Uber vs. Lyft – Should I Become a Driver? (Make Extra Money Fast!)

Unless you live under a rock, you’ve at least heard of Uber, and maybe also their closest competitor Lyft.

If you’re unfamiliar with Uber or Lyft, these are basically taxi services to give rides in your local area. All the drivers are independent and work their own hours. Simply login to the app provided by Uber or Lyft and start picking up people and giving them a ride.

To give you an overview of what it’s like to be a driver, I had my husband (and behind the scenes partner here at Savvy Savers Academy) Nate answer some questions, as he has driven for both companies.

What is the difference between Uber and Lyft?

Depending on your area there are some differences between the two services.

Uber in my local area is much more well-known and this can mean more ride requests.

Though not as popular in my area, Lyft has a lot more perks for their drivers. For example, Lyft offers hourly guarantees, streak bonuses, and what they call power driver bonuses. These bonuses (described in greater detail below) are designed to keep driver's logged into the Lyft app. In my experience, the bonuses easily compensate for the lower number of ride requests made through Lyft in my area.

When looking to become a driver for one of the two ride share services, one huge difference is the sign on offerings.

• Uber - At the time of this interview, Uber is offering a $200 guarantee after 30 rides. This means that you are guaranteed to make $200 in after providing 30 rides. If you don’t, Uber will pay out the difference. For example, if you give 30 rides and make $175, Uber will pay you a $25 bonus.
• Lyft – At the time of this interview, in my local area, Lyft offers new drivers a $750 bonus when you complete 150 rides in 50 days. (The amount of this offer and conditions to qualify will vary from time to time.) Once you meet the requirements of the sign on bonus, Lyft gives you the bonus in addition to any money you have previously earned (which is very different from Uber's offer). 

You mentioned tips, is receiving tips common as a driver?

There is a big difference between tips for Uber and Lyft.

Uber added the ability to tip to their app about a year ago, so it's a fairly recent change.

Lyft has always had tipping as part of the app.

If you have used both services, you know that Lyft solicits a tip from the rider sooner in the rider experience than Uber does. As Uber also added tips long after Lyft, most Uber users are used to rides without tips. As such, I make a lot more tips when I drive Lyft.

How do you become a driver?

It’s super easy to become a driver for both Uber and Lyft. It can be done through the apps or through their website.

Once you start the signup process, you provide some basic information, similar to what you would for a job application. Then you provide a photo of your driver's license and insurance. Some areas require a vehicle inspection form or other paperwork. Lastly, you authorize a DMV and background check.

Both companies are very fast at this process and it is possible for you to be driving and earning money within a day or two.

What are the requirements to become a driver?

Both companies have the same basic requirements. A few examples include:

• Over the age of 18
• Vehicle within a certain year range and the ability to have at least four passengers (vehicles with more seats can earn more money and "luxury" vehicles can earn a premium)
• At least one year of driving experience
• Passing a DMV and background check
• Valid driver's license
• Valid insurance
  Please note: When you are transporting a rider, you ware covered by Uber/Lyft's insurance. However, your personal insurance may not cover you when you are "waiting" for a ride (i.e. logged in as a driver, but do not have a passenger in your car). You should check with your insurance agent to find out if you are covered. Some insurance companies require an additional premium for coverage during the time you are logged in, but do not have a rider.

How much do drivers make?

Since you are an independent contractor, you can make as little or as much as you want. It depends on how many rides you give.

The times and places of rides you give also affect how much you can make. For example, both companies, based on demand, offer more money when you pick up a rider during designated peak times and locations. These pay increases can mean anywhere from 25% to over 200% more money for the ride you give.

Every driver’s earnings are different and there is a learning curve when you start driving.

The more you drive, the more you will learn how to use your time and gas to maximize your number of rides and earnings.

​Related Article: 6 Legitimate Home Business Ideas You Can Start This Month

How do drivers get paid?

Both companies pay earnings weekly. What you earned for the prior week is usually direct deposited into your bank account each Wednesday.

Both also offer an express pay option. For a $0.50 fee, you can get paid immediately. When I've used this option, the money usually hits my bank account within minutes.

What incentives or bonuses do drivers get?

Both companies have perks for drivers that can include discounts on cell phone monthly charges, gas savings, and other items that you may need.

In my market, Uber does not currently offer money incentives or bonuses to drivers. The only offer is a referral bonus. Once someone you refer completes a required number of rides, you can earn a .

Depending on your area, Uber offers drives the option to deliver for UberEates. The key to any driving job is the more requests, the more money you make. By offering the UberEats option it gives more opportunity for requests and therefore, more money.

Lyft has an extensive number of monetary bonuses they offer drives. Some of these bonuses include:

• Power driver bonuses – Weekly bonus based on the total number of rides, peak hour rides, and ride acceptance percentage.
• Hourly guarantees – These are offered during specific hours. When you stay logged in for at least 50 minutes of that hour, provide a minimum number of rides, and accept the rides offered, Lyft will guarantee you a certain earning for that hour. If you make less, Lyft will pay you the difference. In my area, I have seen the guarantees up to $35 an hour depending on the day, time, and zone.
• Steak Bonuses – These bonuses are paid when you start a ride "streak" during a specified time and then stay logged in until the required number of rides. For example, they may offer a $15 bonus on a 3 ride streak between 4:00 and 5:00. This means if you pick up a rider between 4:00 and 5:00 and stay logged in until you complete 3 rides, you will get an extra $15.

Can you drive for both companies?

Yes. You may want to try both to see which works better in your area.

There are some systems in place, specifically through Lyft that discourage you from being logged in to both Uber and Lyft at the same time.

For example, you might only qualify for certain bonuses through Lyft if you remain logged in to their app for at least 50 minutes of an hour and accept at least 90% of the ride requests they send to you.

If you try to log in to both apps at the same time to see who would send you a ride first and pick up a ride from Uber, you’d either have to log out of Lyft or decline a pick up. Both of which look bad and can disqualify you for bonuses that are available at the time.

Do you have any other advice or tips for those considering being a driver?

Both Uber and Lyft require their drivers to maintain a minimum driver rating to stay in good standing.

After every ride your rider has an opportunity to give you a rating between 1 to 5 stars. If you fall below their required level, you are at risk of no longer being allowed to be a driver.

Giving a 5-star experience  will allow you to see an increase in tips. Here are a few ideas to create a 5-star experience to your rider:

• Keep your car clean. No one likes to ride in a car that is cluttered or dirty. Additionally, the smell of your car is important. It should smell clean, I suggest keeping a travel size Febreeze in your glove box. If you have a passenger that has a heavy smell of smoke or alcohol, give your car a quick spray after the ride. Then your next passenger will feel like they are in a fresh clean car.
• Offer complementary water. Sam's Club or Costco has small 8-oz bottles of water that you can buy and they are very inexpensive. In my area I get 80 bottles of water for about $7. I then keep enough water for the shift I am driving in a small cooler in the trunk of the car. After each ride, I fill the cup holders in my car with the bottles and offer them to my next ride. One thing to note, the cooler needs to be small, as some passengers may have luggage that you need to put in the trunk.
• Be polite and courteous. This goes without saying, but many riders have shared experiences with me where they will ask the driver a question or to stop at McDonald's on the way to their destination and the driver was rude to them. Being polite and courteous not only gives you higher ratings, but it also will increase your tips. Believe me, going that extra mile will pay off.
• "Read" your rider. Some riders really enjoy friendly conversation, others would rather look at their phone in silence. Try to notice what they would prefer.
• Have phone chargers and an AUX line available. Many times, riders are coming from a place where they have been using their phone and have not had a chance to charge it. You can buy plugs for the car that have two USB plugs. Have an extra cord for your passenger to charge up. Another cord that is helpful is an AUX cord into your radio. Sometimes passengers want to pick the music for the ride. This allows them to play the DJ and make their trip more enjoyable.

Here are some tips to help maximize your earning potential and make more money:

1. There is an initial learning curve that you need to get past. The bottom line is the more time you spend with a rider in the car, the more you earn.
2. Look for "surges" (Uber) and "prime time areas" (Lyft). Surges or Prime Time Areas show areas with a high number of requests and where you can make more money.
3. Airports are easy rides. At my local airport, a traveler is requesting a ride about every 30 to 50 seconds. The airports use a queue system for ride requests, based on your place in queue you will receive the request. Waiting in the airport queue will produce a ride, it is just a matter of time. If things are slow in town, I can always go to the airport and get a ride.
4. Big events mean big earnings. Keep track of when and where concerts, sporting events, and other special events are going on. People hate parking at these events and taking an Uber/Lyft is a great option. When the events end, there is usually a premium for pickups near the venue due to high demand.
5. Colleges and Universities are great for quick rides. If you are looking for a high number of rides (like when you are trying to get your sign on bonus), Many students do not have cars and depend on ride shares. Being in these areas can bring in a high number of rides for students taking short rides around campus.
6. Learn your local laws for last call. About an hour before last call, ride requests by bars and pubs will start to increase. This high demand will remain until about hour or two after last call. In highly populated areas, this may also cause increased earning or premium pickups.
7. Refer other drivers. You can make extra money and earn a bonus by helping your friends and family get started driving. If you love it and find it's helpful to make extra money, it's a great opportunity to help out your friends and family.

Final Thoughts

As a second job, it has a lot to offer. You are an independent contractor and have the flexibility to work when you want, for as long as you want. Both companies offer weekly pay, or for a small fee ($0.50) you can get paid immediately.

Additionally, on nights and weekends you are helping to keep the roads a little safer by providing rides to people who may be enjoying some drinks and should not be driving.

What are your thoughts...

Have you ever thought about becoming a driver? What questions do you have? Or, if you are a driver, what tips or advice would you like to share? Leave your thoughts in the comments below.

(*Terms, conditions, bonuses and pay may be variable by location and may be different at the time you are reading this. Please refer directly to Uber and Lyft for the most current information.)