Aside from, “You don’t do this full time do you?”, the title of this Blog post is probably the most asked question I receive as an Uber / Lyft driver. Whether you are a rider or a driver, please read on, because you will find value to understand the distinctions between the two platforms. Here are my observations from an insider point of view.
Each market is different. As a baseline for understanding, I’m a new driver. I typically drive on Friday and Saturday nights between 7pm and 3am. I started driving for Uber and Lyft around March 2015, and I drive in the United States of America in the sunny city of San Diego. It’s also important to understand that Uber and Lyft change their pricing structure whenever they want, so these numbers may or may not be the same as what you experience in your market.
So which one is better | Lyft or Uber? Well…It Depends.
When it comes down to fees, there’s not a huge difference. Uber charges about 22% of the total fare. Lyft charges about 20%. In addition, Lyft’s app has a tipping function for the rider and Lyft does not take their fee from the tip. So in the Lyft platform, 100% of tips go to do the driver. The sad reality is, with my experience, tips from riders in either platform are few and far between. So the tipping function isn’t much of a selling point for Lyft. (Although I’m thankful for it.)
Riders take heed. Understand Surge and Prime Time and how it affects your wallet. This is the both the beauty and danger of the Uber and Lyft platform. The prices for fares fluctuate based on supply and demand. Uber calls the increased price “Surge Pricing” and Lyft calls it “Prime Time”. Both are the same in concept. The unique differences between the two are: 1.) Lyft has a 200% cap on their Prime Time pricing. 2.) Uber has no maximum limit on their Surge Pricing.
Let me elaborate, as a rider, what you don’t see on your Lyft or Uber app is a graphical representation of the supply and demand of the local area you are in. Only Drivers see this information on their app.
Here is the difference between Uber’s Surge and Lyft’s Prime Time pricing. Lyft’s Prime Time pricing is concentrated on a smaller geographical area…it’s more localized and fine tuned to specifically surround high demand areas like concerts or specific bar scenes. Uber casts a larger net and blocks out multiple ZIP codes as seen in the graphic above. As a Rider, there’s not really much you can do. After all, the party scene is where the party is at. That’s just the cost of partying. The upside is getting an Uber or Lyft is much cheaper than a DUI. As a Rider, your only other options to saving money is to just not go out to high demand areas, or to get a designated driver to pick you up.
Drivers take heed. Uber’s no cap on Surge Pricing doesn’t always equate to more money. True story people. I was in the red zone in downtown San Diego at 2am. I looked down at my cell phone and saw on my Uber app a surge price indicator of 5x. This is where all Drivers want to be: the right place at the right time. Historically, when I’m driving at night I usually find myself driving away from the party zone to drop off rock stars back at their pad. So I never really get to spend much time in the much coveted red zone. I thought to myself, “Finally, a full night’s driving is coming to crescendo.”
This is where my experience literally took a turn. I was in the right place in 92101 downtown San Diego gas lamp district. It was the right time. Surge pricing was over 500%….and I didn’t get one ride request on Uber….not one bite. Then I thought about it from a Rider’s perspective. Uber’s Surge Pricing went so high that Riders just switched to the Lyft app because the cap is only 200%. The net result was that their app’s were telling them they would save money using Lyft.
After 10 minutes of just waiting in the red zone, I finally turned off my Uber app and put my Lyft app in driver mode. Within 1 second of switching to Lyft, I received a ride request from a group of 4.
That is the cut throat concept of economics 101 supply and demand happening at lightning speed in the real world.
Uber or Lyft | Which One Is Better?
While the concept of Uber and Lyft is very similar on the surface, it’s now apparent that each has it’s own unique place in the dynamic market of ride sharing. My on-the-ground experience of both platforms is typical of other Drivers: At the start of a night of work, I always turn both apps on for equal opportunity sakes. Which ever app gets me a ride request first, I just turn off the other app.
In summary, 9 times out of 10 it’s the Uber app that gets me the business I need. So regardless of Lyft’s better percentage payout, Uber still pays me more in the long run. It’s only in extreme Uber Surge Pricing times, when Rider’s choose Lyft’s Prime Time prices. So whether you’re a Rider or a Driver, it’s in your best interest to utilize both platforms to get yourself the best price based on your situation.