Your business location is your resident state, all income derived from this business is taxable to your resident state. The fact that your Lyft business initiates riders from neighboring states would not necessarily require you to pay tax in that neighboring state.
Because each state has their own specific rules it's best to check with Lyft for more guidance. However, if there would be a requirement to report in each of the nonresident states, it would be the net profit (income reduced for expenses) that would be prorated for each state. You would prepare the nonresident state returns first.
Your resident state would give your credit for taxes paid to another state on the same income, eliminating double taxation. There will be a question in the resident state return about the credit. Prepare your resident state last.
