Every time you use an app to book a ride, order food for delivery, or arrange care for your beloved pets, you contribute to the rapidly growing gig economy. Nearly one in three gig workers in the U.S. believe they will always need a side hustle to make ends meet. Gig work helps fill crucial affordability gaps for millions of Americans.
What percentage of the U.S. workforce is involved in the gig economy? According to the Gig Economy Data Hub, between 25% and 43% of workers have engaged in non-standard work, equating to about 42 million people. How big is the gig economy overall? Fortune reports that by 2027, half of the workforce in developed countries will be part of the gig economy. This shift is driven by factors such as technological advancements, corporate cost-cutting, and a growing desire among younger people to carve their own paths while distrusting traditional systems.
While gig apps provide much-needed alternative opportunities, some are far more generous with payouts than others. To help those interested in pursuing gig work make informed decisions, the team at LLC Attorney has created this guide to pay rates and the percentages taken by popular side-gig apps in the United States:
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The best side gig apps seamlessly fit into your lifestyle while providing value for your time and effort. Let's break down some common questions about side-gig apps to help you identify the right opportunity for you.
Which Pays More, Uber or Lyft?
Uber versus Lyft pay is a complex comparison that depends heavily on your location, the time of day, your driving strategy, and the promotions available. Some data and driver experiences suggest that Uber's per-mile base rate is generally higher. However, Lyft often offsets this difference with better bonuses and guarantees. Researching and testing your local market is essential when deciding whether to drive for Uber or Lyft. Additionally, using both apps at various times and locations may help you maximize your rideshare driver profit.
How Much Does Uber Take From Drivers?
What percentage does Uber take? Uber's cut, or "take rate," varies significantly, typically ranging from 25–30% and may reach 30–40% for low-fare rides, where lower profit margins are needed to cover fees. Do Uber drivers receive all of their tips? Yes, Uber and Uber Eats drivers receive 100% of customer tips, with no service fees, whether tips are given in cash or through the app.
How Much Does Lyft Take From Drivers?
What percentage does Lyft take? Lyft's commission is similar to Uber's, ranging from 25 to 30%, and can sometimes exceed that range due to factors like trip length and external fees. In early 2024, Lyft announced an earnings commitment that "guarantees that a driver's weekly earnings will be at least 70% of passenger payments after external fees." Later in 2024, the Federal Trade Commission announced it was taking action against Lyft for deceptive earnings claims, leading Lyft to agree to a $2.1 million settlement. While average Lyft earnings may be contentious, 100% of tips go to drivers, emphasizing the importance of tipping.
How Much Does DoorDash Take From Dashers?
Instead of a fixed percentage, DoorDash allows Dashers to choose to earn by offer (based on the time, distance, and desirability of the order) or by time (which guarantees a minimum hourly rate while they are active with deliveries).
How much do Dashers make on average? DoorDash's base pay ranges from $2 to $10 per delivery, though it can be higher. Additional earnings can come from promotions like peak pay periods, challenges, delivery streaks, and boosts. The Glassdoor median salary for DoorDash drivers is about $20 per hour, but this varies widely by location and demand.
Do delivery drivers receive 100% of tips? Yes, all of the rideshare and delivery apps we analyzed confirm that workers receive the full amount of their tips, whether given in cash or through the app. However, it's important to remember that tips are taxable, even if they are not recorded in your official earnings documentation.
Driving and delivery are just a couple of the side gigs available through apps. If you are creative, love animals, have a good eye for fashion, or have a space you can share, there may be additional opportunities to earn extra income.
What Percentage Does Etsy Take?
Etsy's take rate is 6.5% of the total sale amount, including shipping. There is a $0.20 listing fee per item, along with a payment processing fee of around 3% plus $0.25 in the United States. Altogether, Etsy's total fees come to just under 10%. If a sale is made through an advertisement, Etsy also charges 15% for sellers earning under $10,000 a year and 12% for those making more than that.
What Percentage Does Poshmark Take?
Poshmark has a straightforward fee structure: a 20% fee on sales of $15 or more, and a flat $2.95 fee on sales under $15. Overall, you retain about 80% of the sale price for your items.
Which Pays More, Rover or Wag?
Rover's cut is 20%, while Wag takes 40%, so you keep double the earnings from Rover gigs. However, it may take time to build reviews and establish a stable client base on Rover, making it a better long-term strategy. On the other hand, Wag is ideal for flexible, on-demand dog walking, making it easier for newcomers to find jobs quickly.
How Much Does Airbnb Take From Hosts?
Airbnb offers two fee structures: split fee and single fee.
Under the split-fee structure, a 3% host fee is deducted from your payout. Guests also pay a service fee of 14.1% to 16.5% of the listing price, so they see and pay a different total than what you set.
Alternatively, the single-fee structure applies a single service fee, typically 14% to 16%, which is deducted from your payout. In this case, the host covers the entire fee charged by Airbnb. The single-fee structure is mandatory for traditional hospitality listings, such as hotels and serviced apartments.
Why It Matters to LLC Attorney
At LLC Attorney, we are dedicated to providing a solid legal foundation for ambitious individuals, enabling them to pursue their dreams with confidence, clarity, and peace of mind. Many of the entrepreneurs who have formed an LLC with us began their journeys toward freedom and financial security through side hustles. They built the skills, knowledge, and determination to succeed before launching their own self-made endeavors.
While the growing freelance economy offers many benefits, it also carries risks for those who are not connected to a traditional business structure. Establishing a Freelance LLC for your business or any other entrepreneurial entity can help mitigate many of these potential pitfalls. An LLC not only provides limited liability protection but also enhances your business's credibility and online presence. Additionally, it offers tax flexibility and facilitates easier scalability as your business grows.