Explaining the Pay Confusion

There are things the companies say that have a lot of people confused. Smart people. Why? Because they use language to make things look better than they are.

What you get paid

The basic line from Uber and Lyft is that you get 75% of what they charge the passenger. That is not true. The companies set a fixed price before the passenger agrees to get picked up. You get paid based on what you actually did. For instance, let’s say they billed the passenger for 5 miles and 10 minutes. But you know a shortcut that means you drop them off in 4 miles and 8 minutes. You get 75% of the fee that would be charged for what you actually did. They charge the passenger for the anticipated fixed fee. The company keeps the difference.

And UberPOOL and Lyft Line pay more like 40%. More on that soon.

Guarantee vs Bonus

Lyft uses guarantees a lot. An offer will go something like “Your ticket to $220. It’s a go, John. Drive knowing you’re getting a guaranteed $220 in two easy steps.” A guarantee is a minimum that you will earn if you meet their criterion. Subtract from the $220 all the money you earn and all the TIPS you earn as well. If those add up to more than the $220, you get nothing. And btw, you only get 75% of the $220, so really $165.

A bonus is on top of whatever else you earn. Drivers used to get a bonus for signing up after driving a certain number of rides. Now both Lyft and Uber tend to use guarantees instead of bonuses for new drivers

NOTE: Lyft specifically talks about earnings all the time and not your take home. Uber is better at talking about take home. Earnings is a fake number to fool your head. Even I, the math loving guy, get confused at times.

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