Here's how much Lyft says its drivers make — and how much their expenses add up

• Lyft said the median driver who uses a personal vehicle pulls in a net $23.46 per engaged hour.
• This accounts for tips, bonuses, and expenses — and defines an engaged hour as time spent on rides.
• Lyft said it will guarantee drivers 70% of their weekly rider payments after external fees.

How much does the typical ride-hailing driver make an hour? Lyft provided an updated look under the hood.

During the second half of last year, the median US Lyft driver who used their personal vehicle grossed $30.68, including tips and bonuses, for every "engaged" hour on the Lyft platform, or hour spent on rides, according to a company release. Lyft said this engaged earnings figure has grown over 18% compared to the second half of 2019.

Many Southern cities, including Atlanta, Dallas, Houston, Miami, and Orlando all fell below the median for hourly gross earnings.

"Long-term, we are focused on helping drivers understand whether using rideshare makes sense for them," Lyft wrote in the white paper.

How Lyft calculates earnings and expenses

Using car ownership data from AAA, Lyft estimated that the typical driver has $7.02 per engaged hour in marginal driving expenses, bringing the typical driver's net earnings per engaged hour, after expenses, to $23.46, per Lyft's calculations.

Lyft said a large majority of its drivers don't solely rely on Lyft driving for their total income. 94% of Lyft drivers drive less than 20 hours a week, while two-thirds drive for other apps. Still, many drivers who spoke to BI said gig driving is among their only options for work, whether due to a disability, being a parent, or immigrating from a different country.

In a November earnings call, Uber said drivers' earnings levels were about $33 per engaged hour across the US, not accounting for driving expenses.

Lyft's findings were released alongside an announcement that it will guarantee drivers 70% of their weekly rider payments after external fees, which include local taxes and government-mandated extra insurance. The company said that last year, about 15% of drivers earned less than 70% of payments after fees. Lyft also said it will take steps to provide drivers with greater detail about how their pay is calculated.

Sergio Avedian, an Uber driver and senior contributor to the gig-driver-advocacy blog and YouTube channel The Rideshare Guy, told BI that up to a quarter of rider payments could continue to go to external fees — so drivers may only be guaranteed 70% of a reduced figure.

Calculating gig driver earnings is complicated

Figuring out hourly earnings for a job like gig driving can be tricky, and Lyft's estimates might not show the full picture.

Engaged hours, for instance, only include the time the drivers spend driving to a rider's pickup spot or taking them to their destination. Drivers have told Business Insider that the time between rides — which might be used to relocate to a higher-demand area, fill up their gas tank, or scan the app for profitable trips — should be factored into their hourly earnings.

Online work hours, when drivers have the app open, provide a more accurate time estimate for some drivers. Non-engaged hours can add up when working full time, among the reasons some drivers think ride-hailing is better as a part-time gig.

Additionally, some drivers could have more ride-hailing expenses than Lyft estimated.

Expenses can be fixed or marginal. Fixed costs include car payments, vehicle registration, and car insurance. Marginal costs include fuel, maintenance and repairs, depreciation, and cleaning. Lyft's expense calculations only included the aforementioned marginal costs.

There's a wide spread among how much drivers make. Nationwide, the 20th percentile for Lyft driver earnings averaged $17.46 per hour after expenses, while the 80th percentile is $33.09 per hour. While Chicago averages $26.90 per hour, Charlotte is $18.72 per hour, Lyft wrote.

Some drivers who spoke with Business Insider said they were making between $10 and $15 per hour, including time spent waiting for new rides. For a 15-minute ride, some drivers told BI they may lose money if a rider tips poorly.

Lyft estimated the average expense for US drivers while using Lyft is about 31 cents per mile. This breaks down to $0.13 for fuel, $0.10 for maintenance and repair, $0.06 for marginal depreciation, and $0.02 for cleaning.

The marginal cost per mile is highest for pickup trucks at $0.43, followed by midsize pickup trucks at $0.40 and medium SUVs at $0.37.

"There are also factors within Lyft's control, like the share of rider payments that we take to build a high-quality matching platform, provide comprehensive customer support, and continue to develop safety features," Lyft wrote.

Are you a gig worker willing to share your story about pay, schedule, and tipping? Are you a Lyft driver willing to share your story about pay and how Lyft's new policy has impacted you? Reach out to these reporters at [email protected] and [email protected].