Is Driving for Lyft Worth It?

If you're considering taking on a side gig, you've undoubtedly heard of Lyft. As the second largest ride-hailing company in the U.S., Lyft offers its drivers numerous ways to earn money, from getting bonuses to keeping 100% of your tips. But does it offer its drivers enough benefits, and will it give your personal finances the boost you're looking for? Let's take a closer look.

How much do Lyft drivers make?

Lyft drivers typically earn about $19.90 an hour, according to Gridwise. Indeed puts the average hourly wage even higher at $22.19, with a low of $7.25 and a high of $45.30, though its data is based on only 80 reported salaries and might be skewed by higher grossing drivers.

That said, how much you actually make will depend on numerous variables such as where you live, when you drive, how many Lyft drivers are in your area, and the time that elapses between getting a request and meeting passengers, among others. For instance, if you're driving in a high demand area (such as San Francisco) and only during peak hours, you'll likely earn more than a driver in a low demand area, even if you drive the same number of hours.

Notwithstanding market factors, Lyft drivers make money in three ways:

• Upfront pay: This is what you earn for completing a ride and will be stated clearly before you accept a ride, so there's no surprises on how much you can earn for it. (Note: if you live in Portland, New York City, Toronto, or Washington State, Lyft will pay you per minute and per mile, based on your area's rates, not upfront).
• Tips: You get to keep 100% of your tips.
• Bonuses: Every so often Lyft will offer you challenges or bonuses, especially during peak times and holidays. You can also earn bonuses by driving in bonus zones and completing multiple rides during busy times.

Lyft will deposit the money you earn into your checking account weekly, but you could also get instant payouts with the Lyft Direct debit card.

Does Lyft cover a driver's expenses?

No, Lyft does not cover a driver's expenses, like car payments, gas, maintenance, and repairs. That said, Lyft does provide some car insurance while you're driving, such as liability coverage and uninsured motorist.

What extra perks does Lyft offer to drivers?

Lyft drivers are independent contractors, so they're not employed by Lyft. That means not only do Lyft drivers have to pay all of their taxes, they also don't get company benefits, like company-sponsored 401(k)s or health insurance.

But that's not to say Lyft drivers don't get any benefits at all. In fact, in some markets, Lyft drivers get access to a reward system aimed at reducing the costs associated with driving. The system, dubbed "Lyft Rewards," will slot you in one of three tiers based on your driving score and how frequently you work during busy hours. Here are some benefits that come with each tier:

The cash back on fuel is available only if you use the Lyft Direct debit card. For more information on how to reach these tiers, check for "Lyft Rewards" in your Lyft driver app, as qualifications depend on your market (if you don't see "Lyft Rewards," that means it's not available in your zone yet).

So, should you drive for Lyft?

Lyft is ideal for those who want to earn extra cash fast. Since Lyft pays its drivers weekly, you can rack up extra savings and meet personal finance goals, such as paying down debt or building an emergency fund.

However, depending on where you live and when you drive, the pay might not be worth the physical wear-and-tear to your car. In fact, this might be a difficult career to sustain over long periods, especially if you're driving at inconvenient times just to hit bonuses or get peak-hour pay.

But for those who want to work on their own clock, Lyft can definitely be an alternative to your typical part-time job. You could even pair it with other ride-hailing or delivery platforms -- Uber, Instacart, GrubHub, or DoorDash -- to see which one you enjoy the most.