Here’s the Ridesharing Service You Should Choose

By now, you probably know the gist of driving with ride-sharing services: You use an app to connect with people who need rides. You drive them somewhere in your own car, and they pay automatically through the app.

The two biggest players in the space — Uber and Lyft — continue an intense rivalry, despite offering pretty much the same service and neither riders nor drivers usually knowing why they choose one or the other.

If you’re thinking about joining the ranks of rideshare drivers, you might be choosing blindly.

Could you lose money with the wrong choice?

To help you figure out what’s best for you, we’ll compare the similarities and key differences between Uber and Lyft to help you determine which is best for drivers.

Lyft vs. Uber: What Both Apps Offer Drivers

Interested drivers can sign up to work with Uber or Lyft through their apps.  Sharon Steinmann / The Penny Hoarder

How each app works for drivers is fundamentally the same:

You can sign up to drive online or through the app.

You log in when you want to work, wait for a notification that means someone’s hailed a ride, then pick them up and drop them off at their destination.

You earn money based on how many rides you take, and you automatically get paid each week (or more often, if you choose) through direct deposit. Same for each.

Driver Requirements for Uber and Lyft

Uber Lyft
Meet min. age/city Meet age rule/region
1 year driving experience (or 3 years if you’re under 25) 1 year driving experienc
Valid U.S. driver’s license (Some states require separate license.) U.S. driver’s license
Criminal/DMV background check DMV/background checks
Proof of state residency Proof of insurance
n/a iPhone or Android phone

Vehicle requirements vary based on state or local regulations. They’re similar for both services, with a couple of notable differences.

Vehicle Requirements for Uber and Lyft

Uber Vehicle Requirements Lyft Vehicle Requirements
Meet city age rules Meet region age rules
4 doors 4 doors
5 seatbelts, including driver 5-8 seatbelts
Good condition Pass safety inspection
Proof of registration Current registration
Proof of insurance Proof of insurance
No commercial branding n/a

If you don’t have a car that meets the requirements, each company offers rental options or discounts to buy in certain cities.

If you don’t have a car that meets the requirements, each company offers rental options or discounts to buy in some cities:

  • Uber’s Vehicle Solutions lets you rent a vehicle by the hour or the week, apply for a flexible lease with unlimited mileage and payments deducted from your Uber earnings.
  • With Lyft’s Express Drive rental option, you can rent partner Lyft cars with a flexible lease and no long-term commitment.

You can even use the car you rent as your everyday car, regardless of how much you drive it with Uber or Lyft.

How Much Can You Earn With Lyft vs. Uber?

Like any other sharing-economy gig or freelance work, Uber and Lyft drivers are considered independent contractors in all 50 states as of this writing.

That means your earnings are largely based on how much you want to work and how you manage your time.

For example, this guy was earning $750 a week driving 45 to 50 hours a week with Lyft in Philadelphia.

Driver earnings for the apps are similar: Riders pay a base rate plus extra cost per minute and per mile.

As a driver, you earn based on how many rides you take, and how far you drive for each. You’ll get an earnings boost when you drive during high-demand times — like rush hour or during a local special event — called “surge pricing” with Uber and “peak hours” with Lyft.

Both Lyft and Uber offer tips, which drivers get to keep 100%.

California Gig Worker Guarantees

The state of California kicked off a push toward reclassifying rideshare drivers and delivery drivers as employees in 2020 with a state appeals court ruling followed by a reversal at the polls with the approval of Proposition 22 in November 2020.

Under Prop 22, California rideshare drivers are still contractors, but you’re guaranteed 120% of the local minimum wage per hour you’re engaged, $0.30 per mile in expenses and a health insurance stipend if you average more than 15 hours per week.

Also under Prop 22, you can’t work more than 12 hours a day without a break of at least six hours. (Lyft now sets this limit for drivers across the board, while Uber drive time limits vary by state.)

Upstate New York Uber Drivers Can Collect Unemployment

An unemployment lawsuit in upstate New York in 2021 classified rideshare Uber drivers in particular as employees for the purpose of collecting unemployment, according to the National Law Review.

The decision doesn’t apply to all of New York (it doesn’t reach New York City). It may not even apply to Lyft drivers, as the suit was solely against Uber Technologies, Inc. And its ramifications beyond unemployment aren’t clear.

Later in 2021, a statewide move for legislation that would let rideshare drivers unionize failed to pass, reaffirming drivers’ status as contractors.

Rumblings Around the Country

After small shifts in California and New York, analysts expect the push to reclassify drivers as employees to continue and spread to other states in the coming years, which could cause a seismic shift in what it means to be a rideshare driver.

New Jersey lawmakers introduced a bill in 2019 to set clear parameters on who could and couldn’t be classified as an independent contractor, mirroring the details of California’s successful AB 5. The bill appears to have stalled in committee.

The National Labor Relations Board has invited briefs to determine whether it should change its standards for classifying independent contractors versus employees which would have implications nationwide.

What Lyft Offers That Uber Doesn’t

lyft vs. uber
Rideshare services have opened up a lucrative side gig field for drivers of all ages. . Photo by Jessica Kourkounis

In 2017, Lyft expanded to 40 “full” states, meaning it lets drivers pick up anywhere in those states, not restricted to a metro area. According to Lyft, this means the platform covers more than 94% of the U.S.

Lyft also offers Amp, a nifty device that makes it easier for drivers to connect with riders at busy spots — and for drivers who are deaf or hard of hearing to stay on top of new rides

What Uber Offers That Lyft Doesn’t

lyft vs. uber
Both Uber and Lyft operate in all 50 states, which means Uber no longer has the advantage in that area. Sharon Steinmann / The Penny Hoarder

For years, Uber has had one huge advantage over Lyft: It was in more places. But now both services are available in all 50 states and in most areas within those states. 

Now Uber’s main advantage is that more riders are likely to know about it. Many people outside of coastal cities may only have heard of Lyft in the past few years as it’s expanded to their areas, and they might just prefer Uber because they knew it first.

Delivery With Uber Eats

Uber’s 2014 expansion into package and food delivery gave it a boost over Lyft for some drivers, too.

If it’s available in your city, Uber Eats gives you a way to earn money when you don’t have (or don’t want) passengers. It also has less strict requirements: The minimum age may be lower in some cities, and your car only needs two doors.

In some cities, you can even make deliveries on your bike or scooter if you don’t have a car — you only have to be 19 years old to deliver by scooter and 18 to deliver by bicycle.

Lyft Services vs. Uber Services

Depending on where you live and what you drive, you might find you’re a better fit for either Uber or Lyft because of the services available in each app. Here’s a comparison of the services riders can order through each app.

(Services vary by city, and rider limits might be reduced due to COVID-19.)

Lyft Services vs. Uber Services

Lyft App Uber app
Standard Lyft (up to 3 riders) UberX (up to 4 riders)
Lux (luxury car up to 3 riders) Uber Black (luxury car)
Lux Black (black car service up to 3 riders) n/a
Lyft XL (SUV up to 5 riders) Uber XL (up to 6 riders)
Lux Black XL (luxury SUV up to 5 riders) Uber Black SUV (luxury)
Shared (share with riders headed in same direction) Uber Pool (same as Lyft)
Priority Pickup (faster service, higher price) Uber Reserve in advance
Wait & Save (lower price, longer wait) UberX Saver (like Lyft)
Preferred (rider can request quiet and adjust vehicle temperature) Hourly (multiple stops)

Lyft or Uber Who Wins?

The bottom line is there’s probably no clear winner. Lyft versus Uber is a bit like a Mac versus PC debate. You have to pick what works for your lifestyle and finances.

Because each company offers some clear advantages, many drivers work with both in cities where both are available.

This strategy lets you maximize the riders you can connect with and earn money with less downtime. The companies don’t love competing for drivers, though, so keep an eye out for restrictions or policies that limit how easily you can switch between apps while you’re working.

Dana Sitar is a Certified Educator in Personal Finance and has been writing and editing for online audiences since 2011, covering personal finance, careers and digital media. She is a former staffer at The Penny Hoarder. Her work has appeared in the New York Times, CNBC, The Motley Fool, Inc. and more. 

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