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Lyft Review – How the Ride Sharing App Stacks Up to Uber

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At a Glance
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4.2 / 5
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Lyft

  • Availability: 300+ U.S. cities
  • Price Points: Lyft, Lyft Line, Lyft Plus, Lyft Lux, Lyft SUV
  • Demand Pricing: Yes; discounts during periods of low demand (Happy Hour)
  • Payment Methods: All major credit cards; in-app
  • Tipping: Voluntary, not required
  • Scheduled Rides: Yes
  • Driver Requirements: Personal and commercial auto insurance; clean criminal record; satisfactory driving record; relatively new, good-condition vehicle
  • Additional Features: Business services (employee controls, expensing, reporting, and more); driver and passenger ratings; fare estimate; itemized receipts; lost and found; city-specific promotions and discounts

Sign up for Lyft using promo code GYUTAE358731 and get $5 off your first ride.

Lyft is a popular ridesharing app – also known as a transportation network company, or TNC – that’s available in several dozen American cities. Like Uber’s similar app, Lyft lets you electronically hail cars driven by independent contractors. In practice, it functions a lot like a taxi service, although it’s far more technologically sophisticated, tends to have shorter wait times, and doesn’t directly employ any drivers (its drivers are independent contractors).

It’s easy to sign up as a rider – you just download the app and input your name, phone number, and credit card number (which Lyft saves in its system). You pay by the ride, not by the passenger, providing an incentive to share rides with other passengers. And, in a community-friendly twist, you can always round up your fare to the nearest dollar to be donated to a worthy cause.

Price Points & Services

Lyft

This is Lyft’s original service. The typical Lyft vehicle is a compact or midsize sedan with room for four adult passengers. Station wagons, minivans, and compact SUVs with room for six adult passengers or more aren’t uncommon in many places, however. Lyft claims that its classic service is cheaper than a taxi in every market served, absent Prime Time surcharges (more on that later).

Lyft Plus

Lyft Plus is specifically designed for six-passenger rides. The typical Lyft Plus vehicle is a minivan or crossover SUV with a third row. Pricing varies by market, but generally runs 25% to 75% more than standard Lyft rides.

Lyft Premier

Lyft Premier is a stylish ride with room for four to six passengers. The typical Lyft Premier vehicle is a late-model luxury sedan or crossover SUV. Pricing varies by market, but generally exceeds standard Lyft rides by 100% to 200%.

Lyft Lux

Lyft Lux is an even nicer ride: “a black car piloted by a top driver,” per Lyft. Expect to pay at least 300% more than a standard Lyft.

Lyft Lux SUV

Lyft Lux SUV vehicles are high-end SUVs with room for at least six passengers. They’re more expensive than Lyft Lux rides, though not much. As always, pricing varies by market.

Lyft Line

Lyft Line is “a shared ride [that] matches you with others going the same way, so you can split the cost,” per Lyft. The vehicle stock is comparable to standard Lyfts, as drivers freely alternate between the two price points. When they involve multiple stops, Lyft Line rides are longer and less direct than private Lyfts.

Lyft Line pricing is always fixed upfront and guaranteed to be lower than standard Lyfts, even if you don’t have to share the vehicle with anyone else. (I’ve ridden solo in a Lyft Line a few times, but I’m not sure how common the experience is overall.)

Key Features

Request a Pickup

As soon as you download the app and your information has been entered into the system, you can request a ride. You don’t need to specify your destination, and Lyft uses GPS technology (via your cell phone) to ascertain your current location. The app pairs you with a nearby driver who’s available to accept fares, notifying him or her of your location. You’re notified when a driver is on the way.

Track Your Driver

Lyft lets you track your driver while you wait to be picked up. You see a picture of the driver and their car, as well as a real-time map of their route to your location and an estimated arrival time.

Secure Payment, Fares & Fees

Lyft drivers are strictly forbidden from accepting cash payments or tips. When your ride ends, Lyft immediately bills your stored credit card or mobile wallet. Pricing and fee structure vary by city, but generally include:

  • Per-minute charges
  • Per-mile charges
  • Pickup fees or minimum charges
  • Safety and/or insurance surcharges
  • Locally imposed surcharges
  • Airport fees for rides originating and/or terminating at a commercial airport

Lyft keeps 20% of riders’ payments and passes the rest on to drivers.

Rating System

Lyft uses a five-star rating system (one for terrible, five for excellent) to grade drivers and riders. When your ride ends, you have the option of using your app to provide a driver rating. He or she can do the same for you. If you rate a driver with fewer than three stars, the app ensures that you never ride together again.

Receipt

Soon after your ride ends, Lyft emails you an itemized receipt that outlines your charges and summarizes your ride.

Discounts and Referral Bonuses

Lyft may offer city-specific promotions, including ride credits for all new riders and referral bonuses (delivered as ride credits) for existing users who refer new people to the app. Check your local Lyft branch’s Twitter feed or Facebook account for current information.

Lost and Found Feature

At the bottom of your post-ride receipt, there’s a link to report items lost in your driver’s car. You can briefly describe the item and submit, triggering an automatic text message to your driver. If the item is in your driver’s car, they can call you and arrange to meet or have the item shipped to you. Within this feature, there’s an option to tip drivers who go out of their way to return something.

Prime Time

During peak periods, such as weekday rush hours or weekend late nights, Lyft may add a Prime Time surcharge to its standard fares. The aim is to encourage more drivers to hit the road during those periods. The app clearly indicates when Prime Time is in effect, and how much extra it will cost (this varies by location and rider demand, but surcharges of more than 200% are rare in my personal experience). The surcharge functions as a gratuity, with 100% going to the driver.

Happy Hour

During off times, such as weekday overnights and weekend mornings, Lyft may offer discounted fares. The goal here is to encourage more riders to use the app and keep drivers busy. As with Prime Time, the app indicates when Happy Hour pricing is in effect and how steep the discount will be (discounts of more than 50% are rare). Drivers still get 80% of the fare. Lyft encourages tipping during Happy Hour.

Scheduled Rides

In 2016, Lyft rolled out a scheduled ride feature that lets you customize your pickup time as long as a week in advance. Before setting your pickup, tap the clock icon next to your location and choose the future 15-minute interval that works best for you.

You can cancel your scheduled ride up to 30 minutes in advance with no penalty. Cancellations within 30 minutes of your scheduled ride incur a $10 surcharge. Lyft uses a proprietary algorithm to estimate Prime Time charges at your scheduled pickup time and locks in that rate when you schedule. There’s no adjustment after the fact to reflect actual Prime Time rates, meaning there’s a decent chance you’ll pay more or less for your scheduled ride than for a contemporaneous on-demand pickup.

Business Services

Lyft’s Enterprise vertical helps businesses of all sizes organize and streamline their transportation needs. The suite’s expensing and reporting features offer ride- and employee-level granularity, and can easily scale up to accommodate special events involving non-employees. It’s also useful for businesses looking to provide alternatives to private car and public transportation commutes – a nice help for rapidly growing companies in cities with limited parking.

Driver Policies & Qualifications

Lyft requires its drivers to adhere to certain policies and meet certain qualifications:

Personal Insurance

Drivers must carry auto insurance policies, subject to their state’s minimum requirements, on the vehicle they drive for Lyft.

Additional Insurance Coverage Paid for by Lyft

Lyft pays for several insurance plans that kick in when a driver’s policy won’t cover an accident or when the cost of an accident exceeds their policy’s maximum coverage. These include:

  • A $1 million excess liability plan that covers driver liability for injuries to passengers, other drivers, and third parties
  • A $50,000 contingent comprehensive collision plan that supplement drivers’ existing comprehensive collision policies
  • A $1 million excess uninsured/underinsured motorist plan that covers injuries caused by at-fault motorists without sufficient insurance
  • A $100,000 contingent liability plan that applies when drivers have the app turned on but aren’t on their way to pick up or drop off a rider.

The first three plans apply when drivers are actively transporting or are on their way to pick up riders. Lyft’s insurance policies are subject to change over time. Check with your local Lyft team to learn more.

Driving Record Check

Drivers must be 21 or older, have had a valid license for at least 12 months, have two or fewer minor violations (such as speeding less than 20 miles per hour over the limit) in the past three years, have no major violations (such as driving on a suspended license) in three years, and have no DUIs or extreme infractions (such as hit-and-run accidents) at any time whatsoever. These restrictions are subject to change and may be superseded by local policies or regulations.

Criminal Background Check

Lyft won’t work with drivers who have been convicted of crimes that are violent, sexual, property-related, drug-related, or felonies.

Vehicle Standards

Drivers’ vehicles generally must be no more than 12 years old, though some local Lyft offices allow older vehicles. Lyft no longer requires in-person vehicle inspections for new drivers, but your state or local authorities may. Check Lyft’s state and city driver info pages for more.

Even if you aren’t required to perform an in-person inspection, your vehicle needs to meet certain Lyft-imposed quality standards. Per Lyft’s vehicle requirements page, these standards cover:

  • Vehicle age
  • Doors (four required)
  • Engine/suspension/brakes
  • Seat belts
  • Lights
  • Body
  • Tires
  • Windows
  • Wipers
  • Horn
  • Seat adjustment controls
  • Tailpipe and muffler
  • A/C and heat

Drug and Alcohol Use

Lyft doesn’t drug test its contractors, but it does enforce a zero-tolerance policy for drivers on the road. The company has a hotline you can call if you believe your driver is intoxicated.

Rating System

If a driver’s average rating drops below 4.6 stars, Lyft terminates their membership.

Advantages

Lyft has some advantages relative to Uber and traditional taxi companies:

1. High, Clear Standards for Drivers

Lyft and Uber have roughly equivalent protocols for determining a driver’s qualifications and looking into their backgrounds. However, Lyft holds its drivers to higher and clearer standards of courtesy and professionalism. The company keeps a running average of each driver’s star rating, terminating drivers who fall below the 4.6 mark. Theoretically, a driver could receive across-the-board “4” ratings from every rider and still get the ax. While this seems harsh, it also increases the chances that your driver will be awesome.

Uber also has a five-star rating system, but doesn’t impose a minimum quality threshold. Its website says, “Have partner drivers been deactivated for consistently poor ratings? You bet,” without explaining what consistently poor ratings entail or how often this occurs. In the past, Uber has been criticized for failing to take action following obvious driver misbehavior. Lyft has mostly avoided controversy.

Meanwhile, many taxi companies lack any sort of standardized rating system. Instead, you might be prompted to call a hotline or supervisor with complaints about service, which may not have any negative repercussions for the offending driver.

2. Drivers Keep More of What They Earn

Lyft drivers keep 80% of the fare you pay at all times. Under normal circumstances, Uber drivers do as well. But during busy periods, when Uber institutes so-called surge pricing, it may take more than its 20% cut – exactly how much more is unclear. Meanwhile, taxi drivers’ pay varies by location and company, but it’s unlikely that any taxi driver takes home 80% of his or her fare.

Taxi services, Uber, and Lyft all allow you to tip drivers over and above your base fare, so Lyft drivers are just as likely as their peers to benefit from additional generosity. Since Lyft drivers have the potential to earn more overall, they’re more likely to provide great service.

3. The Prime Time Surcharge Goes Directly to the Driver

Lyft clearly states that 100% of your Prime Time surcharge goes directly to drivers. Uber has a similar pricing model, called surge pricing, that increases fares during periods of peak demand. But the company makes no public mention about how the fee is used, merely stating on its website that “Uber rates increase to get more cars on the road and ensure reliability during the busiest times.” According to public statements from current and former Uber drivers, the company keeps a portion of its surge pricing surcharges for itself. Lyft claims to be the only ridesharing company that doesn’t take a cut of such surcharges.

4. Lyft’s Lost and Found Feature Is Superior

Uber’s lost and found feature isn’t as rider-friendly as Lyft’s. For instance, it doesn’t allow you to tip the driver for going out of his or her way to return the item, potentially reducing the incentive for doing so. It also requires you to initiate contact with the driver, raising the possibility that he or she could ignore your calls or texts.

Few taxi companies and independent taxi-hailing apps have a streamlined process for returning lost items. If you have the driver’s number, you can call him or her directly, or call the company’s headquarters. But it’s not common for cab riders to have individual drivers’ numbers, especially if they hailed the cab on the street. And in a dispute over the existence of an item, it’s your word against the driver’s.

5. Happy Hour Discounts Are Unique

Unlike Lyft, Uber doesn’t offer discounts during slow periods. Worse, some taxi companies may levy across-the-board night surcharges, regardless of demand. On weeknights, these could be in effect while Lyft runs Happy Hour pricing.

6. It’s Usually Cheaper Than a Taxi

Lyft’s prices vary by market, but it’s almost always cheaper than a taxi. The gap between rideshare and taxi pricing has widened in recent years, as Lyft and Uber use all but unlimited funding streams to undercut one another.

Disadvantages

1. You Can’t Call or Hail Lyft Drivers on the Street

You must hail Lyft drivers through the company’s app. You can’t call up a particular driver to request a ride or flag down a passing car. You can do both with traditional taxis, which may save time in busy urban areas. Cost notwithstanding, I personally find it quicker and easier to hail cabs in congested areas of major cities, such as Midtown Manhattan.

2. Uber Is In More Cities

Though each company’s count fluctuates as it expands into new territories, Uber currently has a foothold in more places than Lyft. In the United States, Lyft is currently in more than 200 cities, including metropolises, such as Los Angeles and Chicago, and smaller cities like Madison and Corpus Christi. Uber is in more than 600 worldwide, and many of its “cities” are actually broad regions like California’s Inland Empire.

Uber’s presence outside North America is a major differentiator too. Lyft is strictly limited to the United States and Canada, so if you’re traveling abroad, you have to go with another option.

3. Uber Has Better Coverage

Though Uber and Lyft have both dramatically expanded their coverage areas over time to the point that it’s possible to order a ride pretty much anywhere within any metropolitan region served by either company, Lyft’s coverage density still lacks in some places. I’ve had plenty of near-instantaneous Lyft pickups in my time, but the company’s average response time is (in my experience) longer than Uber’s.

4. Drivers May Not Be as Experienced as Taxi Drivers

Lyft isn’t subject to the same regulations as taxi companies, which has caused friction between it and taxi operators in some cities. Although the company subjects drivers to a criminal background check and driving record check, they don’t have to have any prior commercial driving experience – or a commercial driver’s license – to begin accepting rides.

This raises the question of whether it’s less safe to use Lyft than a traditional taxi service. Though no Lyft drivers have yet been implicated in fatal traffic accidents, a driver for Uber – which uses a similar vetting process and also doesn’t require previous commercial driving experience – was involved in a hit-and-run accident with a San Francisco pedestrian on December 31, 2013, according to ABC 7 News.

Legal Issues

The ridesharing industry remains in the early stages of development. Though Lyft is rapidly expanding to large and medium-sized U.S. cities, it hasn’t been a uniformly smooth expansion. Due to concerns over driver liability, as well as pressure from local taxi commissions, some municipal governments have resisted Lyft. For instance, in early 2014, Seattle forbade transportation network companies from contracting with more than 150 drivers apiece, though that cap has since been relaxed.

Others have taken an even harder line: Both Austin and Memphis have banned transportation network companies altogether in the past, though the general trendline has been toward broader acceptance of Lyft and Uber.

Though transportation network company policies can and do change for the better, you need to be aware of the current rules in your area. With aggressive expansion strategies, transportation network companies have been known to operate in cities where they’re formally prohibited. (For instance, during the ban, both Lyft and Uber operated in Austin, just without any official signage.) This may result in uneven service when the rules are being enforced – if word of a driver’s arrest spreads, other drivers might stay off the road.

Final Word

I had a great experience with Lyft, cutting a significant amount off a standard taxi fare and enjoying a rewarding interaction with a friendly driver. You can aspire to such an experience too – as long as you’re conscious of Lyft’s limitations. Most importantly, you need to make sure Lyft is authorized to operate in your area. Be aware of your city council’s position on the service, and think twice about using the app if it might land your driver in legal trouble. And always remember that you have alternatives – there’s no shame in using public transportation or driving yourself if it’s significantly cheaper or more convenient to do so.

Have you ever used Lyft? Would you again?

Sign up for Lyft using promo code GYUTAE358731 and get $5 off your first ride.

Verdict
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4.2 / 5
Rating

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Lyft

Lyft is quirky, fun, and easy to use. While it won’t replace your car, it may be a superior alternative to taking a taxi. And even if it’s not available in your city at the moment, its rapid expansion means that it could be soon.

The experience side of Lyft is fantastic, with great community, friendly drivers, ease of use, and shorter wait times than taxis. Limited international coverage is a big drawback for overseas travelers.

Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Brian Martucci
Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he's not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.

Comments Disclosure: The below responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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