Monday, February 04, 2019
Are Lyft's Earning Claims for Drivers Deceptive?
With all the bad publicity Uber has received recently, Lyft is trying to position themselves with the public as a better option and a good citizen in the techie community. They claim all over the internet that a driver can make up to $35 an hour/$1500 a week, which sounds great, but is this claim too good to be true? I decided to find out!
To begin my adventure, I signed up and ultimately chose to use their new "Express Drive program." where a rental car is provided for a fee. To calculate what the costs would be if I used my own vehicle, I employed a tool called MileIQ to track the amount of mileage incurred and estimate what the wear and tear on a personal vehicle would be.
I then carefully read all their tutorials on how to maximize the amount of money I would make and made an appointment to pick up the vehicle via the Lyft App from Hertz at a local Pep Boys. Please note, I tried to call this car rental center over 10 times to clarify some items and no one ever answered the telephone. After making the appointment, I received daily text messages and emails reminding me to pick up the vehicle on the time/date specified.
Upon my arrival, a male wearing gym shorts and a tee shirt gruffly informed me that it was his lunch time and I would have to wait for an hour for him to return. When I told him, I had an appointment, he said the computer made a mistake and that wasn't his problem. He then got into an SUV with Lyft decals on the side and left with a male and a female. I later discovered the other two people were the Hertz employees dedicated to the Lyft Express Drive Program.
During the hour-plus he was gone, numerous drivers showed up trying to find someone because they were having issues and couldn't get anyone to answer the phone. Several of them also told me that they had made numerous calls and never got an answer.
When they returned, the male in the tee shirt and shorts (who I later identified as a contract employee for Lyft) had me watch a video and directed me to the Hertz employees. One of them took me to a Mazda with approximately 75,000 miles on it to do an inspection. The car was filthy inside and out, had cigarette ashes everywhere, and had dings all around the exterior. Having just read the paperwork threatening me with a "large fine" if I smoked in the car, I voiced concern and was told that this was being documented and not to worry about it. I was then told I would be given a self-service car wash coupon to clean the car.
I have rented cars many times for a week that were much newer and "clean" for about the same price when traveling on business or having service performed on one of my personal vehicles. My guess is the cars Lyft provides are originally regular Hertz rentals that did not sell on their used car lots.
Lyft does claim to eat the approximately $180 plus taxes a week fee if you give 85 (partial) or 105 rides (total) in a week -- but based on my overall experience and speaking to drivers -- this is unrealistic unless you work an excessive amount of hours. Please note that you also have to maintain a 90 percent acceptance rate to get this benefit, which is explained below.
We then returned to the Hertz counter and computer issues ensued causing further delay. After about three hours, I was ready to begin my "Lyft Adventure" with a filthy, smelly car and headed to the car wash. After cleaning the car myself and going home to take a shower, I was finally ready to start making money.
The first thing I noticed was the substandard navigation on Lyft Driver App (run by GoogleMaps). Frequently, it would tell me to turn at a street/exit, I had already passed. Throughout the week, I noticed it sending me in crazy loops that made no sense considering the location of the customer. In many areas, it got street names wrong, and on more than one occasion it sent me several miles out of the way before telling me to turn around and go back to where I came from. Since the customer sees the driver going all over the place on their Lyft Customer App, this causes some frustration on their part, and they blame the driver.
The next thing I noticed is how the rides are accepted. When Lyft sends you a ride request, the phone lights up and prompts you to accept it. To accept the ride, you tap on your phone and the navigation takes over. The customers are all supposed to have pictures, but many do not. Lyft's instruction is to follow their navigation and you have no idea what the ultimate destination is going to be until you are about ready to arrive. I found that sometimes, the destinations were in high crime areas, which might be a safety concern for some drivers.
Another thing I noticed is that the app literally hijacks your phone and it is very difficult to use other apps after opening it up. The main screen displays the Lyft purple ball after logging on -- and on several occasions -- it logged me on again after logging out and it accepted rides. Once, this happened when the phone was being charged in another room.
It also opened my contacts and pinned them to the main screen. I later discovered (hidden in the fine print) that I had agreed to give them access to my contacts, which they claim is to spread "Lyft Love" to everyone listed in there. Please note that a lot of malicious code does the same thing when trying to compromise a system.
You are rated based on your acceptance rate and when the phone lights up there is no sound prompt. This means you have to constantly keep an eye on the phone, which is a driving distraction and could be dangerous. It also doesn't help when the app accepts rides after you think you have logged out.
Failure to maintain a 90 percent acceptance rate also prevents you from hitting any offered bonuses, and can even get you deactivated (geek for getting fired). Based on the chatter on numerous internet forums, few if any people, ever hit the parameters to achieve a bonus.
The next interesting thing is their rating system. At the end of each ride, both the rider and driver rate each other from 5 to 1 (5 being the best). If a driver falls below a 4.8, they start getting messages that they are at risk of being deactivated. In the week, I drove I picked up some pretty interesting people. Many were intoxicated and some were downright scary. Some of them spilled items in the car and or left their trash in it. Often I would arrive to pick one person up and four or five people would pile in the car. Frequently these groups were intoxicated and so rowdy that it was difficult to hear the navigation. I did meet many very nice people, but you literally have no choice who you pick up if you want to maintain an acceptable rating.
I even got a homeless person and a woman, who blatantly told me she was an escort using Lyft to drive her to a client. One or two 4 ratings will knock your overall rating down and if an intoxicated person gives you a 1, it will be pretty hard to recover. In my humble opinion, this rating system is a tool used to intimidate the drivers into not saying anything to a customer when they are clearly acting in an unacceptable manner. Of course, drivers are expendable and easily replaced with fresh people responding to the "up to $35 an hour/$1500 a week come-ons."
I ended the week with a 4.7 rating, which in any other arena would be "darned good," especially considering the challenging aspects faced when providing this service. Despite this, 4.7 is considered as a "needs improvement" by Lyft.
On my third day, I got a "snippy e-mail" telling me I got a complaint that the car smelled of smoke. The customer related they had asthma, which made the ride difficult. Considering the condition of the car when I got it, I guess the smoke smell lingered on after I cleaned it inside and out. I promptly cleaned and washed the car again, purchasing a fairly expensive product to remove the smoke smell. I then emailed Lyft about this because I felt bad about what the customer had experienced. Prior to this, they had always answered right away, but this time they did not and despite daily follow-ups, they never did.
Lyft does show power zones on the navigation map, which light up in shades of red. They recommend that you go to these zones to maximize your earnings. These zones are where they claim they need drivers and are charging them higher fares (referred to as prime time). My experience with the power zones was that I would drive towards them, and they would disappear right before I got there. I also noticed that they tended to light up when I was headed home, which seemed to be a strange coincidence. On the few times, I made it to the red zone in time, I either got no business or a $3 to $6 dollar fare. The end result was a lot more gas and carbon gasses expended with no return on investment.
Please note that the reason for this could be that so many drivers are on the road trying to make $35 an hour, it has caused the market to become over saturated. There is very little doubt that they are engaged in a price war with Uber in an attempt to gain market share and that this is cutting into the amount being made by the drivers.
So far as making money, there were a few times I got busy, but there were also times where I would drive for up to two hours with no business. There were also many times when all I would get were $3 to $8 dollar rides at the rate of about one an hour (despite following all the revenue-enhancing tips provided by Lyft). Please note that these fares are the amount before Lyft took their 25 percent cut.
When in "driver mode," the app shows your earnings and details them by the ride. The earnings being displayed are before Lyft takes their cut. This tends to make the driver think they are making more money than they actually are.
Lyft advertises that they let the driver keep the tips, but few customers actually tip. I averaged about 7 percent in tips for the week.
Lyft does provide insurance while you are logged into the app, but it has a $2500 deductible. Your primary insurance will probably have to take over if an accident occurs and it is possible you will be dropped by your insurance carrier if they discover you were driving for Lyft. Consumer Affairs published a telling article detailing this risk and potential liability.
Towards the end of the week, I started getting hit with numerous messages via text and email to renew my rental. These messages confused me as to what day it was due back and I reached out to Lyft Support for a clarification. Here again, despite several follow-ups, they never answered me until a day after the vehicle had already been returned. When returning the car, I asked the Lyft employees if there was a number I could call and they told me that one does not exist.
Now for the money, I was able to make. Listed below is the summary provided by Lyft. The rental was prorated (normal cost is $180 a week) because I picked up the car a day into the pay cycle. It doesn't include gas cost, car washes, or my time cleaning the car because of the condition it was in. Also not included is the three hours to pick up the car, or the hour it took to return it.
54 Rides and logged into the Driver App for 45h 16m 57s
Ride Payments: $510.57
Lyft Fees: -$127.72
Rental Fees: -$154.28
Rental Tax: -$12.86
Total Earnings: $250.72
I made $250.71, and after taking the $132 in gas/miscellaneous expenses out, I netted a whopping $118 for 45 hours work. This equates to $2.62 without taking into account overtime and would have been close to the minimum wage in the '70s. On the other hand, Lyft made $127.72 plus whatever they and Hertz made on the rental.
I calculated the miles, which if recorded could be written off in taxes on a personal vehicle, but also represent wear and tear. There are tales in the forums of drivers wearing out vehicles before they were paid off. I drove 917 miles for the week, which at the federal mileage rate of 53.5 cents a mile equates to $490.60 (rounded up). Please note the federal mileage rate is an official calculation of what wear and tear represents.
This amounts to 50,440 miles driven a year if the driver (who gets no vacation time) drives every week. If you subtract the $490.60 from what I made, I would have been operating at a net loss. Of course, these are all estimates, but estimates based on factual data.
I wonder how many financial losses are incurred by the auto industry when a car wears out and the person can no longer afford to make the payments?
Lyft advertises all over the Internet that a driver can make up to $35 an hour/$1500 a week. While this sounds like a great opportunity, the truth is a far different story, and Lyft is laughing all the way to the bank at the expense of their easily replaced drivers.
The drivers receive no benefits, and many of them are making a lot less than minimum wage when all things are considered. I discovered by speaking to several drivers that some of them work up to 14 hours a day/7 days a week) trying to make ends meet. I was told several times that if I wanted to make money, I would have to drive to San Francisco (4 hour round trip) and put in some long shifts.
Lyft does regulate the number of hours a driver can be on the road and there are differences in some jurisdictions, but for the most part, they allow 14 hours a day with at least a 6-hour break. There does not appear to be any limit on how many days a driver can work in a row. Of course, they are not paying overtime since the drivers are considered to be self-contractors, either.
One could make a pervasive argument that Lyft is creating a potentially dangerous situation for everyone on the road, and creating a lot of unnecessary carbon gasses in their quest for easy money and market domination.
There have been recent legal efforts to have rideshare drivers classified as employees. This would go a long way to creating a level playing field for the competition that is being run out of business by outfits like Lyft and Uber. It would also go a long way towards preventing these outfits from creating an abusive atmosphere for their drivers.
The truth is their drivers provide all the fixed costs (vehicles, gas, cell phone, time etc.) and Lyft collects 25 percent of the earnings with a computer application that maintains command and control of the driver. Because they pass on their costs of doing business and are paying no benefits, it is no wonder that they have run the competition out of business. With no benefits being paid, the taxpaying public is also probably picking up the costs of providing them to their drivers.
It is also no secret that both Lyft and Uber and pursuing the driverless car option. Will this lead to them replacing their drivers, in the same manner, they have replaced traditional transportation outfits? The sad thing is that the drivers are providing all the fixed costs of pursuing this goal and will eventually be replaced by a machine.
If most businesses were able to operate in this manner, they would probably be shut down by the government for gross violations of labor laws and essential human rights.
On a closing note, here is a list of political donations given by Lyft employees. I was shocked to discover that most of the recipients claim to be social justice warriors. Recipients include Bernie Sanders, the DNC, Hillary Clinton, Kamala Harris, and Jill Stein, They also gave a $1,000,000 donation to the ACLU to fight President Trump's immigration ban. This ban essentially blocked people from countries with no functioning government from entering the country. The Obama administration was the one who designated these countries as dangerous because of a lack of effective government and ties to terrorism.
Doesn't the first initial of the ACLU stand for American? Perhaps they and Lyft should revamp their efforts to prevent abuse to human beings in this country instead of pursuing an agenda that could be dangerous to our citizens.