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How Much Does Lyft Take As A Percentage?

08/13/2019 @ 10:11 am

In recent years we’ve seen a drastic shift in the way people are paying for taxi services. New-found startups such as Uber and Lyft have radically altered the landscape, to the extent that it’s not even very similar to how it used to be anymore, such is their ubiquity.

While it’s a matter of personal opinion as to whether this is a good thing or a bad thing, nobody can deny the influx of comparatively cheap rides which have recently become available. Anybody who lives in a major metropolitan area can attest to the explosion in popularity of these services, and even those of us located in less built-up places can reliably find a Lyft driver waiting around a corner without too much hassle.

Cost And Convenience

Some bills in close-up.

One of the defining things about start-ups like Lyft is just how much cheaper a ride will cost in comparison to standard taxi services. Their app is straightforward to use, and anybody with a smartphone and an internet connection can have it at their disposal in a matter of minutes. Once a pipe dream, Lyft is now such an integral part of the urban landscape that it’s difficult to imagine life without it.

As well as taking over a large chunk of the taxi driving market, Lyft is also working to combat various public transport facilities which can be lacking in certain cities. Many of us can relate to the pain of waiting around on a crowded platform for a subway train to arrive, only to have to force our way through the crowd with our elbows to secure a space.

Shifting Landscapes

A person crossing a city street.

Although Lyft wasn’t designed specifically to fit that need, there’s no doubt that it has expanded what was initially taught possible in terms of affordable transport and is now an integral part of the economy. This explosion hasn’t come without a cost, however, as taxi drivers are finding themselves increasingly priced out of their own market, unable to come up with as steady a stream of customers as they need to make a living, and struggling to compete with the never-ending supply of drivers signing up to work with Lyft.

One indisputable thing about the taxi industry is that there have been a few major companies who have enjoyed a general monopoly on the service. It’s very difficult nowadays to break into the scene with one’s own taxi company, owing to the extravagant start-up costs required, not to mention the fact that it’s a business which requires a large amount of know-how to even function in the first place. For some people, the removal of the entire taxi industry from the hands of a few colossal organizations is a good thing, and for that reason they’re thankful for companies like Lyft. For others, it’s a shame to witness the decline of a respectable profession that has enjoyed space in our collective consciousness ever since its inception.

Who doesn’t associate the iconic yellow cab with New York? It’s almost impossible to even get a photograph of the city without taxis in it somewhere. And what about the black cabs in London, whose drivers are renowned for being knowledgeable, courteous, and an essential part of the character of the city as a whole?

Far-Reaching Implications

The question we’re interested in answering in this article is how much of a percentage Lyft takes from each fare, but the implications of the answer reach much further than a few figures. No matter how you personally feel about taxi driving as a profession or the companies who have been profiting off of it for a long time now, you’re going to have to come down on one side or another as to whether or not Lyft and companies like it are a good thing or a bad thing for our society.

Because it is a society that these groups are affecting, make no mistake. Getting from A to B is the only way we can even function as a community, and any innovation that makes a radical change to the way we do that is going to have seismic implications for the fabric of our society as a whole.

In the interest of discussing this question with the gravity and rigor of thought that the subject deserves, we’re going to first run through a brief history of Lyft as a company in order to understand how and where exactly they fit in to the development of ride-sharing services—which, after all, didn’t exist even 15 years ago.

Proper comprehension of any topic requires treating the history involved with as much respect as possible, given that it’s the only reliable information we have which can help us to predict how things will change in the future. Once we’ve understood a little better how Lyft came to be, we’ll be able to more fully appreciate the significance of how much of a cut they take from each fare. By the end of the article, with a bit of luck, we’ll have covered the topic sufficiently well to sate everybody’s curiosity.

Now that we’ve got the preamble and introduction out of the way, it’s time to get down to the brass tacks of the question itself. How did Lyft come to be? And how much of a share do they really take from their drivers as a percentage?

Where Lyft Fit In

Similar to Uber, Lyft’s position in the overall economic scheme of things is as a part of what’s called the ‘sharing economy.’ If the term is unfamiliar to you, you’re not alone: it’s a strikingly new notion in economics, and one which even now we understand very little about.

The gist of it is that a few pioneering people realized there was a gap in the market for people to share costs of common expenses, given that doing so would make it cheaper for everybody involved.

Far from the typical doctrines of capitalism, which state that competition drives innovation—and, conversely, that collaboration and monopolies can lead to stagnation—the sharing economy is working to prove that as humans, our natural desire to work together can have a solid grounding in economic theory and deserves its place in the market as a whole.

So how did Lyft get going?

The Lyft Story

Somebody reading a book.

In 2012, two computer programmers by the name of Logan Green and John Zimmer launched Lyft. They didn’t start it from scratch; rather, it was designed as an expansion to their carpooling company Zimride, which itself had been launched in 2007. The pair made friends for the first time on Facebook, through a mutual friend, and discovered that they shared an outlook with regards to the potential for a carpooling service to make it big.

The inspiration for Zimride and, by extension, Lyft, came about when Logan Green was using Craigslist’s ride boards to carpool between UCSB and LA. Feeling nervous about the prospect of not knowing the driver, he brainstormed a service that could remove the anonymity and risk. The name, Zimride, comes from Zimbabwe, where Green first noticed the local population sharing rides together in minivans.

The name was officially changed to Lyft in 2013, when the Zimride platform was sold to allow the company to concentrate completely on Lyft. Ever since, they’ve enjoyed a dramatic increase in popularity, even getting their own official day in San Francisco (July 13th, for those curious). When they introduced their ride-share concept in 2014, the user base started to grow even more rapidly.

A Very Public Flop

When they went public, however, it turned out that they had over-valued their company. There was a lot of controversy surrounding the role JPMorgan had to play in the offering, while George Soros was also involved to some murky degree, but the end result was clear: just like Uber, they flopped. What’s more, ever since the company’s inception they have lost money every single year. They’re yet to turn a profit.

While an in-depth economic analysis of what exactly has been going wrong with Lyft as a company is sadly beyond the scope of this article, we now feel that we can turn to the main question, having properly framed the topic in the context of the relevant history. How exactly does lift work? And how much of a percentage do Lyft take?

Lyft allows its users to call a driver to their exact location by using the smartphone app. Upon requesting a ride, a driver near your location will be alerted of your request, which they can either accept or decline. If they decline, another driver will be alerted, and so on. Payment information is stored in the app, and users can add a tip at the end, again through the app, if they feel like the driver deserved it.

Claims Vs. Reality

Lyft claims that their drivers can make up to $35 an hour driving for them, and that they only take 20% of the fare. They don’t advertise quite so vigorously the fact that they also take the entire booking fee, but there’s no reason to think that they take as much money from their fare as Uber, who have been shown to take between 39% and 42% of fares, with more money being taken by the company as the fare gets closer to the minimum amount.

Another thing to keep in mind is that Lyft doesn’t cover the expenses of their drivers, which can include the price of gas, the maintenance of the car, tolls, and self-employment taxes. While they will cover some of the liability and collision insurance in order to protect their drivers from professional claims, they won’t pay for the vehicle outside of times when the driver is actively working within their service.

It remains to be seen whether it really is a viable way to make money, given the percentage Lyft take from their drivers, similar to the situation with Uber. One study of Uber drivers in Detroit found that they were making less than minimum wage, for example, and given that the business models are practically identical between the two companies, you could reasonably deduce that a similar phenomenon is taking place with Lyft, whose drivers can either work full-time for the service or part-time as a way to supplement their main income stream.


In conclusion, companies like Lyft simply aren’t going away, and we might well expect to see even more start-ups in the future. Even though they have yet to turn a profit, they’ve proved that there’s a real market out there for ride-sharing services; and even though they take 20% plus the entire booking fee from each fare, they’re in no danger of running out of drivers anytime soon.

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