There’s a new sensation that’s sweeping the taxi cab world and it’s called Uber! Or Lyft. I actually don’t have a preference but in essence the two competitors offer the same service: a more convenient and cost-effective alternative to traditional taxis. Let me make this clear: I absolutely hate taxis. I don’t know how they’ve gotten away with such crappy customer service for so long and I’m ecstatic that there are companies like Uber and Lyft that are coming along and putting them in their place.
When it comes to ordering a taxi, I never know which number to call and they never seem to be available when I need them. My biggest pet peeve though is that they don’t accept credit cards. Every time I get into a smelly and dirty taxi I wonder how these guys are still in business. I could go on and on about my disdain for taxis but now that Uber and Lyft are bringing competition to the market, it’s a great thing for consumers. The two companies are essentially taxicab services but offer more convenience and much better customer service. You can only order a ride through your smartphone and your credit card is linked to your account so you can pay and even tip with your card.
The thing that makes Uber and Lyft unique though is that most of the drivers are every day people like you and me. Anyone can apply to be a driver as long as they have a car that’s four doors and 2005 or newer(2000 or newer for Lyft). Most of the people who drive for them are courteous, respectful and friendly. The two services have actually gotten so popular it’s becoming hard to find a ride – especially during peak times. And every time I take a ride, the drivers are always telling me that they need new drivers and if I know anyone that’s interested, I should tell them to apply.
The most important thing you’ll need to consider when driving for Lyber(as I’m going to call them from now on) is if the pay is worth it. Most drivers are compensated at least $15-$20 whether they actually give a ride or not. So you could potentially be sitting at your house making $20 an hour ‘driving’ for Lyber. And in fact, that’s exactly what my driver the other night told me he does. Lyber are both new to Orange County so it’s not as popular as it is in major cities like Los Angeles and San Francisco(it’s so popular here they’ve implemented a different pricing structure!) yet. My last driver told me that we were his only ride of the night and he just sat in his car reading a book for 2 hours and got paid the entire time. Now that’s my kind of job!
Obviously it won’t be like that forever though and once the service starts to pick up, drivers will be forced to drive more. Lyber doesn’t reimburse you for your mileage so it’s up to you to deduct it on your taxes. You’re going to need a good CPA to help you figure out what you can and can’t deduct. But since you’re running your own business with your car, you should be able to deduct mileage and expenses. The federal mileage reimbursement rate is 56 cents per mile as long as you’re not going to your normal place of business, which should apply in this case since every ride you give will be unique(I actually used to take this deduction for my last business). 56 cents a mile isn’t a ton of money but it should come close to covering maintenance, expenses and gas(depending on your car).
The pay will definitely favor those with higher MPG cars since once you’re driving around more, you’ll be spending a lot more on gas. Neither Lyber nor the government will re-imburse you for this portion so I’d recommend a high MPG car if you’re going to become a driver.
There have been a lot of stories lately about the insurance risk of driving for Lyber. Your insurance may or may not cover you in the event of a crash since you’re actually a commercial driver when you’re transporting passengers but you’re a regular driver when you’re not. Since the industry is so new, a lot of the current laws and regulations don’t apply to Lyber so it will be very interesting to see how they all play out. I think eventually, Lyber will have to offer some sort of secondary insurance but for now that’s definitely the major risk.
The Benefits & Flexibility
The cool thing about Lyber is that they are pretty flexible when it comes to what hours you can work. There are probably lots of times when you’re sitting at home bored with nothing to do. You could easily go out and give a few rides to earn some quick cash whenever you’re bored. It might not be enough for a full time job, but at least it could provide for some extra beer money.
Work can actually be a lot of fun if you’re able to do it part time and set your own schedule. The nice thing about driving for Lyber is that you will see a direct correlation between how much you work and how much you get paid. If you feel like taking a week off of driving, that’s fine, but you won’t get paid. If you need to make some extra money, then you can work extra hours one week.
Readers, have you ever heard of Uber or Lyft? If so, do you think you’d be willing to drive for them and make some extra cash?
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