How to Earn More as a Lyft Driver: 10 Proven Secrets
Working in the ridesharing industry provides ample opportunity for drivers to make money working their own hours.
Do you drive for Lyft as your primary source of income? Do you drive on occasion as a way to pad your bank account with extra cash?
Whether you’re a full-time or a part-time driver, Lyft can be a great way to earn some money.
But the truth is, most drivers aren’t making as much as they could be. If you’re ready to boost your earnings as a Lyft driver, you won’t want to overlook these tips.
1. Drive in the city
There’s no question about it – big cities like New York, Los Angeles, and Chicago are typically much busier than suburban areas.
In the city, you can move rather quickly from one job to another, and when you drop a passenger off, it’s easy to find another one nearby.
Driving in the city can help you save money on gas as well as car maintenance and repairs. That’s not to say you can’t make money driving in the suburbs – you can.
But the rides are fewer and far between. And driving a distance to get from one town to another means you’ll spend more on gas.
2. Make the most of peak hours and prime time
A great way to increase your earnings is to drive at peak hours and prime times, which is very similar to Uber’s surge pricing.
During those hours you can earn more money per ride. Peak hours are those in which Lyft is busiest.
Drivers earn an increased wage for every ride they do during those periods of the day.
Peak hours and rates vary from city to city, but in most cities, they tend to be the same hours from day to day. In most cities, peak hours coincide with commuter times.
That usually means the hours from 6:00 a.m. to 9:00 a.m. and from 5:00 p.m. to 7:00 p.m. On Friday and Saturday night, peak hours are typically from about 7:00 p.m. to whatever time the bars close.
Prime Time rates are a bit different, and they can vary depending on the day and occasion. Prime Time rates usually happen when there are big events in town.
With concerts, parades, conferences, and big sporting events going on, you’ll see more ride requests and get a chance to earn increased rates.
Prime Time rates can also occur when traffic is thick, and drivers are finding it hard to get around. During these times, Lyft charges customers 50% more than usual. So a ride that would typically cost $10 will cost $15 during Prime Time.
And while it may be frustrating driving at those times, it can certainly put some extra money in your pocket. To view Prime Time rates, use the Heat Map feature in the app.
You’ll see the Prime Time locations marked by a pink rectangle that shows the busiest parts of town.
Prime Time rates can happen anytime, anywhere. The best way to predict them is to stay up to date with the big events that are going on in your city or town.
If you can focus on driving in that area, you’ll have a better chance of catching some of the Prime Time rides.
Another thing to look out for is “Guaranteed Prime Time.” On occasion, Lyft messages drivers to let them know that they are expecting high demand at a certain time, such as rush hour.
So don’t delete those Lyft texts and emails without reading them – some of them can be quite useful!
3. Be smart about your insurance policy
An insured vehicle is a requirement when driving for Lyft, but insurance coverage costs can take a big bite out of your earnings. The less you spend on insurance, the better your profits will be.
Before you start driving for Lyft, decide if the insurance you currently carry is the best policy for you. In some cases, you might want to opt for a rideshare insurance plan through your current insurance provider.
What is a rideshare insurance plan? It’s explicitly designed to cover any damage that occurs while you’re on the job.
These plans can be expensive – many are priced between $3,000 and $5,000 a year.
Most rideshare drivers don’t want to pay that much, so most opt to go without rideshare insurance. However, if an accident occurs while you’re an Uber driver or Lyft driver, and you don’t have insurance, you’re going to run into trouble.
Your insurance company can drop you if they find out that you didn’t have the proper type of policy.
And getting cut from an insurance provider almost guarantees that your next policy with a new provider will cost even more. Think of driving for Lyft as having your own business.
You’ve got to take the proper precautions to protect yourself if something goes wrong. And while no one wants to pay expensive insurance rates, getting rideshare insurance can save you money in the long run.
To make sure you’re getting the lowest rate possible, call other providers to compare prices. Some providers, such as Metromile, offer a pay-per-mile insurance plan.
So rather than having one traditional monthly rate, your rate varies depending on how much you drive.
If most of the driving you do is for work, this can be very beneficial. Take the time to do some research and assess your driving habits.
Insurance rates do eat into your profits – so make sure you’ve got the plan that’s right for you.
4. Earn referral bonuses by enlisting friends
Every time you get someone to sign up as a Lyft driver, you earn money. Referral bonuses vary from driver to driver, but they’re a great way to put some extra cash in your pocket.
Here’s how it works: To qualify, you need to be in good standing with Lyft. Once your referred driver completes a certain number of rides, Lyft will send you your bonus.
With those sign-up bonuses, you can earn up to $2,000 per week. Start by getting a Lyft referral code from the app or the driver dashboard. Tell your friend that’s signing up to make sure they enter that code when they create their driver account.
This will make it easy to ensure you’re maximizing every opportunity when it comes to referral bonuses.
5. Maintain your vehicle (and have a backup on hand)
A safe, clean, and well-maintained car is essential. So don’t ignore oil changes or forget to fill your tires.
To keep your vehicle in tip-top shape, there are a few routine things you need to do. Change your oil at least every 3,000 miles. Inspect your brakes regularly. Keep battery connections clean and make sure your battery is charged.
Check and refill air pressure in your tires. Make sure transmission fluids, brake fluids, and coolants are at their ideal levels. Can’t keep track of all those things? Download an app like AUTOsist to remind you of essential maintenance tasks.
Don’t want to do the work yourself? Take your vehicle in for regular tune-ups and let your mechanic know that you drive for a living.
That’s the best way to ensure that you don’t get stranded on the road or end up without a car at all.
6. Drive for Lyft XL, Lux, Lux Black, or Lux Black XL
If you have access to a luxury vehicle, you can drive for one of Lyft’s premier services, which means more money for every ride and more cash in your pocket.
Not everyone is eligible, but if you have a vehicle that qualifies, take advantage of it. Riders that use premium Lyft services pay higher base fares, higher costs per mile, and higher costs per minute.
Prices vary from city to city, but the driver fees never change – Lyft always takes their 20% share of every ride. But how much more can you earn driving for a higher tier service?
In San Francisco, for example, the regular base fare is $2.20, and the cost of each mile is $1.33. Lux base fares are $5 with a price per mile of $2.81.
The highest tier, Lux Black XL, starts with a base fare of $15 and a cost per mile of $3.81. And that can make a big difference in how much you earn each week.
Want to know which cars qualify for which tier of service? Here is a detailed list of what makes and models qualify for which level.
7. Stock your car with goodies for riders
Tips are a great way to increase your earnings – and a great way to get tips is to have some items on hand that your passengers can enjoy.
Snacks, water, gum, mints. Offer these to your passengers, and you’re sure to see some better tips.
Don’t want to spend the money to stock those items? You don’t even have to. With companies like Cargo, you can earn money without having to pay for your inventory.
Cargo is a unique service that will send you free snacks and a box to keep them in. You place the Cargo box in your vehicle and choose to sell or give items away for free to your riders.
8. Keep your driver rating high
The best way to earn more money is to keep your customers happy with your service. Show up on time.
Know the fastest and most direct routes. And we shouldn’t even have to say this, but be polite. If you’re courteous and considerate, you’ll earn more tips.
Customers can tip through the app or tip in cash. Tips are not required, but if you provide a friendly, safe, quick, and pleasant service, you can increase your chances of earning more money per ride.
9. Don’t forget about taxes
Rideshare drivers are independent contractors that have to pay taxes on their own. And since no one is withholding taxes for you, at tax time, you’ll have to pay the IRS. Make sure you put aside 25% – 30% of every week’s earning.
That way, when taxes are due in April, you’ll already have the money set aside. Otherwise, you might have to come up with a lot of money quickly to meet the IRS deadline.
But as an independent contractor, there are a lot of things you can deduct to reduce your tax bill overall. You can claim job-related expenses such as gas mileage, vehicle repairs, snacks and bottles of water for passengers, and your phone bill.
Why is the phone bill deductible? Because you need it to access the app to do your job.
Anything that you need to pay for to do your job as a Lyft driver can be deducted as a business expense.
The IRS also requires independent contractors to make estimated tax payments throughout the year. Stay up to date on this – otherwise, you could end up with a hefty fee.
You also have to pay state taxes. So check with your particular state to see how you need to make your estimated payments.
By paying your taxes in advance, you can save money (and stress) in the long run.
10. Take a driver training course
Lyft has been around for a while, and there are lots of drivers who have figured out how to make good money and maximize profits.
If you want to learn how to earn more with Lyft, consider taking a driver training course.
Some experienced drivers offer rideshare training courses to educate new drivers on how to earn the most money possible. From how to hack Peak Hours to how to get more tips, these courses can give you some great insight.
Check out this free rideshare training course. You’ll find lots of advice, tips, and tricks on how to maximize your earnings.
Lyft drivers aren’t making as much money as they could be. But there are lots of ways you can increase your profits.
Drive in densely populated areas and cities. Take advantage of peak hours and prime times.
Earn referral bonuses, keep your vehicle well-maintained, and stock your car with snacks and water to get better tips.
If you have a luxury vehicle, drive for one of Lyft’s premier services. Make sure you have the right insurance.
Learn the local secrets, so you can navigate traffic, and take a driver’s training course if need be.
Drive smarter and utilize the app’s features and you’ll boost your bottom line in no time!
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