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Lyft incoming CEO David Risher discusses the changes he will make to turn the company’s stock around on ‘The Claman Countdown.’
Rideshare giant Lyft is offering users the ability to lock in ride prices, a feature aimed at helping them avoid surge pricing.
It'll cost subscribers $2.99 per month, and the company said that it could save riders $40 per month in savings.
The price lock feature is catered to help people who make the same commute at roughly the same time every day, according to Lyft.
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In its latest earnings call, CEO David Risher said that the latest feature is "about paying a little bit of money in subscription fee to get a very, very consistent experience day in and day out for 30 days."
Users will find a "price lock" section in the menu of the Lyft app. Once signed up, riders can lock in the price of a ride they take in advance to ensure they won't get hit with a high price later on.
If the price of the ride is lower than when they locked it in, they will automatically pay a lower rate, according to Lyft. The feature also doesn’t affect driver earnings. Drivers will continue to receive their full, guaranteed earnings, with Lyft covering the difference if needed, the company said.
If the price of the ride is lower than when they locked it in, a customer will automatically pay a lower rate, according to Lyft. (Smith Collections/Gado via Getty Images / Getty Images)
Surge pricing, which causes prices to fluctuate based on current market dynamics, has long been a point for all rideshare users, and has recently drawn scrutiny from Congress.
Risher said during Lyft's August earnings call that "it's probably rideshare's most hated feature."
The surge or dynamic pricing, which hits customers using Lyft and Uber, is affected by high demand, bad weather or rush hour.
Uber and Lyft decals on a car (Getty Images)
Senate Finance Chair Sherrod Brown, D-Ohio, in July wrote a letter to the CEOs of Lyft and Uber calling for transparency from both companies on their use of surge pricing to set fares.
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Risher and Uber CEO Dara Khosrowshahi have continually noted that increased driver supply helps curb surging prices.
In its latest quarter, Risher said that the company saw the "most new drivers in any quarter since 2019 on the platform" during the second fiscal quarter and the average surge amount "included on each ride declined by 25% versus the first quarter." Ticker Security Last Change Change % LYFT LYFT INC. 11.35 -0.27 -2.32% UBER UBER TECHNOLOGIES INC. 72.48 +4.39 +6.45%
Similarly, Khosrowshahi told analysts "what we see is improvement in driver supply. As driver supply improves, surge comes down."
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Both companies have also been offering ways to circumvent a surge in prices with cost-effective options.
Lyft already has an option dubbed Wait & Save, which is about "trading off time and money," according to Risher.
Meanwhile, Uber announced a scheduling feature over the summer that lets UberX Share riders schedule rides up to 30 days in advance. Riders can lock in their price when scheduling. UberX Share is a feature that lets customers save up to 20% when matched with a co-rider.
Uber also announced its shuttle feature that connects airports, stadiums, live events or work, which the company said costs "a fraction" of a ride with UberX.
