Lyft driver payment
How do Lyft drivers get paid?
Lyft drivers, like all rideshare drivers, are often curious about how their earnings are calculated.
Understanding the way Lyft tabulates its driver’s earnings can help prospective drivers determine which Lyft service is best for them (and can have an impact on the vehicle they choose to purchase or lease, as well). Knowing how one’s earnings are calculated also makes it much easier to create a budget and forecast potential earnings. Educating oneself about pay structure can also help drivers keep track of daily earnings and identify any glitches in payments, should they arise.
How is Drivers’ Pay Calculated?
A Lyft driver’s payments are calculated in a fairly straightforward manner. Essentially, the Ride Fare amount is calculated with a Base Fare, Cost Per Minute, and Cost Per Mile, with the potential for an increased fare during Prime Time. Lyft takes a 20-25% commission.
To break it down:
- Ride Fare is: Base Fare + Cost Per Minute + Cost Per Mile + Prime Time (if applicable)
- Driver’s Pay = Ride Fare – Lyft’s Commission
What is the Base Fare?
Lyft’s Base Fare is the cost charged to a passenger when they begin a ride.
What is the Cost Per Minute?
The cost per minute is the amount charged to a passenger based on where the ride begins (this amount varies by region). To initiate this Cost Per Minute, the driver must hit ‘Tap to Arrive’. This ensures that once a driver has arrived at the pick-up destination they are paid for any time spent waiting for their passenger arrive & enter into their vehicle.
What is the Cost Per Mile?
The Cost Per Mile is a set amount that is charged to passengers for the overall distance driven (this amount also varies, based on the region).
What is the Minimum Fare?
The Minimum Fare is a set fee that will be charged to a passenger in the event that the ride is very short. Lyft does not take a service fee from a Minimum Fare ride (unlike other rideshare companies, such as Uber). So – if a Minimum Fare is $5 – Lyft will not deduct a service fee from that overall amount (by comparison, some competitors can take more than $1.50 from a $5.00 fare).
What is Lyft Prime Time?
Lyft Prime Time occurs when there are more ride requests than drivers available. In this situation, passengers are charged an additional percentage on their overall Ride Fare (subtotals are calculated before service fees; or other additional fees, such as airport fees). This percentage can vary drastically from one minute to the next, and is based entirely on passenger demand. For instance, Prime Time might cause a 10% fare increase one minute, and a 20% increase the next. Passengers are informed of the Prime Time fee when booking a ride.
Drivers can earn additional income if they choose to work during Prime Time hours. Heat Maps (built-in to the Lyft Driver App) are an excellent tool to use, showing drivers high-demand areas in real-time. Because Prime Time is calculated from the point of ride request (not drop off), Prime Time rates may not apply if a driver takes a request from outside a Prime Time area.
Lyft Commission Structure
Lyft charges a commission on the Ride Fare. This commission can vary from 20% to 25%. Drivers that applied before 12:00am on January 1st, 2016 pay 20% commission (while those who applied after pay a 25% commission).
Drivers do not need to be concerned about paying fees such as airport fees or tolls. These are always charged directly to passengers (and are not reflected in a driver’s pay summary).
How to Set Up Your Account to Get Paid
Once a driver has been approved for Lyft, they must set up their Dashboard in the Lyft platform.
A new driver should sign into their dashboard (either with their phone number, or using a Facebook account), click Payouts, and then click Bank Info, and enter the requested banking information. This information includes a driver’s personal bank account number and their routing number. This information can be obtained from a personal check or from a driver’s bank itself.
Ride earnings are calculated from Monday at 5am to the following Monday at 4:59am. Transfers begin processing on Tuesday and payments are usually received by the end of the week.
Drivers who need their money faster can choose to request Express Pay, which carries a fee of $0.50 and can only be requested once a driver’s pay has reached $50 (after Lyft’s fee deduction). Express Pay transfers can take anywhere from a few hours to a few days to appear in a driver’s bank account.