As the pandemic fades, ride-hailing giants Uber and Lyft are increasing driver pay in a desperate attempt to satisfy growing demand for their services.
Based on the Pandemic, There Are Less Drivers, Which Means More $$$
Lyft drivers in certain large cities, such as Denver and Philadelphia, earn $44 and $43 per hour, respectively, while Uber drivers in New York City and Philadelphia earn an average of $38 per hour — not including tips and expenditures, according to an Uber spokeswoman.
Sources say the wage increase is due in part to financial "incentives" that companies are adding to what drivers might otherwise make from a journey in an effort to persuade more gig-economy employees to get back on the road.
$250 Million Reserved for Uber Driver Bonuses
Higher prices, which Uber and Lyft charge based on supply-and-demand algorithms, may account for some of the increased income. However, Uber announced last month that it had put aside $250 million in driver bonuses. Lyft has also stated that it will be paying bonuses, but has not specified the amount.
Neither firm has stated how these bonuses or incentives help drivers earn more money.
Whatever the methodology, it now looks that Uber drivers can earn more than $1,000 and up to $2,000 extra per month if they make between 100 and 200 trips.
How Much Do Uber+Lyft Drivers Make Per Hour, Month & Year?
- Hourly Rates: $8.55 - $11.77
- Monthly Pay: A median of $155 per month and an average of $364 per month
- Full-time drivers earn an average of $36,525 per year
How Can You Make More Salary As a Rideshare Driver?
1. Surge Pricing
Surge pricing has been implemented by almost every ridesharing service. (Making a compelling case for customers to remember that yellow cabs are still available on wet Saturday nights...) It's a significant source of income. Drivers who make it a point to work during peak hours are likely to earn significantly more than their peers.
2. Geographical location
Drivers in cities earn far more than their counterparts in rural and suburban areas. This is partly due to urban inflation; doing business in Brooklyn is more expensive than in Cohoes. Uber drivers in New York City charge an average of $29.34 a trip, while in Chicago they charge $10.99 and in Phoenix they charge $14.36. Drivers in New York City can celebrate. The city recently enacted legislation that establishes a minimum salary for rideshare drivers.
But it's also about client density and "underutilization," as economists put it. A technical term for time spent driving with the automobile empty.
A driver in Boston can frequently drop off one passenger and pick up another within a few blocks. She might be able to cut her inter-fare time in half. In the suburbs, a single driver may go for miles between fares, all of which were paid without using the meter. Her underutilization increases dramatically, but her earnings decrease.
3. Working Hours
Given the freelance flexibility of this profession, calculating monthly or annual earnings for a rideshare worker is nearly impossible. Drivers' hours might differ from one person to the next, day to day, and week to week.
Obviously, someone who decides to drive 60 hours per week will earn more than someone who only picks up a few fares after work.
Both Uber and Lyft adopted tipping in 2017 to help with recruitment. While this is beneficial to drivers since it increases prospective money, it also adds another variable to the income roulette. (It also widens the heinous habit of businesses outsourcing their payroll to strangers' kindness, but that's a topic for another story.) No firm statistics regarding tipping is released by any company.
What we do know is that remuneration is low across the board in the rideshare industry. Those wages are also falling, but first...
Expenses are another important issue in rideshare earnings.
The thing about the "gig economy" is this: It exists for a single purpose: to offload costs. Despite Thomas Friedman's dumb hagiographic writings and all the chirpy talk of side hustles, Uber and Airbnb's business models are based on you paying for the taxi and hotel room that they rent.
Uber does not recruit its drivers for the same reason that 20% of businesses now refer to their workers as "freelancers." They're inexpensive. Health insurance, retirement, equipment, and expenditures are all paid for by freelancers. In what is known as a hold harmless clause, most businesses prefer to outsource their legal liabilities and fees to freelancers. Because of a mix of technology and the Department of Labor's virtual collapse in enforcement, this has become commonplace.
Ridesharing's competitive edge over taxi services is based on freelancing. Uber does not have to buy, operate, or keep an enormously expensive fleet, like a yellow taxi firm does. The drivers are the ones who do it. When calculating a driver's actual (net) income, it's important to factor in expenses like: