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How much does a Lyft driver earn?

brent-noorda.blogspot.com

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Re: How much does a Lyft driver earn?

#21

Post by conductr »

FaceKicker wrote: post #5
jdmichal wrote: post #4

Earlier quoted context omitted.

But it's not like his car payment magically disappears when he becomes a Lyft driver. Or magically stop having to carry insurance. It's a good estimate to use for cost, especially considering the author did not even own a car and would have to purchase one.

> But it's not like his car payment magically disappears when he becomes a Lyft driver. Or magically stop having to carry insurance. Right, my point is that those costs are essentially fixed w.r.t miles driven, not that you wouldn't need those things. If you drive 36000 miles a year as a Lyft driver your car payment is still the same as someone who drives 12000 miles a year, whereas the author's model assumes the pay…

Drive 36k miles a year and the car will quickly have a resell value of 0 and repair costs become more frequent. Insurance is probably the only true fixed cost that benefits from scale

Re: How much does a Lyft driver earn?

#22

Post by twistedpair »

brent_noorda wrote: post #20
KaoruAoiShiho wrote: post #8

@Brent Noorda, awesome! You've identified a market opportunity to provider a more consumer friendly and driver friendly alternative! Give back to the community! All you need is some servers and lattes.

Given what the drivers and passengers put into it, it does seem that Lyft's 20% cut seems high - but that 20% is also what justifies backing from the investors. If so, then there's room for a service doing the same brokerage deal for, maybe 10% or 5% (if they cut out the lattes), advertising itself as "cheaper than cabs, AND cheaper than Lyft". Maybe Craig will offer a really crappy UI and do it for free?

Sounds like a good ole fashioned race to the bottom.

Re: How much does a Lyft driver earn?

#23

Post by FaceKicker »

conductr wrote: post #21
FaceKicker wrote: post #5

Earlier quoted context omitted.

> But it's not like his car payment magically disappears when he becomes a Lyft driver. Or magically stop having to carry insurance. Right, my point is that those costs are essentially fixed w.r.t miles driven, not that you wouldn't need those things. If you drive 36000 miles a year as a Lyft driver your car payment is still the same as someone who drives 12000 miles a year, whereas the author's model assumes the pay…

Drive 36k miles a year and the car will quickly have a resell value of 0 and repair costs become more frequent. Insurance is probably the only true fixed cost that benefits from scale

I agree that repair costs and depreciation grow (probably roughly linearly) with miles driven, but those would have been factored into the $9100 median separately from the car payment.

Re: How much does a Lyft driver earn?

#24

Post by Tossrock »

yid wrote: post #3

> I’m just guessing that I’ll average a speed of 30 miles/hour while I’m doing my Lyft job. So my expenses will come to about $22.80 per hour. You're implying that you will driving 30 miles each hour, on average. That is a ridiculous overestimation for the type of urban driving Lyft will involve. I'd guess closer to 15-20 in off-peak periods, and perhaps something close to 10 miles on average. That brings maintenance…

Uber tells you your average speed for your trip, and mine have all been between 10 and 15 miles per hour.

Re: How much does a Lyft driver earn?

#25

Post by teh_klev »

fleitz wrote: post #17
yid wrote: post #3

> I’m just guessing that I’ll average a speed of 30 miles/hour while I’m doing my Lyft job. So my expenses will come to about $22.80 per hour. You're implying that you will driving 30 miles each hour, on average. That is a ridiculous overestimation for the type of urban driving Lyft will involve. I'd guess closer to 15-20 in off-peak periods, and perhaps something close to 10 miles on average. That brings maintenance…

Urban driving incurs a higher cost per mile driven, and unless you're driving a hybrid increases fuel costs.

And not to mention increased wear and tear on brakes, gearbox and engine due to much more start-stop events during urban journeys especially at peak times i.e. traffic lights, junctions, tailbacks etc.

On top of that, the car will be starting and stopping i.e. engine start/stop cycles far more during urban workload if you're a taxi driver, that also increases the number of times your car will be visiting the shop for maintenance as the life of the car increases.

Cars with high long distance journey motorway miles will last far longer than a car working out its life in a city. This can affect resell value if you own the car rather than lease.

As a fairly experienced second hand car owner/purchaser I'd far rather buy a motor with 100k+ motorway miles than 50k city life on the clock.

Re: How much does a Lyft driver earn?

#26

Post by kevingibbon »

I think your missing the point. You are calculating this on the basis that you were buying and using your car exclusively for Lyft. If a driver is already paying for a vehicle, all of these expenses can be shared with personal use. This is the 'sharing economy'.

To buy a car and use it exclusively for Lyft may not make sense.

Re: How much does a Lyft driver earn?

#28

Post by bigiain »

conductr wrote: post #21
FaceKicker wrote: post #5

Earlier quoted context omitted.

> But it's not like his car payment magically disappears when he becomes a Lyft driver. Or magically stop having to carry insurance. Right, my point is that those costs are essentially fixed w.r.t miles driven, not that you wouldn't need those things. If you drive 36000 miles a year as a Lyft driver your car payment is still the same as someone who drives 12000 miles a year, whereas the author's model assumes the pay…

Drive 36k miles a year and the car will quickly have a resell value of 0 and repair costs become more frequent. Insurance is probably the only true fixed cost that benefits from scale

If you were going to approach this in a purely economic-rationalist manner, you'd (probably) discover that buying cars new is wasteful - and that you want to look for late-model full-service-history low-mileage second hand cars in the 2 or 3 year old range. The original owner will have borne the brunt of the capital depreciation, and you can drive higher-than-average-yearly-mileage for a few years while "low mileage" to "slightly high mileage".

(Where I come from, Australia, there are tax breaks that make 3 year old cars fresh off company-car leases pretty commonly available - many people structure their salary package in a way the strongly encourages them to lease a new car every 3 years, and off-load the previous one for often 35% of its original purchase price - and to have those cars get all their required dealer servicing done using pre-tax salary.)

Re: How much does a Lyft driver earn?

#29

Post by abalone »

Oh give me a break. He's basing his entire analysis on the assumption that it costs $22.80/hr to operate a vehicle. They way he comes up with that is by including the up-front cost of the vehicle.

That's not quite the right logic. Most people do not go out and purchase a vehicle just to become a Lyft drivers. Certainly that's not what you should do.

A better economic analysis is to look at Lyft as a way to make your existing personal car a more productive asset. The car is a sunk cost. What you should analyze is the incremental costs of fuel and wear-and-tear for the additional miles driven vs. the Lyft proceeds.

Econ geek footnote: This is assuming there is little-to-no opportunity cost for being a Lyft driver. But for the unemployed that holds true. Lyft may be a more compelling option for unemployed/underemployed car owners.

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