Lyft Business Model: How Does Lyft Make Money?

Lyft offer the best taxi booking app service at customer doorstep. Know about Lyft business model, how Lyft app work and generate revenue. We offer the best lyft clone app solution for your taxi business.

It is really very difficult to imagine our life without transportation services. Ride-sharing service provides various benefits like easy booking options, no parking trouble, low carbon footprints, etc. Due to the increasing need for ride-hailing services, the global on-demand ride-sharing service market is expected to grow at 13.2% of CAGR between 2021 and 2030. The market is estimated to reach around $205.83 billion by 2030.


There are lots of taxi booking platforms including Lyft. The US-based company started its service by launching a peer-to-peer marketplace for on-demand taxi-sharing. Lyft is a well-known multimodal transportation network in Canada and the United States. The ride-sharing platform has gained huge popularity in the market encouraging others to start ride-sharing services businesses.


If you are also thinking of building an app similar to Lyft, it becomes essential for you to know how Lyft works and makes money. Read the blog on the Lyft business model to start successfully. Also, explore how does Lyft makes money and caters to the growing demand for riders in Canada and the US.


What is Lyft?

Lyft is a ride-hailing, bicycle-sharing system, car rental, and food delivery platform in the United States and selected cities in Canada. The ride-sharing platform sets fares and operates on a dynamic pricing model to make money. Lyft is the second largest taxi booking service in the US after Uber.


Success Story of Lyft to Look into!

Industry: Vehicles for hire

Founded Year: June 2012; (as Zimride)

Founders: Logan Green and John Zimmer

Headquarters: San Francisco, California, U.S.

Area served: Canada and the United States

Revenue: $4.09 billion

Number of employees: 4,453

Riders: 20.3 million active riders

Lyft driver average salary: $37,803



In 2020, Lyft launched multi-city U.S. robotaxi services with Motional. In 2022, Lyft announced an agreement to acquire PBSC Urban Solutions. In Nov 2022, the ride-sharing company announced a layoff of around 700 employees. A driver who worked with Lyft was most satisfied, more than 33% of respondents agree that they are satisfied working with the company.

Lyft Business Model: Check How the Taxi-booking Company Works?

Today most customers are searching for ways to get around. They are more likely to choose a convenient option and expect to have an enjoyable and simpler taxi booking experience. Most people including you and me are moving towards the TaaS (Transportation as a service) model.


Many taxi-sharing services cater to the increasing transportation needs of riders all around the world and Lyft is one of the top ones from them. Lyft, a ride-hailing company started offering shorter rides in cities with drivers and passengers connecting. The ride-sharing tried to foster more of a non-commercial and friendly approach to the service. The transportation platform experienced notable growth, and Lyft experienced around 31% of growth year-over-year.


One of the big parts of the company's profit from the post-COVID pandemic comes from work and vacation travel. Airport transportation services are up by 34% and lodging is up by 24%. The company has expanded in the United States, from 60 cities to 300 and going on.


The report from the Second measure shows that Lyft sales increased by 29% year over year in 2022. Moreover, the average sales per customer for the company in 2022 was around $77, this shows 18% growth from the previous year and a 54% increase from two years ago.


Lyft is a successful taxi-sharing giant that has gained popularity among lots of people due to its impressive services. It's a successful taxi-hailing giant because it offers impressive services to its users. 


Lyft is popular among a wider customer base in Canada, the US, and cities countries. Looking to the growing popularity of the transportation company if you are thinking of building your own ride-hailing platform similar to Lyft. Then it becomes crucial for you to explore a Lyft business model to have complete insight into the operational approach.


Value Propositions

Every business owner can gain success in a competitive market by addressing stakeholders' problems. The main stakeholders of Lyft are drivers and riders. The Lyft business model emphasizes problem-solving to ensure a seamless experience offered to each rider.  


How Does Lyft Work to Offer Seamless Experience?

Lyft is an online taxi-booking platform that has gained huge popularity since its launch in 2012. The company serves approximately 1 million rides in a day. The ride-sharing company covers almost 40% of the aggregate market in almost all cities including San Francisco, Austin, etc.


4-Step Lyft Business Model to Look into

The on-demand transportation platform enables riders to hire a taxi with a single click on their smart device. They just need to follow the below steps to rent a cab to travel from one place to another. These includes:


Step 1: Riders search and request a ride

Step 2: Drivers nearby will be notified about the rider's request

Step 3: The driver reaches the location to offer the riding service

Step 4: After reaching the destination, riders can make payments and rate the driver and their service as per their experience gained.


How Lyft Benefits Riders?

  • Lyft enables riders to find nearby taxi services without waiting for them.
  • The taxi-hailing platform provides free rides and special discounts on different occasions.
  • Lyft offers riders a friendly environment, making them feel engaged and special.
  • Ride-hailing services are affordable for every rider.
  • Lyft's tagline is "Improving people's lives with the world's best transportation."


How Lyft Benefits Drivers?

  • Lyft helps drivers to earn extra money by offering their services.
  • The flexible working schedule for drivers.
  • Lyft pays around 20% to the riders.
  • People who love driving can join the ride-hailing service platform to earn money.


Lyft Revenue Model: How Does Lyft Make Money?

The ride-sharing platform is giving tough competition to other taxi-hailing business owners. Lyft is trying to improve its service to make itself stand out in the market. A cab aggregator enables riders to hire taxis with a few clicks on their smartphone. The impressive Lyft business model and its revenue strategy help the company to make great money.


Every transaction happening on the taxi-hailing platform is divided between the company and the drivers. Lyft keeps around 20% of the cut from the total amount paid by riders and the rest goes to drivers' pockets. There are many other ways that help you find an answer to query how does Lyft make money. Let’s look into them.  


Taxi Ride Charges

Lyft charges around 20% for each transaction that takes place through the platform. The five-seater vehicle comes under the normal category. Drivers get almost 80% of the cost that is paid by passengers. 


Surge Pricing

Just as Uber charges surge prices from passengers, Lyft also charges extra costs. The ride-hailing heat maps help to define the area where there is great demand. The high price is charged for areas where there is high demand. The heat maps are time and location-specific. 


Lyft Plus

Cabs that have more than six seaters and cost more compared to standard services come under Lyft Plus. To provide riders with other options for five-seaters, Lyft has launched plus. The charges for Lyft Plus are quite higher and help the company to make a good profit. 


Lyft Premier

To cater to the requirements for luxury rides, the transportation company has launched Lyft Premier which enables riders to book cars including Mercedes, Audi, etc. It is considered one of the costlier alternatives. 


Lyft Line 

Riders will be paired with Line drivers who are traveling in the same way. To promote car share and provide options to those who don't wish to hire independent taxis, the ride-hailing company launched "Lyft Line". Just like the name suggests, it allows users to share a taxi with others on a pre-specified route. It's the right alternative to public transport. 


MultiModal Strategy

In the beginning, Lyft has fewer options to provide users with customization. The transportation company provides wider services to riders on their demand, this acts as an additional source of revenue. 


The taxi company is growing its service, and Lyft has become a one-stop multimode app that provides different services in US cities. Besides, the company provides services like bike renting, scooter sharing, etc. Multimodel Lyft framework includes:

  • Public Transit
  • Bikes and Scooters
  • Autonomous Vehicles
  • Ridesharing Marketplace


There are lots of ways that help Lyft to make money. As millions of rides occur on the platform, helping the company to make lots of profits.  


What is the Difference Between the Lyft Uber Business Model?

According to Insider Intelligence, 74% of taxi-sharing users in the US choose Uber, compared to 54% who choose Lyft. But as Lyft is growing steadily, its share in the market is also growing steadily. It is estimated that by 2023, Lyft's share is projected to grow and reach around 59%, this shows only 13% points less compared to Uber. 


Lyft Vs Uber is a quite hot topic these days, as both taxi-hailing giants have gained their position in the market. Many think that Uber and Lyft are similar as they serve the same vertical and serve the audience in the same manner. If you are one among them, then remember that both companies are quite different. There are lots of aspects that make both taxi-hailing platforms different from one another. Let's check the differences between Lyft and Uber here. 



  • Passengers can sit in the front or back seat. 
  • You can see a pink sign on the grill and users can spot the same on the car. 
  • The company says that car drivers are riders' friends. 
  • Riders can easily give tips to Lyft drivers. 
  • Lyft provides its taxi-hailing service in the USA. 



  • Riders can see the Uber logo sticker on the front side of Uber's car windshield. 
  • Uber drivers drive for the rider when they book taxis from the company. 
  • The company doesn't allow passengers to tip the driver on the platform. 
  • Besides the USA, Uber provides its service in 67 countries. 


Want to Build an App Like Lyft?

Anyone who wants to enjoy a ride on Lyft has made the right decision. The taxi-sharing platform is more friendly and provides more professional services to its riders. The company is gaining popularity among riders, helping the company to make great profit in a short time. 


Understanding a Lyft business model and how does Lyft makes money can help you to launch your business similar to it. If you are looking to launch an app similar to Lyft, White Label Fox can help you with the same using our Lyft clone app. Let's discuss your project requirement today, email us at


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