How Ridesharing Works 5/5 (1) 5 min read

how ridesharing apps work
(Last Updated On: December 8, 2017)

I find that the simple way to explain how ridesharing works is the best.

Each rider has a ridesharing app installed (such as Uber or Lyft) that they can use to request a ride. Once they request a ride, the riders are offered one of the nearby, on-duty drivers, along with his/her rating by other riders. The drivers have a counterpart, driver ridesharing app. After they receive the ride request, along with the rider’s rating by other drivers, they have a few seconds to accept it. If the driver takes the ride, she/he is given the rider’s pick up location and start driving towards it.

The driver picks up the rider and is given the drop off location only after she/he confirms that the rider is in the car. I suspect that this is done for a few reasons:
so the driver cannot reject ride requests that he might see as less than desirable (such as short rides, rides away from a specific area, rides towards an area with fewer riders or an ill-reputed area). While I cannot blame anyone for not wanting to go to an unsafe area for a few bucks (and wish that drivers would be given a choice, especially after dusk), every rider needs to be treated fairly, no matter how short their trip or where the drop off location is.
so the drop off location is kept private, in the case that the driver does not pick up the rider, for any reason.

The driver starts driving towards the drop off point.
For Uber Pool or Lyft Line rides, other riders might be picked up and dropped off before the first rider is taken to his/her destination. These type of rides are cheaper for riders and should be more lucrative for drivers. The ridesharing platforms automatically determine the routes and the pickup/drop off order of the riders.

Once a rider is dropped off, his linked account is charged, and the rider is paid the amount he is owed according to each ridesharing app’s commission or payment schedule. Both driver and rider are given the opportunity to rate each other. Riders also can tip the driver (I have found Lyft riders to be better tippers than Uber riders – my thanks to Lyft’s marketing department).

How Ridesharing Works

Ridesharing Rules And Fees

Because these fees are adjusted constantly and vary with location, please use this information just to get an idea of what you might get charged for (or what you might get paid as a driver). Actual amounts may vary.


Both Uber and Lyft pay 100% of the tips to the driver. I find this to be a refreshing change compared to a lot of Chicago limo and party bus companies that used to charge tips upfront (under the pretext that they will forward it to the driver) and keep it for themselves.

Cleaning & Damage Fees

Uber charges cleaning fees between $20 and $150, based on how big the affected area is and how hard it is to clean it up. The damage fee charged by Uber is up to $250. The driver has to submit pictures of the damage or of the area that needs to be cleaned and a description of the incident. 100% of the fee goes to the driver.

Lyft charges a fee up to $250 that applies both to cleaning and damage. 100% of the fee goes to the driver.
Given a choice, I would rather stay away from cleaning messes or repairing damage, money or no money. My family also uses my ridesharing vehicle, so I need to keep it clean and in good shape. For that reason, I kindly and respectfully tell riders eating is not permitted inside the vehicle. Drunk riders cause trouble most often than not. I am not going to tell you how to handle a drunk rider, because every situation is different. Just keep in mind that they pose a bigger safety risk (including their own safety), so act accordingly.

Airport Fees

For airport drop-offs or pick-ups, both Uber and Lyft charge the rider a fee that is passed 100% to the authorities.

Ridesharing Cancellation Fees

Uber charges the rider a cancellation fee between $2 and $10 for the following reasons:

  • rider cancels the ride 2 minutes or more after requesting it.
  • rider cancels a Pool ride at any time after the driver accepted it
  • rider does not show up at the pick up location within 5 minutes of the driver’s arrival
  • rider does not show up at the pick up location within 2 minutes of the driver’s arrival for a Pool ride

Lyft charges the rider a fee between $5-$10 for the following reasons:


  • rider cancels the ride 5 minutes or more after requesting it AND the driver is no more than 5 minutes late than the original ETA
  • rider does not show up at the pick up location within 5 minutes of the driver’s arrival AND after the driver has tried to contact the rider
  • rider cancels a Lyft Line request at any time after the driver requested it
  • rider cancels a scheduled ride within 30 minutes of the pick up time. The fee for such a cancellation is $10

Base Fare

Both Uber and Lyft have a base fee that is usually around $1-$2 (give or take a few cents) and that varies based on location.

Other Ridesharing Fees

Both Uber and Lyft have other fees that may apply depending on the ride type, location, time and other factors. Click here to see Lyft and Uber compared.

Please rate this

How Ridesharing Works
Article Name
How Ridesharing Works
How ridesharing works - a simple guide for new riders and new Uber or Lyft drivers.
Publisher Name
Driver Income
Publisher Logo