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"On average, Lyft drivers earn over $20 per hour." I wonder if this figure takes into account all the waiting time, or just driving time on the app. If it is t

"On average, Lyft drivers earn over $20 per hour." I wonder if this figure takes into account all the waiting time, or just driving time on the app. If it is the latter, then that's a pretty scummy thing to say, considering that most drivers spend less than a third of the time actually driving people to their destination, putting the actual number closer to 7.00 an hour.

lexs 7y ago
Also does that include repairs, depreciation, insurance etc. of the car? What about fuel?
- metalliqaz 7y ago
  It does not.
  - lr 7y ago
    Not to mention that, as a contractor, they have to pay SS and Medicare payroll taxes, which total an additional 7.65%. So, that $20/hour, given the overall expenses, is probably not even equivalent to the new NYC minimum wage of $15/hour.
    - fucking_tragedy 7y ago
      FICA tax rate for self-employed under $128k/yr is 15.3%. Effective tax rates for self-employed workers can reach close to 50%.
      - mattkrause 7y ago
        50% total, or 50% marginal? There’s a world of difference between the two....
        papln 7y ago
        In a state/city with high income tax, you'll pay 13.5% social insurance tax, up to 10% state/local tax, and 10-25% Fed income tax, but you'll only hit the high end of those rates in total tax when you gross upwards of $300K/yr.
        robmaister 7y ago
        One year I made around minimum wage (paying myself just barely enough to live during the early stage of a startup) and paid I think around 25% effective just for federal. I now make a lot more than that with a W2 job as my primary source of income and my effective federal tax rate was about half of what it was that year. IMO FICA cap should be raised significantly and the rate should be reduced. There are entry-level FAANG employees who aren't paying their full salary into it. But that's an entirely different topic.
        true_religion 7y ago
        That’s because with a W2 job, the employer pays taxes on the behalf of the employee. When you are self employed then you pay both sides. It’s pretty fair.
        robmaister 7y ago
        You still get to deduct half of your SE tax from your ordinary income, which is fairly generous from the IRS's perspective. From the perspective of someone like me, my W2 job already puts me in the 24% bracket this year. If you use a platform to freelance, they'll take their 5-20% cut, you'll owe FICA at ~15%, ordinary at 24% (a little less because W4 withholding tends to overestimate), and state taxes at 5-10%. It's fair because those are what the rates are and I know what I'm getting into, they just appear higher at first glance. It's also easy for me as a software engineer to set my own rate to account for the extra taxes I'm responsible for. In fact, my rate is significantly higher on the one particular platform where I'll only see ~$150 of the first $500 billed to a new client after everyone takes their cut (on which the client also pays ~$10 in transaction fees to the platform). It's nowhere near as easy for a Uber/Lyft driver to do so since their rate is set for them by some algorithm that tries to balance supply and demand. These companies went out of their way to classify drivers as contractors, but still want to present an interface to the riders that tells them that they're taking an Uber and not that they used Uber to find an independent driver. IMO they can't have it both ways. Drivers should be able to set their own rates and riders should be presented with a list of drivers and rates to pick from. Uber still gets to take their cut and they can still set up surge pricing as a % of the driver's rate. There can still be an option to pick the cheapest driver for those who don't care. This would better reflect what these companies are trying to legally classify themselves as.
      - smileysteve 7y ago
        I think they meant this comparatively, as opposed to absolutely.
- Dirlewanger 7y ago
  It doesn't. After expenses/taxes deducted, they're making less than minimum wage. To me this just shows how much financially illiterate many Americans are; zero foresight beyond the amount in their bank account at any given moment.
  - asdff 7y ago
    One of my lyft drivers had their car in the shop for 6 months (some dispute with the kia dealership, they assured me that their lemon lawyer would recover the car soon) and the car they were driving for lyft was a rental from enterprise. Desperate people are taking these gig jobs and it's scary how far in over their head some of them are.
- rco8786 7y ago
  It does not, and it should not.
deleted 7y ago
[deleted]
kubatyszko 7y ago
I've had rides that cost me $15 and took 45 minutes, the math does not add up at all. In fact, I commute with Lyft nearly every day and my average 40 minute ride costs somewhere around $20. Even with another ride directly like mine it's unlikely there's enough earnings within an hour to cover Lyft's fees and pay the driver $20...
- icebraining 7y ago
  Uber and Lyft are both losing money for a reason, though.
- rco8786 7y ago
  Why not? Figure the driver takes 10 min to pick up another passenger. That’s another 10 min worth of driving and we’ll just say it all goes to Lyft. Driver makes $20, Lyft makes $5, 10 minutes are “wasted”.
rjf72 7y ago
The hourly rated is based on the time that the app is active. So that hourly rated would include wasted time waiting for customer, driving to pick them up, etc.
deleted 7y ago
[deleted]
duxup 7y ago
I feel like that's like the truck driver like stories where they'd talk about driver shortages and trouble finding new drivers and then quote average pay that is for someone with 10 or 15 years experience and pay you only get at the top shippers or working direct for a big company.

lexs 7y ago

Also does that include repairs, depreciation, insurance etc. of the car? What about fuel?

metalliqaz 7y ago
It does not.
- lr 7y ago
  Not to mention that, as a contractor, they have to pay SS and Medicare payroll taxes, which total an additional 7.65%. So, that $20/hour, given the overall expenses, is probably not even equivalent to the new NYC minimum wage of $15/hour.
  - fucking_tragedy 7y ago
    FICA tax rate for self-employed under $128k/yr is 15.3%. Effective tax rates for self-employed workers can reach close to 50%.
    - mattkrause 7y ago
      50% total, or 50% marginal? There’s a world of difference between the two....
      - papln 7y ago
        In a state/city with high income tax, you'll pay 13.5% social insurance tax, up to 10% state/local tax, and 10-25% Fed income tax, but you'll only hit the high end of those rates in total tax when you gross upwards of $300K/yr.
      - robmaister 7y ago
        One year I made around minimum wage (paying myself just barely enough to live during the early stage of a startup) and paid I think around 25% effective just for federal. I now make a lot more than that with a W2 job as my primary source of income and my effective federal tax rate was about half of what it was that year. IMO FICA cap should be raised significantly and the rate should be reduced. There are entry-level FAANG employees who aren't paying their full salary into it. But that's an entirely different topic.
        true_religion 7y ago
        That’s because with a W2 job, the employer pays taxes on the behalf of the employee. When you are self employed then you pay both sides. It’s pretty fair.
        robmaister 7y ago
        You still get to deduct half of your SE tax from your ordinary income, which is fairly generous from the IRS's perspective. From the perspective of someone like me, my W2 job already puts me in the 24% bracket this year. If you use a platform to freelance, they'll take their 5-20% cut, you'll owe FICA at ~15%, ordinary at 24% (a little less because W4 withholding tends to overestimate), and state taxes at 5-10%. It's fair because those are what the rates are and I know what I'm getting into, they just appear higher at first glance. It's also easy for me as a software engineer to set my own rate to account for the extra taxes I'm responsible for. In fact, my rate is significantly higher on the one particular platform where I'll only see ~$150 of the first $500 billed to a new client after everyone takes their cut (on which the client also pays ~$10 in transaction fees to the platform). It's nowhere near as easy for a Uber/Lyft driver to do so since their rate is set for them by some algorithm that tries to balance supply and demand. These companies went out of their way to classify drivers as contractors, but still want to present an interface to the riders that tells them that they're taking an Uber and not that they used Uber to find an independent driver. IMO they can't have it both ways. Drivers should be able to set their own rates and riders should be presented with a list of drivers and rates to pick from. Uber still gets to take their cut and they can still set up surge pricing as a % of the driver's rate. There can still be an option to pick the cheapest driver for those who don't care. This would better reflect what these companies are trying to legally classify themselves as.
    - smileysteve 7y ago
      I think they meant this comparatively, as opposed to absolutely.
Dirlewanger 7y ago
It doesn't. After expenses/taxes deducted, they're making less than minimum wage. To me this just shows how much financially illiterate many Americans are; zero foresight beyond the amount in their bank account at any given moment.
- asdff 7y ago
  One of my lyft drivers had their car in the shop for 6 months (some dispute with the kia dealership, they assured me that their lemon lawyer would recover the car soon) and the car they were driving for lyft was a rental from enterprise. Desperate people are taking these gig jobs and it's scary how far in over their head some of them are.
rco8786 7y ago
It does not, and it should not.

deleted 7y ago

[deleted]

kubatyszko 7y ago

I've had rides that cost me $15 and took 45 minutes, the math does not add up at all. In fact, I commute with Lyft nearly every day and my average 40 minute ride costs somewhere around $20. Even with another ride directly like mine it's unlikely there's enough earnings within an hour to cover Lyft's fees and pay the driver $20...

icebraining 7y ago
Uber and Lyft are both losing money for a reason, though.
rco8786 7y ago
Why not? Figure the driver takes 10 min to pick up another passenger. That’s another 10 min worth of driving and we’ll just say it all goes to Lyft. Driver makes $20, Lyft makes $5, 10 minutes are “wasted”.

rjf72 7y ago

The hourly rated is based on the time that the app is active. So that hourly rated would include wasted time waiting for customer, driving to pick them up, etc.

deleted 7y ago

[deleted]

duxup 7y ago

I feel like that's like the truck driver like stories where they'd talk about driver shortages and trouble finding new drivers and then quote average pay that is for someone with 10 or 15 years experience and pay you only get at the top shippers or working direct for a big company.