Last fall, Lyft cut rates in just over a dozen markets. Almost a year later, they are finally rectifying the mistake, but is it too late? RSG contributor Joe Pierce covers the new/”old” rates that will take effect in all ‘pay after accept‘ markets on June 29th.
Last fall, Lyft slashed per mile rates here in Minneapolis and St. Paul by nearly 50%. Their justification was that we were going to be paid from the moment we accepted a ride.
Similar changes were made in just over a dozen medium to large-sized markets. Per my discussions with a few people from Lyft corporate, the goal of “pay after accept” was to better compensate drivers for our time.
They were also trying to incentivize drivers to accept all rides, but slashing my per mile rate by nearly 50% was not going to motivate me to accept far away requests. I honestly had no idea what data they were looking at, as I intuitively knew it would be a pay cut.
However, I decided to give the new rates a try and tracked my earnings in a spreadsheet to compare what I earned with the new rates vs what I would have earned under the old rates.
During the week, my earnings were down 5% overall and 25% on rides longer than 10 miles, a terrible experience, which would have been even worse had I accepted more long rides. I ended up declining a 30+ and a 45+ minute ride with short pickups because Lyft would have eaten my lunch on those.
The following week I began driving exclusively for Uber and haven’t given a Lyft ride since – almost a year. I can imagine a lot of quality drivers made the same decision.
My Discussions With Lyft Corporate
Around the time of the cuts, we also posted a video titled “Lyft’s Latest Rate Cut Was a Big Mistake.”
The video generated 25k views in a few days, and people at Lyft corporate actually received word of the video. They contacted me personally to discuss the rate cuts.
In my discussion with Lyft corporate, I reiterated what I stated in the video and conveyed how this was viewed as a rate cut in the eyes of drivers. They were receptive, but no action was taken.
A few months later I was contacted again to discuss the rate cuts. The person I spoke with was on the Driver Experience Team.
In that discussion, I explained why I stopped driving for Lyft and said they would have to do something substantial to regain me as a driver. Again, receptive, but no action taken.
It’s interesting that in an industry that values consultants, they wouldn’t listen to someone they had personally reached out to. Lyft also could have hired someone like Harry here at The Rideshare Guy for feedback on the ‘pay after accept’ program to get a feeling for how it would be received.
Lyft FINALLY Changes The Rates Back!!!
On June 22, I received an email with the subject “Earnings updates”. It was a communication I had been waiting for since last fall’s rate cuts.
In the email, Lyft stated, “We learned that many drivers prefer to earn on the original rates. We’ve heard you.” Yeah, you’ve heard us, almost a year later.
So ‘pay after accept’ is now completely gone and the rates go back to where they were before last fall’s cuts. Personally, my per minute rate never changed, so it stays the same at $0.208, but my per mile nearly doubles from $0.352 to $0.68.
Also, Lyft is changing cancellation pay (and I could see them rolling this policy out to all markets).
Now drivers will be paid time and distance driven to the pickup location before a cancellation happens, with minimum earnings being $2.
So for instance, if I drove 3 miles and 5 minutes to pick someone up before they canceled, based on my personal time and distance rates I would earn $3.08, not the $5 that I would have automatically earned in the past with Lyft on cancellations. I could actually see Uber implementing similar cancellation compensation.
These rate changes took effect in the following 14 markets on June 29:
- Austin
- Boise
- Charlotte
- Nashville
- Honolulu
- Kauai
- Lake Havasu City
- Las Vegas
- Madison
- Milwaukee
- Minneapolis
- Phoenix
- Raleigh-Durham
- Roswell
Too Little Too Late?
Almost a year later, Lyft? In my opinion it was ridiculous that they played with the rates the way they did in the first place. It was a big mistake (that didn’t have to happen if they had hired consultants) and again they probably lost a lot of quality drivers, but they obviously didn’t lose enough to warrant making this change sooner.
I personally am going to continue to drive exclusively for Uber. Their system is more efficient in my experience and Uber Pro, their driver rewards program, is better as well.
I am glad Lyft made this change, but they need to do a lot more to get to me back. They need to realize that they can’t just screw with the rates like they did, change it back like nothing happened, and then expect drivers to return.
I’m not exactly sure what Lyft could do to get me to return; I have been pissed at them ever since they made the changes.
One major suggestion: don’t ever mess with the rates like this again without consulting drivers first.
Another thing would be to acknowledge that what they did was really poorly planned. It’s probably a pipe dream to expect that kind of contrition, but acting like it never happened isn’t going to endear them to me. Before the cuts happened, I had been exclusive to Lyft for 3 years and had recently given my 10,000th Lyft ride. Things were really good, but then they decided to mess with my money and I’m still not over it.
What about all of you? For those of you that stopped driving for Lyft, does this change motivate you to start giving Lyft rides again? Sound off in the comments!
-Joe @ RSG
