Big changes are coming to Lyft Line, and it looks like UberPOOL may follow suit! But did Lyft really come up with this rate increase for drivers, or were they spurred to do it by Uber? Senior RSG contributor Christian Perea outlines what this rate increase for Lyft Line means for drivers, and what we may expect to see from UberPOOL.
We got some good news about shared rides on July 13th when Lyft announced they would increase what they pay to drivers for Lyft Lines to match the pay for Lyft Classic. In the past, Lyft drivers actually earned less per mile and per minute on Lyft Line rides than they did on regular Lyft rides.
But now, Lyft drivers will get paid based on of the same rate card as Lyft Classic. This move is significant because it’s the first time ever that a rideshare company has announced a nationwide price increase for drivers (even if it’s just limited to Lyft Line).
A Quick History Of Line/POOL Pricing
In December of 2015, Uber started paying drivers less per minute and mile on UberPOOL rides. This seemed like an attempt to make shared rides profitable and to widen their “spread” on each ride. Lyft then followed suit in February of 2016 by matching Uber’s pay rates for Lyft Line rides. Both companies still claimed that drivers would make more money on them because “the more passengers you get, the longer you drive, and the more you get paid!”
So it makes sense that a year later for our 2017 driver survey that driver dissatisfaction with UberPOOL rose to 74% and 61% respectively:
Many drivers already deeply resented the idea of shared rides before the rate cards were separated because they had to do a lot of extra work to pickup and coordinate between 2 or 3 passengers in a single ride. After the price cuts, many drivers (like myself) stopped giving POOL/Line rides unless we were trying to hit a Quest or Power Driver Bonus.
Related Article: 7 Reasons I hate UberPOOL & Lyft Line
Lyft Line Pay Is Now Better Than UberPOOL
John Zimmer (President and Co-founder of Lyft) announced on 7/13 that they would be increasing rates for time and distance on Lyft Line rides nationwide to match Lyft Classic. Drivers will no longer receive less pay for doing more work on a Lyft Line.
This may not seem like a huge increase at first, but it actually adds up to a lot more than you think. If your rate for Line was $0.85/mile before, and now your rate is $0.95/mile, that’s more than a 11.77% raise in gross income for Lyft Line. It’s much more once you factor in your profits.
Now we have a higher incentive to do Line rides that get matched in order to extend the time and distance of the route and thus earn more. If you are lucky enough to live in a city where Lyft still has a Power Driver bonus or bonus program that rewards for the number of rides you do, then that’s even better.
I don’t think this is a pay raise for drivers so much as it removes the insult and negativity of doing rides which require much more work yet rewarded us with less pay in the process. Previously, when I got a Lyft Line request my reaction involved many four-lettered words…
When I drove last week, I didn’t cringe at the sight of a purple Lyft Line request. I accepted it and actually made OK money from both of the rides that got matched. It made driving more enjoyable because I was less stressed about avoiding Lyft Line requests.
But Who Shot First?
All of this makes Lyft look pretty good right? Well it turns out that Uber actually started piloting the very same program in Los Angeles about a week earlier than Lyft announced this… and it actually pays more than what Lyft pays its drivers for Lyft Line to boot!
Lyft may have even seen this pilot and decided to strike first.
UberPOOL Earnings Pilot (Los Angeles)
A week earlier than Lyft’s announcement, Uber quietly rolled out a pilot program for a new pay model in Los Angeles for UberPOOL. Uber selected a group of drivers at random to see if this new pay model will result in more reliable UberPOOL service for riders (who are often cancelled on because UberPOOL sucks).
Drivers on the lucky side of the A/B test will receive the same rates of pay for UberPOOL as they do for UberX but also an additional $0.56 cents per passenger. From what I can tell so far, Uber is testing this for 8 weeks before they decide whether or not to roll it out elsewhere. This might be presented as part of the “180 Days of Change” program that Uber is pursuing.
What Just Happened?
If I’m correct in Lyft jumping the gun on raising Lyft Line rates, then this is one of the first times in the 4 year price war that a company has actually raised rates before the other in order to keep more drivers on their platform.
I don’t think this signals the beginning of a price war to get more money for drivers as much as I think Uber and Lyft have noticed a steep decline in the reliability and the vast driver dissatisfaction of Lyft Line and UberPOOL. I also think that the general driver hate toward shared rides spilled over to passengers who also ended up finding the service unreliable and generally miserable.
At the end of the day the experience became bad enough for passengers to stop using POOL and Line and both companies realized they needed to do some things to fix that. I don’t know if this will be enough since rates are still very low. However, it’s something and I’m glad to see some movement in the right direction.
Have you noticed Lyft Line rate increases in your city? What do you think of these changes for Lyft and (hopefully nationwide) Uber?
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-Christian @ RSG