Lyft finally started charging passengers a waiting fee in December, but drivers complain that the fee isn’t in their wallets… at least not yet.
Lyft’s waiting time fee, or the charge paid by the passenger if the driver must wait for the passenger at pickup, will occur two minutes after on-time arrival for standard fares and five minutes for Black and Black XL. increase. Rates are billed by the minute.
Several US market drivers, who posted on Reddit and spoke to TechCrunch, said they have yet to see these charges reflected in their accounts. Lyft told TechCrunch the delay was unintentional and a driver of certain markets it was We actually receive those fees. Lyft says the rest should be coming in the coming weeks.
Lyft has never officially announced new wait times. The company quietly implemented them and just updated their website and never promised the money would go to drivers. Drivers annoyed to get “Gryfted”, the term used, are still not reassured.
Drivers claim rider fee increases have become the industry norm in response to macroeconomic trends. But that doesn’t necessarily mean that the extra charges were passed on to the driver.
Back in March 2022, both Lyft and Uber added temporary surcharges to rides to cover fuel costs when gasoline prices soared due to Russia’s invasion of Ukraine. In that case, all that money went to drivers who were grappling with rising gas prices. But when Lyft was struggling with higher driver insurance premiums in his October, the company pocketed the money by raising the service fee that U.S. passengers pay per ride.
Drivers who spoke to TechCrunch said they should be paid for waiting time, not Lyft, because they lose valuable money-making time every time passengers are late.
Drivers also said they expect two rival ride-hailing companies to follow similar policies. Some drivers who spoke to TechCrunch said Uber is giving drivers a waiting fee. They said it was a “penny” and in fact he said Uber only increased the grace period for late passengers from 5 minutes to 7 minutes, but that’s a lot.
Lyft told TechCrunch that in markets where it has “advance dispatch information,” drivers now receive a waiting time fee. (Prepaid rides means drivers can confirm their destination before accepting the ride. Locations where this is valid include New York City, Washington State, Portland, Toronto, and Vancouver.) All other markets are considered “prepaid” regions. Drivers in these regions will start putting wait time payments into their wallets “in the next few weeks,” Lyft spokesperson Katie Kim told TechCrunch.
Kim did not confirm whether Lyft will retroactively pay passengers for waiting times incurred in the past two months.
Lyft introduced prepayment last October, months after Uber launched a similar feature in July. This feature allows drivers to see ride information and what they can earn before accepting a ride. Both companies have been pitching drivers to pay up front as a means of increasing transparency, but some drivers say it’s just a cosmetic pay cut. Drivers who say their income has plummeted since the feature was introduced speculate that the prepaid model is actually designed as an auction. At the auction, Lyft and Uber show rides for the lowest possible price and see which drivers get them.
Some drivers have tried this system to see if they can make good use of it. Others called for massive action by drivers to refuse rides en masse until the upfront fare reflected what they considered a reasonable fare.
Both Uber and Lyft have denied accusations that prepayment is designed to offer drivers the lowest fares. The companies also say drivers earn as high as about $35 per hour worked. Please note that engagement time means time the driver is driving to pick up or drop off passengers and does not include time driving and waiting for the gig. Many drivers say this means that hours worked do not reflect actual hourly wages.
The dance of driver retention
Uber and Lyft have just emerged from a driver shortage crisis that has cost them even more.
In Q4 2022, Lyft reported that it had the most active drivers on its network in three years, with drivers spending more time driving than in Q3 2022 or Q4 2021. bottom. -19 has cost Lyft and Uber hundreds of millions of dollars in incentives, robbing them of some of their profits and sending their stocks plummeting.
Today, ride-hailing companies seem to have a little more power. It’s not for incentives that drivers keep coming back to the platform. An impending recession, combined with inflation, has made buying groceries as expensive as going out to dinner, driving drivers back to apps.
This leaves some leeway for how Lyft pays its drivers in the short term. The question is, is it worth the risk of losing a driver to his Uber in the long run?
Nicholas Corey, an analyst at Third Bridge, a global investment research firm, told TechCrunch: “Our experts point out that the Uber-Lyft duopoly will stifle both players, ultimately benefiting passengers, drivers and the rideshare industry. , the other benefits If one reduces incentives for drivers, the other benefits One player makes a dramatic shift away from market equilibrium without benefit for the other I can not do it.”
Lyft’s share price plunge after reporting earnings for the fourth quarter of 2022 is just the payoff. Lyft has lowered its first-quarter earnings guidance, partly because it expects bad weather to affect demand. But Lyft also had to cut prices slightly to “remain competitive with the industry.” By “industry,” I mean his Uber, often referred to as Lyft’s “big brother.” Uber, on the other hand, posted strong earnings and investors responded positively.
