Lyft drivers will start earning additional pay for extended delays and going out of their way for certain pickups, the company announced Tuesday. The change comes as part of a broader earnings update meant to entice drivers and keep them on the rideshare platform.
“If you are obsessed with drivers as customers and provide a platform that will make their experience coming to the platform, whether they’re a mom or a dad or an immigrant or entrepreneur or caregiver coming to the platform, if we can make that work for them, they’ll drive more. There’ll be better reliability for riders. Riders will come back more. The business will grow,” Lyft’s EVP of Driver Experiences Jeremy Bird said in an interview with Fast Company.
Among the biggest updates, Lyft earnings will automatically go up whenever a rider takes five minutes longer than estimated. The company said that in its pilot program, nearly 70% of drivers saw higher ride earnings. Drivers who end rides in an area that they aren’t eligible to pick up riders or are less likely to get a trip on the way back will also see additional pay factored into their upfront fare. Lyft will additionally start showing the estimated dollar per hour rate upfront for each ride, to make it easier to factor whether certain trips are worth it.
Drivers in focus groups, surveys, and roundtable discussions with Lyft said their top two concerns were that they weren’t earning enough for rides where they encounter traffic or went long distances. One new feature, the ability for drivers to stack scheduled rides, even came from a conversation Bird had with his Lyft driver a few months ago.
The rideshare firm has been working on a flurry of updates since it brought on new CEO David Risher in April 2023 who had an ambitious turnaround plan to create a more sustainable business while it trails Uber as the number two rideshare company in terms of market share.
Lyft said that driver engagement hit all-time highs in the second quarter of this year. In the second quarter, the company saw the most new drivers in any quarter since 2019 on the platform, including 34% more women and nonbinary drivers compared to the same period last year. Drivers perception of pay fairness, which Lyft said is a leading indicator of driver preference, also saw a meaningful increase since it announced that drivers would earn at least 70% of rider payments in February.
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