San Antonio Express-News (Sunday)
Testing the gig economy by driving for Lyft over two weeks
I’ve wondered for a few years about ride-hailing jobs. Can you make good money? Are they truly as flexible as they seem? Does it feel weird or dangerous to share a small enclosed space with total strangers? Is it hard to get started or figure out how the app works?
Let’s begin with those final questions. Signing up is shockingly convenient. On Sept. 22 I gave Lyft — via its app — my Social Security number, driver’s license number, vehicle license plate number, insurance card, car make and model. I took the seven-minute tutorial on community guidelines. (I don’t mean to brag, but I’m a fast reader, so I finished the tutorial in four minutes.) I agreed to submit to a background check and was approved to start driving Oct. 3.
No muss, no fuss and no human contact with anyone. Essentially a frictionless onboarding process.
More than a month later, I still haven’t spoken to anyone from the company, which is great from my perspective.
I had some nervousness about the first ride. Would people be rude? Would they find flaws in my car? To be safe, I invested in a $40 car wash ahead of time.
Ease and fun
One big positive is the extraordinary flexibility of the work and the comfort of driving.
The ability to sign up and then work as much or as little as one’s heart desires makes this an unusually cool type of gig.
After dropping off my child at school I could turn on the app without obligation — like throwing a fishing line into a lake to see whether there are any bites. Half the time I would get a rider by the time I returned home. The other half I wouldn’t, which was also fine.
One day I had very little going on, so I decided to
“grind” for four and a half hours. I made $107 that day. By “grinding,” I don’t really mean it was tough in any real sense. My car seat is comfortable. My music is pleasant and chosen by me. Air conditioning keeps the temperature just as I like it. It was all perfectly gentle work.
One morning, after the day’s school drop-off, I picked up a man with an angry red infection around a hole in his arm. He needed a short ride to a methadone clinic. He’d started on methadone six years ago after his doctors abruptly cut off the opioids he took for pain. Also, there were some complications with his housing, which he was afraid of losing. You know what? I didn’t mind hearing his story and offering a little empathy about his struggles.
A few times, I jumped out of the car to load groceries from Walmart or Sam’s Club into my trunk, then jumped out again to haul them onto the passenger’s doorstep. Later, I enjoyed serving as a 10-minute crash-course tour-guide on how to best spend the annular eclipse weekend in San Antonio for a young couple riding from the airport to their downtown hotel.
I’m an introvert, but seeing people mostly one at a time was actually fun.
The business
The business? That’s another subject.
Lyft shares are near their absolute low since the company’s initial public offering in 2019 and the stock has been in the doldrums throughout 2023. The company has yet to turn a profit. Ride-hailing company Uber, meanwhile, is reportedly on the cusp of reporting a profitable year, its first.
In September, Lyft had an estimated 26% market share versus 74% for Uber, according to Bloomberg’s Second Measure data analytics.
Uber also boasts slightly higher monthly revenue per riding customer than Lyft — $93 versus $87, respectively.
Business Insider recently reported that Uber and Lyft claim to pay as much as $35 and $36 per hour. Meanwhile, some drivers report their estimated pay at $22 per hour. Others say the net pay after expenses drops to between $4 and $8 per hour.
I did this for two weeks and consider my experience a legitimate sample of the ride-hailing business. While limited, my own experience, taking into account expenses and depreciation, put the pay closer to the lower end of these estimates.
My verdict
I found it surprisingly fun to meet total strangers for a short time, share a few comments about the temperature and traffic and then have them leave my life, probably forever.
I never felt unsafe. Methadone man was perfectly calm.
The biggest downside clearly
is the pay, which is minimal. Lyft tracks “online time,” corresponding to the amount of time in which the driver’s app is open to rides, which can be compared to “driving time.”
The high pay rates reported by the companies derive from “driving time,” but that doesn’t take into account the time spent by the driver waiting between rides for the next match on the app.
I logged 11 hours and 48 minutes in the first week with a payout of $235.13. That implied a gross pay, before taxes and expenses, of $19.93 per hour. The gross pay in the second week I’d peg similarly at about $20 per hour.
Subtracting a full tank of gas and car wash, I calculate a lower net rate of $15.58 per hour for my 11 hours of driving that first week.
An important factor that over time would further reduce the take-home pay is wear and
tear on one’s vehicle. Let’s put the cost per mile on your vehicle at $12.5 cents. I got that by assuming you could buy a vehicle for $25,000 and drive it for 200,000 miles. Two weeks of part-time driving could add an estimated 1,000 miles to your odometer, which we could say “costs” you $125 of wear and tear. With that kind of vehicle depreciation, you should probably consider that the true income from ride-hailing work is something significantly less than $15.58 per hour.
This is definitely less than what an unskilled warehouse worker could make, according to advertisements around town, which is why I’d say ride-hailing gig-work pay compares badly to other jobs that do not require industry experience.
Anecdotally, drivers who dedicate themselves professionally to this — I do not consider myself in that category — use the Lyft and Uber apps to maximize their driving potential. They also do not drive only when it’s convenient for them — as I did — but rather strategically choose to drive Friday and Saturday nights, during known busy and peak hours. The pay would very likely go up using both apps, driving at night and driving at peak times.
Overall, this side hustle seems ideal for a retired person who doesn’t need the money to pay bills but appreciates additional spending money.
Besides retired people, it seems like ride-hailing gig work could function very well for a person who periodically needs a legal way to come up with $100 quickly. Grind for six hours and boom, you’ve got the $100, assuming gross pay of
$120 — at $20 per hour on average — minus the cost of a tank of gas.
On the other hand, if you’re trying to earn enough to support yourself and pay bills, this is a very low-pay way to do so.