Lyft is piloting a savings account program for drivers in Utah (exclusive)

Lyft is testing out what it’s calling a “first-of-its-kind” program for Utah drivers starting January 1 in which the rideshare giant will offer to contribute 7% of eligible drivers’ quarterly earnings into savings accounts to be used for things like benefits or cover paid time off. 

Lyft is partnering with portable benefits provider Stride for the offering, it tells Fast Company.

“We’ve been fighting against the status quo for a long time. The dichotomy between you have to be an employee or an independent contractor,” says Jeremy Bird, Lyft executive vice president of driver experience.

“If you’re an independent contractor, you can’t have benefits. If you’re an employee, you can’t have the kind of flexibility as a contractor. We think that that shouldn’t be the reality in the future. And so hopefully this helps prove that you can do both,” Bird added.

Lyft decided to attempt this savings plan in Utah after Gov. Spencer Cox signed a bill into law in March 2023 that allows companies that rely on gig workers to pay into flexible benefits packages for their workers, without having to call them employees.

At its core, SB-233 is a simple bill. It doesn’t try to cement the status of gig workers as either independent contractors or employees. Rather, it provides the ability for these gig companies to give workers more access, while the broader argument plays out at both the state and federal level.

Stride said that 36% of people in Utah have earned income, whether a lot or little, on an app-based platform.

“One of the really nice things is we’re not just making it possible to get contributions, it’s that we’re making possible to give these drivers total flexibility within a defined set of financial security driven benefits and guide them on how to set these up,” Stride CEO Noah Lang tells Fast Company.

To qualify, drivers will need to have earned the top-tier “Elite” Lyft Rewards status throughout the quarter. Drivers also have to have opened a Strive Save account.

After that, Lyft will deposit 7% of a driver’s earnings from the previous quarter, excluding tips, into that account. Funds will be deposited each quarter through the remainder of the program, which lasts one year.

Lyft has been investing in a number of driver-focused initiatives in recent months in an attempt to keep drivers’ (and riders’) on-platform hours up. It’s a sweet spot to navigate: investing in drivers and customers and hoping for strong returns.

“I’m going in with a lot of optimism and belief that if we shop up in this way then we can really see a financial benefit for the overall platform and also really benefit for the overall platform but also really benefit for drivers and riders,” Bird says.

https://www.fastcompany.com/91242553/lyft-is-piloting-a-savings-account-program-for-drivers-in-utah-exclusive?partner=rss&utm_source=rss&utm_medium=feed&utm_campaign=rss+fastcompany&utm_content=rss