Economics/Class Relations

I drove for Lyft for a week and learned its business model is broken

Lyft charged one of my passengers $59. I got $16.52.

It was the Saturday night before Halloween, and I was ferrying costumed, intoxicated young adults around our nation’s capital. Shortly before midnight, I picked up a normally dressed woman in downtown D.C., who was heading home after a large fundraising dinner at the city’s convention center.

Demand was off the charts, and my passenger told me that Lyft had charged her $59 for our six-mile trip to Arlington, Virginia. I was surprised because that was far more money than I’d earned on any of the 24 trips I’d completed so far that week.

After I dropped her off, the Lyft app revealed my portion of the base fare: $16.52. My passenger added a generous $8.96 tip, for total earnings of $25.48. That made it my most lucrative trip that week. But Lyft raked in much more: $42.48.

A lot had changed since the last time I drove for Lyft as a journalistic experiment in 2014 (and wrote about it for Vox). Back then, drivers took home a standard 80 percent of a passenger’s fare, sometimes with tips and bonuses on top. Earlier this fall, I decided it was time to embed in the driver’s seat of a Lyft once again. It turned out that in recent years, the relationship between driver compensation and passenger fares has become … complicated.

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