How to Earn Money as a Lyft Driver

Have the looming time and financial constraints of a being a business owner put the brakes on your entrepreneurial dreams? You can be your own boss and make a pretty penny driving as a Lyft driver.

Here's what you need to know about the service and how to work for Lyft.

What is Lyft?

Headquartered in San Francisco, California, Lyft is an on-demand ride-sharing service that has used technology to revolutionize the transportation industry. Through an intuitive mobile app, Lyft lets locals in 300 cities virtually hail a ride from a local driver. You can get to any address up to 60 miles away from your pick-up location. That makes Lyft a stellar transit option for short to medium-distance road trips such as your daily commute, a quick coffee run or even a trip to the airport.

How does Lyft work?

Need a ride from Lyft? As long as you live in a region that Lyft services, you can download the Lyft rider app and then use it to register an account and supply your payment details.

Once you're all set up, enter your pick-up and drop-off location. Then, request a ride with a single tap. The app will match you with a nearby driver from Lyft's network of drivers. That driver will then pick you up at your desired pick-up location and drop you off at your desired destination. The app will provide details about the driver, his or her car and his ETA so that you know exactly who to expect and when. Because Lyft charges your stored card at the end of each ride, there's no need for riders or drivers to carry cash or fuss with coins.

How do I become a driver for Lyft?

Lyft, as it exists today, depends on a fleet of paid part- or full-time drivers to transport riders to and from their destinations. If you're interested in setting your own hours and earning extra money as a driver for Lyft, head to the Lyft website and click "Driver." Enter your cell phone, and then click "Apply to Drive." The website will take you through a series of prompts to determine your eligibility. Lyft driver and car requirements include, but are not limited, to:

• Be at least 21
• Have an Android or iPhone smartphone
• Have a clean driving and criminal record
• Own a car with in-state license plates, four external door handles,¬†and at least five seat belts
• Have car insurance. You should also consider buying rideshare insurance to fill the gap in coverage between your own personal insurance policy and Lyft's commercial insurance policy for drivers

Once you're approved as a driver, you'll be able to download the Lyft driver app, turn on driving mode and accept your first ride.

What should you know about doing taxes as a Lyft driver?

Lyft drivers are considered independent contractors. Because they are not employees of Lyft, they are not entitled to Lyft employee benefits or subjected to payroll tax withholding as employees are. You will be responsible for paying federal and (if applicable) state income taxes and self-employment tax (which consists of Medicare and Social Security tax) on your net income from Lyft.

What are some tax deductions for Lyft drivers?

Being a Lyft driver means that your livelihood depends on the upkeep of your car and your phone. You can deduct these and other reasonable expenses that come with the job. The key tax deductions that Lyft drivers can claim include:

• Mileage: You can deduct the mileage you incur from driving for Lyft using either the standard mileage rate or the actual expense method that accounts for the real cost of gasoline, repairs and other car expenses.
• Phone and/or phone service costs: You can deduct the expenses you incurred for a cellular phone and/or service, but only the percentage of the costs attributable to business use. This means it's beneficial to you to use one phone exclusively or predominantly for business use.
• Parking and toll fees: You can deduct the costs associated with using paid parking lots or tollways.
• Complimentary swag: Lyft drivers who gift their riders beverages, snacks or other goodies to improve the passenger experience can deduct these costs at tax time.