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Lyft To Cut XL And Lux Black Rates Across the Country

By June 20, 2019July 28th, 2020No Comments

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4 min read

    4 min read

    Lyft simply can’t let sleeping dogs lie. At the same time they’re asking for driver support in California against AB5, they are also busy cutting rates for drivers in markets across the country.

    Yesterday, we started hearing from dozens of readers who received an ambiguous e-mail about ‘updated rates’ from Lyft. Upon further review, it was indeed a rate cut for Lyft XL and Lyft Lux Black drivers.

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    In this article, we will look at the updated rates, where possible make comparisons to current rates, and ask the question why. Why, Lyft, are you doing this now?

    Lyft XL and Lyft Lux Black

    So far, these pay cuts are only impacting the upper end rides, such as XL and Lux Black.  Lyft XL is a ride in a vehicle that can seat up to 6 individuals.  The car may be, for example, a Chevrolet Suburban.  According to Lyft, a Lux Black ride is a“premium black car service limited to only the most luxurious makes and models.”

    The cities we’ve confirmed so far are:

    • Atlanta
    • Cleveland
    • Dallas
    • Fresno
    • Houston
    • Miami (Lux Black)
    • Orange County
    • Orlando
    • Minneapolis-St. Paul
    • Napa and Sonoma County
    • Nashville
    • Phoenix
    • Portland
    • Salt Lake City
    • San Diego
    • Tampa (actually got a rate increase!)

    We are still waiting for comment from Lyft and will update the article when we hear more.

    Rate Adjustment or Rate Cut?

    Let’s look at one of the e-mails which Lyft sent out to an RSG reader in Miami for Lyft Lux Black:

    It is interesting that Lyft is calling this an adjustment.  I guess technically it’s an adjustment, but really it’s a pay cut.  An adjustment can go up, down or stay neutral.  In order to avoid a hostile and negative reaction, Lyft is sidestepping the confrontation and calling the decrease in pay for drivers and “adjustment.”

    We heard from several readers who were confused by this wording and upon investigating, found it was actually a rate cut and they became even more irate. I’m not sure anyone is going to be happy getting an e-mail about a rate cut, but if you are going to cut rates, shouldn’t you call it that?

    How Big Is The Pay Cut?

    Thanks to one RSG reader in Fresno, we can compare the current Lyft XL rates with the new rates going into effect on June 24, 2019.

    In order to calculate the decrease, I put these numbers onto a spreadsheet:

    No wonder Lyft did not want to emphasize this pay cut.  I don’t care who you are or what you do, nobody wants a pay cut of 4-5%.  This is especially true after many of us endured a significant rate rebalance aka pay cut towards the end of last year, seeing our per mile rate dramatically cut while only seeing a minimal increase in the per minute rate.

    Driver Comment

    Our reader from Fresno shared the following comment:

    It does seem that Lyft is a bit tone deaf.  On the one hand, Lyft has again cut driver pay.  On the other hand, Lyft wants California drivers to help and advocate against AB5.  What are they thinking?

    Similar Pay Cuts In Houston

    Our reader from Houston shared the following information:

    When I throw these figures onto a spreadsheet, we see similar driver pay decreases:

    What’s Next?

    It does seem like some of these pay cuts were to match Uber’s pricing which should come as no surprise; Lyft loves to follow in Uber’s footsteps – especially when it comes to rate cuts. In their e-mail to drivers, Lyft cryptically states ‘We’re making this change to match the local rideshare rates’ and as you can see below in Houston, the new rates for Lyft XL are almost identical to Uber XL rates.

    Lyft xl rate cut houston

    So that’s all the information for now but hopefully we won’t see more cuts to Lyft classic. Either way, the news is not good.  Anytime any market sees a pay cut for drivers of any kind, it is not good for any of us.  3%, 4% or 5%, they are all bad.  These are not adjustments.  These are pay cuts.  Be safe out there.

    Drivers, what do you think about Lyft’s pay cuts for higher end rides? Were you affected and will it make you drive less, more or about the same for Lyft?

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    -Jay @ RSG

    Jay Cradeur

    Jay Cradeur

    Jay Cradeur, a graduate of the Haas School of Business at UC Berkeley, is a full-time driver with over 26,000 rides. Jay has a driver-focused podcast: Rideshare Dojo with Jay Cradeur. When Jay isn’t writing articles or making videos, he is traveling the world. You can see what Jay is up to at www.nomadjay.com.