[Konnstann]

"On average, Lyft drivers earn over $20 per hour."

I wonder if this figure takes into account all the waiting time, or just driving time on the app. If it is the latter, then that's a pretty scummy thing to say, considering that most drivers spend less than a third of the time actually driving people to their destination, putting the actual number closer to 7.00 an hour.

[duxup]

I feel like that's like the truck driver like stories where they'd talk about driver shortages and trouble finding new drivers and then quote average pay that is for someone with 10 or 15 years experience and pay you only get at the top shippers or working direct for a big company.

[lexs]

Also does that include repairs, depreciation, insurance etc. of the car? What about fuel?

[Dirlewanger]

It doesn't. After expenses/taxes deducted, they're making less than minimum wage. To me this just shows how much financially illiterate many Americans are; zero foresight beyond the amount in their bank account at any given moment.

[asdff]

One of my lyft drivers had their car in the shop for 6 months (some dispute with the kia dealership, they assured me that their lemon lawyer would recover the car soon) and the car they were driving for lyft was a rental from enterprise. Desperate people are taking these gig jobs and it's scary how far in over their head some of them are.

[metalliqaz]

It does not.

[lr]

Not to mention that, as a contractor, they have to pay SS and Medicare payroll taxes, which total an additional 7.65%. So, that $20/hour, given the overall expenses, is probably not even equivalent to the new NYC minimum wage of $15/hour.

[fucking_tragedy]

FICA tax rate for self-employed under $128k/yr is 15.3%. Effective tax rates for self-employed workers can reach close to 50%.

[mattkrause]

50% total, or 50% marginal? There’s a world of difference between the two....

[robmaister]

One year I made around minimum wage (paying myself just barely enough to live during the early stage of a startup) and paid I think around 25% effective just for federal.

I now make a lot more than that with a W2 job as my primary source of income and my effective federal tax rate was about half of what it was that year.

IMO FICA cap should be raised significantly and the rate should be reduced. There are entry-level FAANG employees who aren't paying their full salary into it. But that's an entirely different topic.

[papln]

In a state/city with high income tax, you'll pay 13.5% social insurance tax, up to 10% state/local tax, and 10-25% Fed income tax, but you'll only hit the high end of those rates in total tax when you gross upwards of $300K/yr.

[smileysteve]

I think they meant this comparatively, as opposed to absolutely.

[rco8786]

It does not, and it should not.

[kubatyszko]

I've had rides that cost me $15 and took 45 minutes, the math does not add up at all. In fact, I commute with Lyft nearly every day and my average 40 minute ride costs somewhere around $20. Even with another ride directly like mine it's unlikely there's enough earnings within an hour to cover Lyft's fees and pay the driver $20...

[rco8786]

Why not? Figure the driver takes 10 min to pick up another passenger. That’s another 10 min worth of driving and we’ll just say it all goes to Lyft. Driver makes $20, Lyft makes $5, 10 minutes are “wasted”.

[icebraining]

Uber and Lyft are both losing money for a reason, though.

[rjf72]

The hourly rated is based on the time that the app is active. So that hourly rated would include wasted time waiting for customer, driving to pick them up, etc.