I noticed today that my driver statement from Uber had a $10 weekly device fee, which means that if I don’t drive for Uber in a week, I’ll actually lose $10. I’m not sure if this just applies to Denver drivers or other markets as well.
Yesterday, Lyft sent out an email explaining its new commission structure. The Lyft commissions are based on how many hours you drive. It’s 20% unless you drive more than 15 hours a week, as shown in this summary graphic below.
The more you drive for Lyft, the lower the commission. Douglas MacMillan at The Wall Street Journal explains the system this way:
To soften the blow, Lyft created a new tiered bonus system which will reward the most active drivers by reducing commissions on their rides. A driver who logs fewer than 15 hours will pay the full 20% commission; those who drive 15 to 30 hours a week will owe 15%; 30 to 40-hour drivers will pay 10%; and those who log 40 to 50 hours will owe 5%. Drivers who clock in more than 50 hours a week won’t have to share any fees with Lyft. The company also said it will begin keeping 20% of “prime time” pricing, a policy change that could deter drivers who are used to keeping all of those extra fees to themselves.
Both of these moves hurt drivers’ bottom lines, but if you expected to have a steady, predictable wage while working for Uber and Lyft, you picked the wrong business and should bail right now.
Riders often ask me what’s the better deal: Uber or Lyft? But with the prices for passengers and the fee structures for drivers changing by the day, I don’t have a good answer to the Uber vs. Lyft question, especially since all bets are off when peak or surge pricing kicks in.
In recent months, there has been a huge influx of ridesharing drivers. Lyft says it now has 60,000 drivers. So I can’t say I’m surprised that it’s becoming less profitable to be a driver. The same laws of supply and demand that allow drivers to reap windfalls during peak and surge pricing periods also work on the labor market side of the equation!
It seems like both companies are trying to weed out the drivers who are only occasionally working while creating incentives to have more drivers online. It’ll be interesting to see if this latest shakeup dims enthusiasm among drivers, leading some to quit altogether.