Cincinnati’s rate breakdown, along with a sample screenshot of what a ride from Northern Kentucky University (NKU) to Paul Brown Stadium would cost at the time of writing.

Is driving for Lyft worth it | How does Lyft work | screen shot 1Is driving for Lyft worth it | How does Lyft work | screen shot 2

How to Become a Lyft Driver

It’s important to note that Lyft isn’t available in all areas. You can view their list of available markets on their site, but it’s not available in a lot of rural cities outside of metro areas. You should check to make sure it’s available in your city before you apply.

The process of becoming a Lyft driver is fairly straightforward. You go on the Lyft-driver application page and enter your personal information. This includes your SSN, date of birth, and phone number. They’ll also need things like pictures of your driver’s license, insurance cards, and vehicle registration.

Vehicle requirements vary from city to city. In Cincinnati, you must have a vehicle that’s from 2002 or newer with at least four doors and five seatbelts. For Lyft XL, you must have at least seven seatbelts. This is what I qualify for since I drive a minivan with third-row seating.

The total application process took me about 15 minutes. Within two days of my background and driving history checks getting approved, I was set to download the Lyft driver app to my phone and start making money.

There’s no interview process. Driver requirements vary from city to city, though, so read through everything in the application to make sure you’re not missing anything.

I chose to drive for Lyft instead of Uber because Uber wouldn’t approve my driver application. For some reason, the company had trouble verifying that I’d been driving for at least three years, so instead, I applied for Lyft. I’m not sure what went wrong with my Uber application, but many people drive for both Lyft and Uber to maximize their earnings.

Competition Between Drivers

There’s no real competition between drivers to speak of because rides are dynamically distributed to drivers on the backend of the app based on distance from the ride request. The closer you are to a request, the more likely you are to be assigned that ride.

I’ve never received an assignment that took me more than 12 minutes to arrive at the rider’s location.

Because rides are dynamically assigned to drivers by Lyft’s servers and not hailed like traditional taxis, if there are too many drivers online and not enough rides to keep them all busy, you could end up waiting for a while before you’re assigned a ride. One time during off-peak hours, I waited for nearly 45 minutes in a parking lot for a ride request.


How to Maximize your Miles

One of the biggest things that I’ve learned in my three weeks of driving for Lyft is that you can’t drive at just any time and expect to make a ton of money.

Lyft provides its drivers with charts of peak driving times in the app. These charts are based on historical ride request data that they’ve collected over the years, and they tend to be pretty darn accurate from my experience.

The best times to drive in Cincinnati, based on both the charts and personal experience, are Thursday, Friday, and Saturday nights between 8 p.m. and 3 a.m. These are the nights when people are going out to bars and having a good time with their friends, relying on ride-hailing services like Lyft to get them home safely. Peak times can vary from city to city, however.

There are also peaks during special events in the city and surrounding areas like sports games, conferences, concerts, and festivals, so it truly does pay to know what’s going on in your area when you’re a Lyft driver. These are peak times that won’t show up on those charts I mentioned earlier.

New drivers can qualify for a $1000 earnings guarantee if they:

 1) are approved to drive on the Lyft platform within 30 days of signing up and

 2) complete 125 rides within the first 30 days of being approved as a Lyft driver.

 As an example, if a Lyft driver earns $800 in the first 30 days of driving after 125 rides for Lyft, the remaining $200 difference will be granted to the driver.

How Much Does Lyft Pay?

I’m finally about to give you what you’ve wanted this whole time: how much money I make driving Lyft. In the last three weeks, I’ve given 56 rides in 25 hours and made $558, or roughly $22 an hour. This seems like great money, and it is, especially for a young college student like me. However, there are other factors to consider before you skip to the bank.

For one, I didn’t get paid what the riders got charged. For example, I gave someone a 21-minute, 10.28-mile ride last week. My passenger was charged $16.53 and tipped $4 for a total of $20.53. I was paid $10.39, plus that $4 tip, for a total of $14.39. The cut Lyft took between those numbers was $3.54 for the platform fee and $2.60 for a service fee, for a total of $6.14. I was paid roughly 63 percent of what the rider paid. This is pretty consistent across the board.

I generally earn 50 to 70 percent of what the rider pays, which seems fair.

Lyft provides me with a way to make money, and they have to pay for their backend services and administrative costs, so I’m completely okay with what I’m being paid.

Getting tips from riders is great, but it’s not required. About 30 percent of my riders leave me a tip, and I greatly appreciate it. It often helps offset the costs of gas. But just like in any other industry, cash tips are preferred because even though you’re supposed to report cash tips to the IRS on your federal income taxes, many people don’t.

Timing Is Everything

Another thing to factor in is that most of the money I made was on Friday and Saturday nights. I drove one Friday during the middle of the day, between 12 and 2 p.m., and only averaged about $9 per hour after factoring in gas costs. For me, that’s not worth the time or the miles I put on my car. This does vary greatly from city to city, however.

The most money I’ve ever made in one ride was on a day when I was working at the 150-percent prime-time rate, or “surge” pricing, which is similar to Uber. It’s essentially supply and demand in full effect. The price of rides goes up to encourage more drivers to come online to fill the demand. From the consumer side, you end up paying a lot more for a ride as a result of there being fewer drivers available. Why? Because Lyft can.

This ride was 2.5 times more expensive than a normal ride because of that increase, and it was an XL ride as well, so my car was full. I took them about 20 minutes away from downtown Cincinnati to a bar farther north in Norwood, and I made $50 from that one ride. The rider paid $66.50 total.

How Does Lyft Pay Its Drivers?

Lyft pays just like any other job. You’ll get paid by direct deposit every Tuesday. After you get approved, you put in your bank’s account and routing numbers within the payment section of the Lyft driver app.

Lyft also allows you instantly cash out up to five times a day for a 50-cent fee each time you cash out. You put your debit card information in the payments section of the driver app, and if your bank supports it, you can withdraw the cash you have earned and it goes into your account immediately. There’s a full list of supported banks listed in the app, but it works fine with my bank of choice, U.S. Bank. A glaring omission in the supported list of banks for my Cincinnati and Midwestern friends is Fifth Third Bank, even with it being the 27th largest bank in the U.S.

The Weirdest Ride I’ve Had

The weirdest ride I’ve ever had is the same one that earned me $50. I waited for a while for the riders to find my car because the street was blocked off for SantaCon Cincinnati. I had to park a street over and wait for them to come to me.

A group full of drunk people all dressed as Santa got in my car, and one of them, a woman, asked, “Can I pee beside your car?”

Keep in mind, this was 12:30 a.m. on a Saturday in Cincinnati, so there were at least a couple thousand people roaming the streets downtown. I stated the obvious: “You probably shouldn’t do that. A cop literally just passed us.”

She proceeded to say she didn’t care, squatted down beside my minivan, and peed in direct sight of at least 50 people. Somehow, she managed to not get a public indecency charge and climbed back into my car. We took off.

Now for the young lady in the passenger seat. She didn’t appear to be more than 25 or 26 years old, and she was obviously letting loose that night. She was climbing all over the place, spilling her cup of water and kept hugging me while I was driving. I let her control the radio, and she played Cardi B the whole ride. We were all jamming.

It was quite the adventure, and we eventually made it to their destination in one piece.

Lyft uses a similar system to PayPal, Venmo, and Cash App, which allow this instant deposit to your debit card through Visa and MasterCard networks. I’ve had no issues thus far, and cash out every time I finish driving for the day.

There’s no option to be paid by paper check with Lyft. I guess they assume that if you’re driving for Lyft, you’re tech-savvy enough to have opened some sort of bank account. But this does exclude the seven percent of the U.S. population that doesn't have access to traditional banking services.

The Costs of Driving for Lyft

The biggest cost associated with driving for a ride-hailing service like Lyft is that of gas. Lyft provides no compensation to their drivers for gas, so it comes out of your pocket.

In those 56 rides, I drove 880 miles. Since my minivan averages around 18 miles per gallon in combined city and highway driving, I used around 49 gallons of gas. The average gas price in my county at the time of writing is $2.35 per gallon, so that comes out to $115.15 in gas costs.

This brings my total profits from the last three weeks to $442.85, or $17.71 per hour. For a job that you can do with no degree or hour requirements and that has the ultimate level of flexibility, that’s pretty darn good.

Newer cars that are smaller and get better fuel economy will obviously cost you less money in gas to operate, so they’re more profitable to drive with.

Car maintenance is another cost you need to factor into your equation. I’ve driven more in the past three weeks than I had in the previous two months, so I’m putting miles on my car a lot more quickly than normal. This adds a couple of costs that I generally wouldn’t have to deal with as often: oil changes and tire rotations and purchases.

Oil Change

The cost of an oil change and service in my town varies, but it usually runs between $30 and $50. It’s generally recommended that you get an oil change either every three months or every 3,000 miles, whichever comes first. At the rate I currently drive, I’ll have to change my oil about every two and a half months.

It’s possible to change your own oil, but this often requires tools that many people don’t have, and it ends up costing nearly as much as a cheap oil change at a shop. The cheapest five-quart container of conventional motor oil and filter at O’Reilly Auto Parts totals $22.99 plus tax. A similar-quality oil change at your nearest Walmart auto center will cost just $19.88 plus tax.

Tires and Other Maintenance Costs

You’re supposed to rotate your tires every six months or 6,000 miles, so I would have to get my tires rotated about a month early, as well. This costs $25 to $50 at most shops and is sometimes free for the lifetime of your tires if you go back to the place where you originally purchased them.

These are just a couple of the additional maintenance costs you’ll incur. There are other factors that come into play that are hard to put a dollar value on like general wear and tear on your car’s engine and its components. If you have a higher mileage car that’s not very reliable, I wouldn’t recommend driving for Lyft or Uber.


Another cost to factor in is your tax obligation. As a Lyft driver, you're self-employed and receive a 1099 form instead of a W-2 at the beginning of the year. Because of this, you don’t have an employer automatically deducting your taxes, and you must factor them in yourself.

You’ll also have to pay in Social Security and Medicare taxes (15.3 percent in 2018) on top of your normal tax bill. If you made $5,000 driving Lyft in 2018, you'd pay $765 in these taxes on top of the normal tax rate for your income bracket.


Lyft provides general liability insurance up to $1 million per claim free of charge, and you’re covered during all your rides. That said, you’ll have to go through your normal car insurance for comprehensive or collision claims. But if they don’t cover you, your Lyft policy will. You can see your insurance policy within the driver app and view your coverage limits.

It’s important to know that some insurers require you to notify them that you’re using your vehicle for ride-hailing services. This may raise your premium, so check with your insurer for details.

Is driving for Lyft worth it? How does Lyft work? | Aerial photo of cars on a highway at night | Photo by Liem Ericson
Photo by Liem Ericson

The Risks of Driving for Lyft

As you would expect, there are a few risks associated with driving for Lyft. In the large metro areas where Lyft is particularly prevalent, there are plenty of areas where you wouldn't want to get stranded on the side of the road. Cincinnati is certainly no exception.

A lot of drivers choose to have some sort of personal protection in their vehicles. This could be a gun, a knife, or even just pepper spray. It's not a bad idea if you frequent rougher neighborhoods with high crime rates.

But there are other risks, as well. Most of the people you'll be picking up during peak times have been drinking enough that they know they shouldn't drive. That’s why they call you. Occasionally you'll have people who have imbibed too much and vomit in your car.

To be clear, I haven’t personally had an experience with this. However, I’ve heard my fair share of horror stories, including friends of mine who have thrown up in Lyfts. It’s not pretty or cheap to remove the stench.

According to Lyft’s terms and conditions, “If a driver reports that you have materially damaged the driver's vehicle, you agree to pay a ‘damage fee’ of up to $250, depending on the extent of the damage (as determined by Lyft in its sole discretion), toward vehicle repair or cleaning.”

Is Driving for Lyft Worth It? The Bottom Line

There are a lot of factors to consider when deciding if you should drive for Lyft. I think there’s a sweet spot where you have a vehicle that’s older, so it’s not depreciating as fast, but it’s still reliable and gets good gas mileage. This means that you’ll have the lowest possible costs associated with driving and be able to maximize your earnings.

The ability to drive whenever you want allows you to choose whether to earn a few hundred or a few thousand dollars each month. It’s this flexibility that makes ride-hailing services like Lyft and Uber so attractive to people looking to make money as a side hustle, especially during spending-heavy times of the year like back-to-school season or the holidays.

I can’t emphasize enough that all the numbers in this article are my own personal experiences in my short time driving for Lyft in the greater Cincinnati area. Your experiences and earnings will vary depending on your location, car, and other factors.