One of the lowest hanging fruits for a side-hustle idea is driving for Lyft or Uber. In this post, I’ll show you whether or not driving for Lyft is worth it and my exact numbers of what I earned when I tested out this side hustle.

Joining Lyft was easy: you sign up, they make sure your car won’t explode and get a verbal confirmation from you that you won’t murder all of your passengers, and you’re good to go. Easy peasy to become a driver.

But is it easy peasy to make bank being a cab driver?

Let’s find out by looking at my results when I drove for Lyft back in 2015. At this point in time, I wanted a side-hustle where I could make maybe an extra 20-50k/yr so that I can more easily buy and accumulate out-of-state single family rentals.

In the below, we’ll find out why exactly I only drove Lyft for a week.

Is Driving For Lyft Worth It? (My Results)

Apparently, my very first week of doing my ridesharing side hustle sucked. To be fair though, I only spent 37 minutes driving and made around $17.03.

But back in the day, I was very determined to get my hands on underperforming assets like single family rentals, so I decided I would go HAM and drive even during Thanksgiving.

Here are the hours I worked on November 23, 24, and 27:

Totalling around 14 hours and 5 minutes of driving for that week. Added with the first week, I totalled 14 hours and 42 minutes of driving before I gave up.

Almost 2 full work days. Such a champ, right?

But anyway, let’s take a look at my numbers and see if we can extrapolate it to something meaningful and conclusive instead of just passing judgment on a younger me.

Because they changed how the e-mail reported the income in between Nov 23 and Nov 24, I dug up my old Lyft driver’s account and found that in the 2^nd week of driving I earned $134.28, which mean in total I earned $151.31.

Look at the fees though. Obnoxious.

Wall street crooks take 1% as an AUM fee. Lyft? 20%. No wonder they got sued.

The lack of tips, the brutal hours (sitting for a long time is extremely detrimental to your health), safety issues, and the enormous fees making driving for Lyft definitely not worth it.

Analysis, And Why It Didn’t Work

Driving for 14 hours and 42 minutes and earning $151.31 would mean that I am earning $10.29/hr. Gross revenue. But that’s not enough to know whether or not driving for Lyft is worth it.

As with any business, we have to subtract the expenses to estimate our net profits.

Of those 14 hours and 42 minutes, I drove for a total of 82.15 miles.

I get around 22 MPG on my 2013 Honda CRV and is thus 3.73 gallons of gas. According to eia.gov, average price per gallon back then was 2.158, so I spent $8.04 on gas (in reality it’s probably $1/gallon more because I drove in California). Likewise, I am assuming a lifetime mileage of 200K miles on this $25000 (out-of-door) car, which means depreciation is around 82.15/200,000*25000 = $10.2.

So in reality, I earned $151.31 – $10.2 – $8.04 = $133.07 net, or $9.05/hr.

According to dir.ca.gov, the minimum wage at that time was $9/hr, which means I made more than min wage! Yay! Except I was only 2 months from the cutoff from not making minimum wage since January 1, 2016 saw a $10/hr min wage:

You could maybe argue that I did in fact earn $10.29/hr instead since I could just deduct my gas and my car’s depreciation as business expenses at the end of the year. But you’d only get that money back at the end of the year, so 10% of your gross income is gone, which lowers your return on your time invested (i.e. money now is worth more than money later).

But even if operating the car was free, $10.29 vs $9.05 really makes no difference. For a $40,000 down payment, I’d need to drive 3887 hours / 4419 hours respectively to buy one underperforming asset AKA an out-of-state single family rental.

At the $9.05/hr, I’d need to drive 110 work weeks for one extra crappy rental (2 years) and 2 decades to pump out 10 extra rentals. I’m a millennial and I’m not going to spend 2 decades of my life driving so I can get a life of managing tenants, toilets, and termites.

This was completely unfeasible for me and it just seemed like I could have just used my engineering job’s income and put money in high-dividend stocks to yield a lot more money for a lot less work.

Also, if I were going to do something that’s minimum-wage (or close to it) then why not just take a minimum-wage job where the risk is much smaller? There’s no chance of a car-jacking or car accidents working inside a McDonald’s or bagging groceries, for example.

In sum: making minimum-wage makes driving for Lyft not worth it. There are easier minimum wage jobs out there than cabbing all day.

Just The Tip?

One touted benefit is that Lyft drivers get tipped (back then, there was no option to tip Uber drivers), and that might be a great way to vastly improve upon the minimum wage income that you’d get.

But with the screenshot above, you might notice that most people don’t actually tip.

Of $198 gross earnings, there’s only a total of $13 tips. That’s 6.5%!

This might have to do with the specific demographic that was in my area, but if you want to get rich you shouldn’t have your income be dependent on the goodwill of others. This is because goodwill is extremely volatile, which means your income would be extremely volatile. And it’s hard to build wealth with a volatile foundation.

Bottom Line: Driving For Lyft / Uber Not Worth It

So can you make money driving for Lyft / Uber? Yes.

And can you make more than minimum wage driving for Lyft / Uber? I think this is doable. I was pretty new at being a cab driver so my earnings might not have been maxed out. For example, there was a fair amount of time that was spent waiting on other folks which killed my hourly rate. That said though, on my best day where I clearly remember there was no wait between customers (I remember this extremely clearly because I couldn’t stop driving until 2AM as one customer requested ride after another), I earned $63.58 in 6h, 35 min which means I earned roughly $10.59/hr which still isn’t that impressive.

Lastly, suppose you are a cab driver rock star and you’re on the top tier of drivers. And you’re driving in NYC (Lyft drivers make $10k annual than national average but also has a higher cost of living), then you’ll make $90k/yr as a very optimistic estimate.

But at $90k/yr, you’re not going to get very rich. And even if you somehow break the $100k/yr point, you still will not be very rich.

This is because:

1. You’ll need to pay taxes on your income so an increase from say $87K to $100K isn’t a $13K increase in salary, it’s closer to $9100.
2. Most importantly, you won’t have time for anything else. You’ll be driving all day and all night, which means you’ll sacrifice your health due to an extraordinarily sedentary lifestyle. And you won’t even have time to do research and make good investments with the money you’ve saved up so it’s not like you can exponentially compound your wealth successfully. You also won’t be able to start another business or create leverage on your time. An hour of driving will always equal some range of $/hr, and you can’t feasibly make $1 million/yr driving for Lyft/Uber, so there’s a very hard ceiling for you as a driver.

So even if you happen to make $100K/yr as a Lyft driver, you probably won’t pocket nearly $100K/yr and you’ll only even have a chance of hitting that number in a very high cost-of-living area. Quick example from smartasset.com: $100k/yr gross in NYC is a take-home pay of $68,428 after taxes in 2021. Say your rent is $2000/mo, you’re saving $44,000/yr if you didn’t have to pay for gas, insurance, etc. Your operating expense could be 10% of your gross income as we’ve seen in the example above, so you’re really saving $44,000 – $6842 = $37000/yr, before food and other expenses.

On top of that, with your under-$100K/yr take-home pay, you’ll need to risk your life every single day by having prolonged exposure to the risk of traffic accidents. And also you’ll have lived a sedentary lifestyle so you’ll probably die an early death making the entire pursuit of wealth useless as you won’t be able to enjoy it.

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