How is Lyft attempting to siphon riders from competitors?

Ride-hailing customers have been telling companies that they don’t like surge pricing, and Lyft at least seems to be listening. The company reports that it is in the process of doing away with increased prices during peak demand times, which it refers to as “prime time.”

“It’s particularly bad because riders hate it with a fiery passion,” said Lyft CEO David Risher. Between the first and second quarters of this year, the company reported a 35 percent decrease in the number of riders who experienced surge pricing. The company aims to continue this trajectory until primetime pricing is completely eliminated.

And it seems Lyft is willing to make this change even if it means a decrease in revenue. The company’s revenue per rider in the second quarter of 2023 was down from the first quarter even though its overall rider numbers were up. One hope is that the elimination of surge pricing will encourage riders to choose Lyft over its competitors more often, leading to better long-term growth. “That has a revenue implication — we’re actually taking less money. But it’s good for our riders, and it’s good for our overall market results,” Risher said.