When I started driving back in 2014, the take rate for both Uber and Lyft was a standard 20%. So for every ride, I would get my 80%, they would take their 20% and a small service fee. But with the advent of upfront pricing and a migration away from drivers getting a percentage of each ride to drivers getting paid a standard per mile and per minute rate, it seems like Uber and Lyft’s take rate has risen a lot over the years.
On average, what is the take rate today?
Take a look at the video below to see what percentage Uber & Lyft really take, or scroll to the transcript of the video if you prefer to read.
Note: For California drivers in 2020, Uber has moved back to a 75/25 split. This video is still relevant to almost all of the US, and Lyft in California.
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Jalopnik recently published an article entitled “Uber And Lyft Take A Lot More From Drivers Than They Say.” In the article, they say they ask drivers to send in fare receipts with earnings breakdowns. In total, they received almost 15,000, and of all those nearly 15,000 fares, Jalopnik found that Uber kept on average 35% while Lyft kept on average 38%. Lyft keeps more than Uber, that really surprised me.
Our Test: How Much of a Fare do Uber & Lyft Really Take?
To see if these numbers actually jived, I did some analysis of my own on a week, just driving exclusively for Lyft. In July, I created a spreadsheet and this spreadsheet will be available in the description if you want to take a look at it. But for the week I gave 55 rides and before tips I earned on average $9 and 14 cents per ride, and Lyft received on average $6 and 15 cents per ride. A take rate of 40%, a bit higher than the 38% that was reported by Jalopnik.
Full disclosure, I did also receive a $65 weekly ride challenge bonus that week, so that reduced Lyft’s take rate for the week to 32%.
But on average before the weekly ride challenge bonus, Lyft was taking 40% of each ride, and I’m actually grandfathered into 5% higher rates than most drivers. Most drivers that week would have seen Lyft take 45% of each ride.
How do Lyft and Uber Take so Much From Each Fare?
How have they been able to get their take rates so high? They’ve done it by finessing how drivers are getting paid. We used to get paid a certain amount, a certain percentage of each ride. Now we’re getting paid a per mile, per minute rate. There’s also upfront pricing, so the disconnect between what a passenger pays and what a driver gets paid is further apart.
There really can be sometimes not much correlation at all, and also with the advent of Lyft’s Personal Power Zones and Uber’s flat rate surge, it has a lot of drivers thinking that Uber and Lyft are taking even more now. The optics for Uber and Lyft are not good right now.
You have this Jalopnik story, you have the AB5 Bill in California, you have Lyft’s recent rate cuts in over a dozen markets, and this is clearly hurting them in the public markets as their stock prices are plummeting. This is an interesting time in ride share. Since Uber and Lyft are public companies now, it feels like there’s a bigger microscope on them than ever, and I for one embrace it. These companies have had far too much freedom for far too long, and the general public is finally starting to understand what these companies are doing and how the ride share business actually works.
What Can Drivers Do About High Take Rates?
The best thing you can do is diversify. Drive for both Uber and Lyft. I’ve been driving for Lyft for all these years. Lyft just made this recent rate change. This week I switched over to Uber and I’m making what I was making with Lyft before the rate changes. Maybe even better.
You can sign up for other companies, package delivery, food delivery. But have you done a similar analysis of your earnings like I did? What were your results? I think I already know the answer, but were you surprised by the 35%, 38% take rates that Uber and Lyft have now? Leave a comment below and let us know. Thanks again for watching and reading!
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