Wednesday, 20 January 2021

A battle of ride-hailing services: Lyft vs. Uber

A battle of ride-hailing services: Lyft vs. Uber
04 May

Over the last few years, ride-hailing apps have come and made getting a cab easier than we all thought it could get. But that’s not all; as they gained momentum, job opportunities were created not just for the nerds at Silicon Valley.

The most popular ride-hailing apps at the moment are Uber and Lyft. As someone looking for ways to make some extra passive income or a full-time job driving with any of these apps, it is entirely reasonable to get muddled on which app is better than the other.

I mean, they both offer one an opportunity to have flexy working hours. If it is the freedom of a self-employed individual you are after, then both Lyft and Uber provide that much. Both companies have been around for a while; although Uber is the oldest in the market with more presence in most states than Lyft. However, they both perform well in the market.

To help you make up your mind on the debate of driving for Lyft vs. Uber, we have compiled an in-depth analysis of both apps- from their pricing to vehicle requirements and so much more.

Read more on how to make money with Uber.

Here is what you need to know:

1. Driving for Lyft Vs. Uber- Pricing

As you can imagine, both companies happen to be a bit competitive when it comes to pricing. However, the rates for Uber and Lyft are more or less the same. The difference in prices will vary from one city to the other.

From Ridester’s Pricing Tool, one can see that Uber and Lyft charge around $1.00 when starting a ride and $1.50 for every mile. Per minute, they both charge about $0.25. Compared to a regular taxi, the rates are much friendlier and more cost-effective.

During peak hours, both Lyft and Uber use price surging methods to increase their prices. For Uber, it is referred to as a Surge. This is a rate multiplier that changes based on location but is roughly 1.3x or even 2.1x to the base, distance and time fare.

Lyft refers to it as Prime Time. Unlike Uber’s surge strategy, Lyft’s prime time charges some extra fee during peak hours, which is in the form of a percentage. The additional fee is added to the amount of the base ride. For example, if at one peak moment their percentage is 50% and a regular ride costs $8, then during prime time, the total fare will increase to $12.

The difference with these surge forms on both companies is that Lyft’s prices increase by around 2x whereas Uber increases their prices 7 or 8x. That means that many riders will prefer Lyft to Uber during such times. For a driver, that means you will make more during peak hours with Lyft than with Uber.

While we are still on pricing, Uber is widely known for its massive sign up bonuses. Their commission of 25% is also much higher than what Lyft charges (20% – 25%). However, Lyft does have other rush hour opportunities like Power Zones for their drivers to earn more. Lyft caps the Power Zone rides per ride at a rate of $195.

That said, when it comes to pricing, Lyft is your go-to ride-hailing app during peak hours. On regular hours, both companies charge almost the same.

2. Driving for Lyft vs. Uber- Driver’s Earnings

As discussed earlier, the pricing for both Lyft and Uber are more or less the same, especially during normal hours. However, once you have factored in the high commission fee that Uber takes from its partner-drivers, then it could result in Lyft drivers taking home more money than Uber drivers.

According to a study done by Earnest, Lyft drivers take home an average of $377 per month compared to Uber’s $364. The median monthly income for Lyft drivers is $210 whereas Uber drivers take home $155.

While the earnings are low, one can benefit from the extra bucks when they work on a part-time basis. On a full-time basis as a driver, one stands a better chance of making more money by signing up with both apps.

3. Customer support

The more support you get as a driver, the better the experiences you and your passengers will have on the road and in using the app. So, when signing up with either Lyft or Uber, one needs to be keen about their customer support systems.

Drivers for both companies get in touch with customer service through:

  • In-app support
  • Emails
  • Through the critical response lines
  • Through their website

While the customer support from both companies has declined as they grow, Lyft seems to have the upper hand when it comes to their customer support. Lyft’s support system is likely to dig deeper into the matter whereas Uber’s support system offers canned responses to issues.

4. App experience

The app experiences matter a lot when it comes to any of these ride-hailing companies. The easier it is for you as a driver to use the app the better and quicker you can operate your business.

The most common thing about both apps is that they connect riders to drivers. All a rider has to do is input their current location and destination. The apps will connect them to a driver within their vicinity.

Driver’s are also able to rate their riders. Both apps have a rating system that works both ways. Once the ride is over, both the passenger and the driver can rate each other’s experiences of the trip. The rating system is excellent in that it helps weed out drivers and riders with low ratings.

Uber’s platform has become less friendly compared to Lyft’s due to recent upgrades as well as cross-promotions to other services they offer like the UberEats. But that is not to say Uber’s app is completely slow and unreliable.

As a driver, if you have both apps, you can use Lyft when Uber’s app is busy and less friendly and vice versa. This minimizes your chances of losing on business when either of the apps is down.

5. Coverage

Driving for Lyft vs. Uber will also depend on the availability of either of these in your city. Uber has broader coverage and a more significant market share than Lyft. With a presence in around 58 countries and over 300 cities around the world, with 267 cities being in the United States, it is not hard to see why.

Lyft, on the other hand, has its presence in 51 states in the United States. Outside of the US., it is only available in Canada.

The services are available 24/7. However, small states might not have the service available throughout the night, and if possible, one might have to wait for a while before getting a customer.

Also, in such small states, demand is not as high as it is in the bigger states. Some of these small states only get to have high demands during the holidays on when there are festivals in the towns.

Anyone hoping to sign up to drive with either Uber or Lyft and is outside of the United States and Canada has a better chance of signing up with Uber. You can see cities in the U.S where Lyft and Uber are available by clicking on these links.

6. Driving for Lyft vs. Uber- Vehicle requirements

Of course, there are vehicle requirements when signing up with either Lyft and Uber, and cleanliness is not the only one.

Uber’s model, since they entered the market, is to cater to business people and professionals. That means that riders get a wide variety of vehicles to choose from.

For a driver, it means you get to choose a driver’s category that fits within your car model. With their wider variety, there are higher chances of you signing up on either of their categories. Lyft also requires drivers to have newer car models compared to Uber.

The available categories on Uber for drivers are:

  • UberPool- Where riders share rides. It is also the cheapest.
  • UberX- This is an everyday car that can fit up to four people.
  • UberXL- This is an SUV that fits up to six people.
  • UberSELECT- This is a luxury sedan car that fits up to four people.
  • UberBLACK- this is the original Uber car service that features high-end black luxury vehicles. It fits up to four people.
  • UberSUV- This is a high-end SUV that fits up to six people. It is also the most expensive service o Uber.

Lyft has fewer options, which are:

  • Lyft Line- This is their cheapest option, and it’s all about sharing rides.
  • Lyft original- This is an everyday car that fits four people.
  • Lyft Plus- This is an everyday car that fits six people.
  • Lyft Premier- This is a better-class vehicle that fits four people.
  • Lyft Lux SUV and Lyft Lux- This offers premium services with high-end vehicles like a town car, a limousine, or high-end SUV’s. The vehicles in this category carry up to six people.

Driver’s are also subjected to background checks on both companies. The difference between the two is that Lyft does an in-person meeting with a representative from Lyft. During the meeting, your car will be inspected to ensure it meets their age and safety requirements. Uber, on the other hand, does not do an in-person meeting.

Other requirements vary from one city to the other, but you can find the requirements for Uber and Lyft here.

7. Driving for Uber vs. Lyft- Innovation

Both Lyft and Uber and very competitive, and in today’s market, one needs to be innovative enough to be one step ahead of competitors.

For driver’s, Uber seems to take the upper hand when it comes to innovation and new services. If you do not want to drive people with Uber, then you can be an UberEats driver.

Also, if you have already partnered with Uber as a driver, you can still opt for the UberEats delivery by just navigating through your app and signing up as a delivery person. On the other hand, Lyft only has the option of driving people from one point to the other.

While on innovation, both companies have ensured that there is a reliable rating system for drivers and riders. Additionally, there is a built-in tipping feature in both where riders can tip drivers through. Initially, only Lyft had this feature, but Uber has finally caught up and introduced it.

8. On brand image

Currently, businesses are working twice as hard to protect their brand image. Once negative PR has hit the headlines on successive occasions, companies start losing their market share and sales. In this story, Uber seems to be on the receiving end of most of the negative PR.

Most headlines on ride-hailing scandals have hit Uber more than Lyft- from lawsuits to harassment claims and countless scandals from their drivers- not just in the US. What this has caused is deactivation of the app from many riders. These riders eventually end up with Lyft, which translates to more business opportunities for Lyft drivers.

This, however, should not make you as a driver deactivate your account and rely only on Lyft to get your daily bread. A big company like Uber will hardly go down without a fight. So, to lure back these ex-passengers, Uber will likely have marketing campaigns with incentives. When these customers come back, you need to be around and ready to cash in on it.

9. On perks

Both Lyft and Uber offer other perks to their drivers, but Uber has more perks compared to Lyft. Uber, for example, has special discounts for their drivers with companies that they have partnered with. These perks allow drivers to cut their costs and keep more of their revenues, e.g. saving on your phone bill and health insurance. The perks also vary from one city to the others.

Another perk that Uber offers its driver-partners is the professional enrichment perk. With this, you can take online business courses and learn a foreign language as well. You can learn more on Uber perks here.

Lyft too does have perks for their drivers. With their accelerate rewards program, one can get into a particular tier and saves on fuel and discounts on roadside assistance. The tiers are Gold, Silver, and Platinum. Learn more about perks from Lyft here.

10. Work-life balance

Driving with either Uber or Lyft, especially on a full-time basis means that you are your own boss. The hours are flexible, yes, but you need to keep your physical and mental health in check. You get to decide when in the best time for you to relax and when you should get back behind the wheel. At the end of the day, your bank account and health should be in check at all times.

11. Your character

To survive as a driver for both Uber and Lyft, you need to be a people’s person. It does not matter that Uber drivers are more serious, concise and professional than Lyft drivers who are more friendlier and open to conversations.

As a driver, your passenger needs to feel safe inside your car and with you. If you come off as a rude and an angry driver, it will reflect on your rating, and it will not be good.

That said, both Uber and Lyft will offer you an opportunity to earn a living whether on a part-time or full-time basis. They have their differences, especially on pricing, earning, innovations and perks.

Lyft drivers make more than Uber drivers, but Uber has a larger market share and more presence in the US and all over the world compared to Lyft.

With both, one has to be prepared for the rigorous working conditions, i.e. some long hours behind the wheel. Also, you should be well prepared as a drive to manage your works hours and ensure you keep your mental and physical health in check.

In the end, it all boils down to what you want as an individual as well as what you are looking for in such a job environment. It also does no harm is having both apps.


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