Lyft CEO says he’s rolling out a monthly subscription to address the app’s ‘most hated feature’

Rideshare Company Lyft The company this week said it was offering customers a “crazy” way to bypass a common feature of ride-hailing apps that can turn off many passengers — dynamic pricing.

Lyft CEO John David Risher announced a monthly subscription service called “Price Lock,” which caps prices on specific routes at select times. In effect, it lets customers avoid paying inflated prices during peak demand periods, a subject of many passenger complaints. It’s aimed at commuters who drive, say, from home to the office at roughly the same time each day.

“A lot of you have probably experienced this at one point or another, and I’m willing to bet you didn’t care one bit,” Risher said of dynamic pricing during Lyft’s second-quarter earnings call on Wednesday. “It’s probably the most hated feature of ridesharing,” he added, before noting that “thanks to a tremendous effort by our team, building on the great momentum we’ve seen from drivers, the number of rides covered by Primetime has dropped dramatically.”

Ridershare’s Most Hated Feature

In other words, rides is subject to rapid price changesalready down. And in the second quarter, surcharges for each ride were down 25% compared to the first quarter. Risher said that led to more passengers actually booking rides with the company. Spurred on by these so-called conversations, the CEO said, “we’re going to do something a little crazy.”

Price Lock will provide more reliable pricing for regular passengers, but it won’t completely eliminate dynamic pricing, which Risher said is still “an important way to match supply and demand when demand spikes.”

“But with innovations like Price Lock, we can gradually reduce the frequency of this and hopefully take what I’m willing to bet is, again, the least-liked, most-hated feature of ridesharing and turn it into a reason to choose Lyft,” Risher said.

How much will it cost?

He gave an example Lyft a customer from Sausalito, California, who lamented that she would never know how much it would cost her to commute to San Francisco regularly.

“And she said that like every morning, she’ll wake up early and figure out if it’s $25, $30, $35, more for her to get from Sausalito and San Francisco? And if it’s $20, $25, she’ll definitely take a Lyft. If it’s more, sometimes yes, sometimes no, if it’s too much, she’ll drive, etc. So people really don’t care,” he said.

He added that the company is still working out the “exact economics” of the Price Lock feature, which requires a subscription fee. He said the fee will “definitely” be less than $5 per month.

Lyft’s app currently shows that a $2.99 ​​per month fare lock fee saves a passenger up to $40.

The goal is not only to save passengers money, but also to give them some certainty about how much their rides will cost. Lyft has been testing the feature for about a month, and it’s currently available to all passengers.

It also gives Lyft an advantage over competitors who have not yet announced ways for customers to bypass burdensome dynamic pricing.