Your around-the-corner Uber or Lyft ride may pay drivers $3 or less. Some say it's a nightmare.

• Ride-hailing drivers are reporting sub-$3 fares, often earning less than a cup of coffee per trip.
• It's part of a broader trend of gig drivers saying they're seeing lower pay.
• Uber and Lyft told BI that drivers earn more than $30 an hour while engaged on the apps.

The Uber or Lyft driver who took you from the office to a nearby restaurant downtown might not be able to even buy a cup of coffee with the money made from your trip.

Eight ride-hailing and delivery drivers shared screenshots this month with Business Insider showing nearly two dozen recent trips, ranging from five minutes to 15 minutes, that paid at or below $3, excluding tips.

One screenshot from a Lyft driver based in Arizona showed a $2.62 ride that took 15 minutes and traveled 4.32 miles. This was the amount offered to the driver on the platform before it was accepted and before tips. Similar screenshots came from drivers in Cleveland, Houston, Fort Lauderdale, and Orange County.

Sergio Avedian, a gig driver and senior contributor at the gig-driver-advocacy blog and YouTube channel The Rideshare Guy, has started encountering sub-$3 rides over the last several weeks in Los Angeles. He said many drivers across the country have written to him recently complaining about these rides, which can be unprofitable after accounting for driving expenses.

"These short trips actually put more wear and tear on your car than these long trips because you're braking and accelerating constantly," Avedian said, noting it's becoming increasingly rare he gets well-paying rides.

For some drivers, these sub-$3 trips are a symbol of their broader frustrations with their pay. In recent months, several gig drivers have told Business Insider that driving is less profitable than it used to be and that ride-hailing giants are taking a larger cut of rider fares. Research shows that drivers across six ride-hailing and delivery platforms earned well below the local minimum wage after accounting for expenses, even with tips included. Drivers' frustrations have led to protests and calls for higher guaranteed pay nationwide.

To be sure, gig drivers who come across a sub-$3 trip can always reject it — but many say profitable trips have become harder to come by.

$3 trips aren't worth it for many drivers

The screenshots showed that the sub-$3 trips generally required drivers to drive no more than 10 minutes, including the time spent driving to the pickup location and then to the customer's destination.

According to some drivers, shorter rides can be preferable if they pay more per mile. But for many, the math on these rides doesn't add up.

For example, a Florida-based driver sent a screenshot of a ride that paid $2.36 after deductions and required an estimated four-minute drive to the pickup location — and then an additional six-minute drive to the destination. Less than $3 in earnings for 10 minutes of work translates to almost $15 an hour, slightly above the state's $12 minimum wage.

But this doesn't account for the time drivers wait for customers to find them at a pickup location. Nor does it account for driving expenses like gas, maintenance, and depreciation that can eat into a driver's profits. In February, Lyft estimated the typical driver had about $7 each hour in vehicle expenses.

A customer tip can tilt the math back in the driver's favor, but they're not guaranteed. A study of over 500,000 US gig drivers by Gridwise, a data analytics company that helps drivers track their earnings, found that 28% of Uber and Lyft ride-hailing trips received tips.

Business Insider reached out to Uber and Lyft for comment. An Uber spokesperson said that across the US, drivers are "earning more than $30 an hour while engaged on the app." They added that in states like California, where a minimum pay standard is in effect, drivers can count on a certain level of pay.

A Lyft spokesperson wrote in an email: "In Q1 of this year, the median US Lyft driver earned $31.10, including tips and bonuses per hour of engaged time. After considering estimated expenses such as gas and maintenance, that's around $24.25 per engaged hour."

Earlier this year, Lyft announced it would start guaranteeing drivers earn 70% of their riders' payments each week after external fees. In December, Uber said that its "take rate" — the share of ride-hailing revenue as a percentage of gross fares — is well below 20% when one excludes the commercial insurance costs the company provides to drivers.

To be sure, rides with bottom-of-the-barrel fares appear to be rare. Data provided to Business Insider by Gridwise showed that so far in 2024, fewer than 1% of completed US Uber and Lyft trips paid drivers below $3, excluding tips. In comparison, over 36% of Uber Eats, DoorDash, and Grubhub completed deliveries paid less than $3 before tips. However, after tips, the share of sub-$3 deliveries fell to below 2% on all three platforms.

Compared to January 2023, sub-$3 trips — excluding tips — have become more common for DoorDash, Grubhub, and Uber Eats drivers and less common for Uber and Lyft drivers, per Gridwise.

Gridwise noted that its earning data does not include earnings tied to promotions or minimum pay standards. Given it only included completed trips, it doesn't account for the sub-$3 trips, for example, that a driver sees and declines.

The $3 ride could have a future if drivers stay desperate

Avedian explained that because of the oversaturation of ride-hailing drivers, desperate drivers are bound to accept these trips. He said even if he rejects a low-paying ride, it "gets snapped up immediately." Otherwise, the pay would likely increase if drivers rejected these rides since drivers would be more likely to accept a higher-paying ride.

"In 2024, putting a human in my car for $3 or less is asinine to me," Avedian told BI. "Gas prices in California are hitting $5.50, and to me, this goes to show how out of touch these companies are that our expenses have gone up 40%, 50%, even 80% in a lot of cases, and the fares have gone down."

He said the risk-reward is "completely upside down," arguing these companies should set minimum fares of at least $5.

"I will reject a million of those and then turn my app off and go home," Avedian said. "I cannot run a profitable business by doing $3 trips."

Drivers say they're seeing more sub-$3 trips

Randy Scott, 46, has driven for almost six years and has over 25,000 rides on Uber and Lyft. He drives in between managing local and state political campaigns. The South Florida resident said he's recently seen more rides under $5 coming in, which he suspects is because more immigrant drivers in his area regularly accept these rides.

A screenshot he shared with BI shows a ride for $2.30. From a business perspective, he said he understands why these companies would continue offering low rates if they'll always be accepted eventually.

"At the end of the day, people are out driving in good faith, trying to make money and work, but they don't necessarily have the knowledge to say, 'wait a minute here, they're offering me $2,'" Scott said. "There's got to be a line drawn somewhere."

He said the positives of driving still outweigh the negatives, as he's developed strategies for earning about $900 gross revenue driving 50 hours a week. Every week, his strategy is different, as his area is seasonal with tourists.

Still, he said even on slow days, he'll take the $4 ride as it's at least a couple of dollars, plus a tip.

He said gig driving feels like the "Wild West" right now, noting that state governments should work to regulate the driver market to help drivers earn a living wage."I don't think drivers are asking for the moon," Scott said.

Moises Diaz, a 41-year-old Uber and Lyft driver in California, started driving part-time in December. But May was the first month that he started seeing rides that paid roughly $3 or less, and now they're "coming in very often," he told Business Insider via email.

Even for longtime drivers, the appeals of driving may not be enough to overpower the declining pay.

Joe, a 53-year-old in Florida, has been driving for Uber since 2014. He asked to use a pseudonym for fear of retribution and told BI he's "never seen pay this low."

"I see these sub-$3 fares at least between five to 10 times during a six-hour shift," he said.

Are you a gig driver who is struggling to make ends meet? Reach out to these reporters at [email protected] or [email protected].