Lyft Adjusts Fares in Two Cities, More to Come?
So in this week’s Lyft Digest, they notified Boston Drivers that they increased prices by about 10%. Its not a big deal on the surface but they also decreased prices in Phoenix as well. These changes didn’t seem to be related to any changes Uber has been making in other markets. They seem to be adjusting it based on supply in demand. In Boston, they are definitely having trouble recruiting drivers, even with their generous $750 bonus. The demand has been pretty healthy so they decided to increase the fares to try to attract more part time drivers. In Phoenix, the bonus is only $100 so it seems as if they are using the lower rates to increase demand for Lyft.
Here are the changes:
Boston (10% increase)
| 27% | |||
| 5/27/2015 | 6/5/2015 | June Increase | |
| Base | $ 1.13 | $ 2.00 | 77% |
| Cancellation | $ 10.00 | $ 10.00 | 0% |
| Minimum | $ 4.00 | $ 4.00 | 0% |
| Mile | $ 1.31 | $ 1.35 | 3% |
| Minute | $ 0.25 | $ 0.25 | 0% |
| Safety | $ 1.50 | $ 1.50 | 0% |
I came up with the 10% increase as the $0.87 increase in the base cost is about a 9% increase in your average fare. On average, my fares in Boston have historically been $10 a ride over a few hundred Lyfts across the different seasons (summer rides tend to be longer, winter rides shorter). Added to the 3% increase to the minute rate is about a 10% increase (after Lyft’s commission), which would be pretty nice.
I average about 2 Lyfts per hour, and over a full 40 hour work week, that equates to an extra $60 a week just in base fares alone (or an extra $240 a month).
Phoenix (18% decrease)
The decrease in Phoenix is a bit steep, at about 18%. This rate is closer to what Uber has in the market.
| -18% | |||
| 5/27/2015 | 6/5/2015 | June Increase | |
| Base | $ 1.80 | $ 1.50 | -17% |
| Cancellation | $ 5.00 | $ 5.00 | 0% |
| Minimum | $ 4.00 | $ 4.00 | 0% |
| Mile | $ 1.20 | $ 0.95 | -21% |
| Minute | $ 0.20 | $ 0.17 | -15% |
| Safety | $ 1.50 | $ 1.50 | 0% |
Is there more to come?
I believe Lyft will be adjusting fares in some cities over the summer. Hopefully they will increase prices in other markets too but I would guess that it’ll be a mix of minor increases and decreases to try to match demand with supply. The last time they adjusted fares was back in January where they cut fares in many cities to keep up with Uber:
Lyft Cranks it up to Eleven with more Fare Cuts
This could be the start of them adjusting prices for the “slow” summer season. Last year, they adjusted the commission and lowered prices to maintain driver earnings while giving passengers cheaper rides. As the weather gets better, there is a decrease in demand due to:
- Colleges are no longer in session (and grade school as well)
- More people rather walk or take public transportation with better weather
- More people and families go on vacation during the summer
There are a few ways to combat the slump in the summer, but I will cover that in another post.
What do you think will happen with Lyft fares over the next few months? Decrease or Increase?
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