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Comment by bryanlarsen | Hacker News Reader

Since the driver would have had to dead head back to Chicago, if his expenses were a not unreasonable 0.50 cents per mile, the only profit the driver made was the tip.

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Worth noting, as detailed in the comments, that not only was the tip significant, but gas, tolls, and food were covered by the author.

If the driver drove 600 miles and his car got 25 miles to the gallon, at $3 a gallon his gas expenses would have only been $72. Of course there are other costs (maintenance, depreciation), but those also exists if you are just driving your car around town, and I think Uber / Lift's whole business model is based on the driver not really taking them into account. If the tip was $100, the driver would have walked away with $330 in cash after the drive - which is not bad for a 10 hour workday.

Plus it ends up making it really easy on the driver. Only one passenger to worry about vs driving around the city all day. All the longer Lyfts I've taken, the drivers seem to like them the most. I always feel bad too knowing they'd have to potentially drive back without a fare but I've never had one complain about it.

Also, as the author quotes the driver saying, "I like long trips. This could be fun.".

It's a fun story to tell, probably refreshingly different from a usual day, and it seems like he at least made a decent wage, if not as much as usual. So at worst it's a small one-day paycut for a nice memorable day.

A Lyft specific thing to take into account is that Lyft drivers get a bonus if they hit a certain number of rides per week. One long ride makes it harder to hit that goal.

$0.58 per mile is the standard IRS deduction for business use of a car, meant to fully encompass gas, maintenance, etc., which would suggest a total expected cost of about $348 if you include more than just gas.

Even worse, that deduction is very conservative. Like, 1990 Ford Escort conservative. AFAIK, the business use deduction is almost always more if you list all your expenses on a percent-business basis compared to taking the $.58/mile.

It would but it isn't a great suggestion. If you're trying to optimize costs you can beat that by a huge factor.

$0.58 per mile is about how much it costs to lease a car at $350/month and pay for gas, which is what you would do in an upper middle class job requiring lots of travel.

So if you get a new, fairly nice car every three years and use it exclusively for Lyft, you won't make any money.

If you want to make more money than zero, own your car for longer and do some of the maintenance yourself.

>So if you get a new, fairly nice car every three years and use it exclusively for Lyft, you won't make any money.

Doesn't Lyft require you to drive a fairly new, fairly nice car?

From talking to Lyft drivers, you can specify where your last ride takes you. I’ve heard of people doing that from Sacremento to SF and back.

Now can you do that from Dayton to Chicago? I’d be interested to know. You could potentially piece a trip back together with a mix of rides and deadheads.

And the experience. He considered it an adventure. Hell, I would drive John Scalzi for free. He's one of my favorite authors. John--if you ever make it out to Oahu, I'll be your personal chauffeur.

And that’s why Lyft/Uber are silly for a “job”

Variable expenses on a car you already own are nowhere near $0.50/mile. (The GSA/IRS figure includes apportioned fixed costs, which do not fully apply here, IMO.)

Why not? A Lyft vehicle will depreciate a lot faster than a normal car, and Lyft won't let you drive a junker.

A Lyft vehicle will depreciate, per mile, at nearly exactly the same rate any other car would.

Exactly, so fixed costs need to be included

$.50 is already lower than the IRS rate ($.58 this year).

It may be a little conservative, but it's not crazy. You absolutely should be computing TCO of the vehicle and amortizing that if you are driving for a service like Lyft. What fixed costs do you think don't fully apply?

Time based depreciation and registration, insurance, and property/excise tax are all fixed costs that apply whether or not the Lyft driver takes that 300 mile round trip or parks the car that day.

That argument applies to any similar business though, so while I think I get where you are coming from I don't know why you would treat Lyft specially, here.

When considering “I’m being offered $300 for a 600 mile drive; is that more profitable (and by how much) than parking the car and watching TV instead?”, you should consider only those costs that vary with usage rather than those that you’d incur anyway.

When considering “Should I buy a car to drive Lyft?”, you should consider all costs, of course.

Ok, I see where you are coming from, but as far as I can tell for the majority of cases it seems that uber/lyft drivers are effectively running small businesses (notwithstanding the PR efforts to convince people it is "on the side"). So the realistic comparison is what other earning can I do in that time, not "sit on the couch", so the TCO comes in.

Don’t you need some sort of commercial insurance if you’re driving people around for money?

The large majority of costs associated with a car are mileage not time. Somewhat less true in northern climates because of winter salt and there are some fixed costs like excise tax and (kinda sorta) insurance but it's mostly variable.

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