Lyft Dallas Is About To Expand -- And Raise Prices

Categories: Transportation

lyftbigmap.jpg
Starting tomorrow, Lyft will go more places, but also cost more.
When Lyft rolled into Dallas last fall, it was a popular cab alternative for city-dwellers who couldn't afford Uber's "surge pricing" and who also didn't need to travel very far. But that's about to change.

Starting tomorrow afternoon, Lyft's service area in Dallas will expand to a much bigger grid around the city, making the company more competitive with Uber. That seems like good news for customers, but be warned: that extra service is going to cost more. Lyft is also changing its pricing model in Dallas, using a similar, surge pricing-like program.

Uber was hit with accusations of price-gouging when it introduced its own "surge" pricing program nationally. Lyft has clearly been trying to avoid that, portraying its own surge program, called Prime Time Tips, as something created to benefit the drivers. "100% of the extra tips given during Prime Time will go directly to drivers," the company website says. "Lyft will be the only company that does not take any fees from extra ride tips at peak times."

In an email to Unfair Park, Lyft spokesman Paige Thelen adds that Lyft's program is superior to the surge-pricing models used by other, unnamed competitors: "This differs from other company models, such as surge pricing where the company takes a percentage of the increased amount," she writes, because Lyft promises not to keep any of the extra tip money.

Well, giving drivers bigger tips does sound nice. But the extra tip money is only there because Lyft drivers are also losing their hourly base pay. Originally, Lyft drivers in Dallas were promised a "floor" pay of $15 an hour. During busy times, they could earn more--as much as $20 an hour.

"When we first launch in a city, we pay drivers a guaranteed amount to ensure there are rides available for new passengers using the app," Thelen adds. "Now that Dallas is growing quickly, we have finished this beta period." Instead, drivers will be paid per ride--keeping 80 percent of the funds from each ride and 100 percent of the tips.

In an email to drivers, Lyft makes the case that they will no longer need the "floor" pay anyway because Lyft is doing so well: "Now, awareness is growing and Prime Time Tips will raise your earnings even more. This means Dallas no longer needs the floor," the company told drivers.

Whether that pans out will depend on Lyft's success--and whether or not Dallas plans to introduce any regulations to mess it up. "The not-so-nice thing is Dallas being the big ass, sprawly, pretty-comfortable-with-drunk-driving city that it is, we'll end up driving further to get to customers and the tips program probably won't go into effect very often," a driver tells Unfair Park.

On the plus side for corporate headquarters, a bigger coverage area for Lyft means that the City Council will no longer be able to make bogus complaints that the service is redlining.


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11 comments
maudlissa
maudlissa

New users can use code MEMA54 before their 1st Lyft request for $25 credit applied to your account.

jessicajackson2983
jessicajackson2983

All great input! Innovation and technology are breaking molds and it is up to the people to decide the services they would prefer. Have you taken a Lyft yet? In all cities where Lyft is available, new users use code 37PZ7Z to receive $25 in Lyft credits to try it out! $25 will likely get you a free ride, so why not try it? See for yourself, if you think think this company is here to stay!

holmantx
holmantx topcommenter

When attempting to break into a market the new guy on the block will try and undercut the other guy's prices for as long as he can to gain market share.  It's risky and you can lose your shirt.  Once he set's up his brand, at some point he (or she) will have to stop operating at a loss or just breaking even.  It's brutal dog-eat-dog free enterprise.  The consumer benefits certainly during this time period but new efficiencies emerge by all the participants which ultimately delivers a better product over the long term.  America is happy.

At its core, this is what we call American Exceptionalism.  Not us personally but the limited regulatory environment we cooked up to delver this miracle we call America.  It is the system, not the people which is unique.  A business model, so to speak.

Now enter the government (the City in this case) who, over time, and although pure of heart and intending only to do good for the people, invariably ends up declaring winners and losers, thus screwing up the concept.  No one's happy except Yellow Cab and the scabs who are "cheating".  The people are unhappy.

This is but a small case study why we reside nationally in a looping economic groundhog day, and mired in a French social democracy twilight of malaise.

We are over-regulated.

Locally, we can force a government to be more responsive.  Nationally, it's like granite.  The state government is somewhere in between.


jmckee3
jmckee3

As an Uptown dweller this might send me back to Uber actually, I much prefer Uber black and my rides are rarely over the $15 minimum. Lyft was undercutting that significantly, closer to $5-$8 so I moved most of my solo rides to Lyft but if it goes closer to $9-$11 I'm just going to pay the extra few dollars to ride in a more comfortable fully licensed car/driver.

P1Gunter
P1Gunter

Is Deion Sanders behind this prime time pricing?

lankyw
lankyw

Lyft and Uber is A Good thing for Dallas and all the People in the Area.

Tipster1908
Tipster1908

@holmantx I agree that we're over-regulated. And clearly those regulations were created to favor Yellow Cab. They were written by Yellow Cab, after all. But I still think we need some baseline regulations. Lyft drivers don't have valid commercial insurance. It's too expensive to be able to afford on what they make driving for Lyft. When one of these drivers gets into an accident and his insurance refuses to pay for the medical care of the injured passenger because the driver was using personal insurance to drive commercially, who do you think the public will blame? They will blame the city for looking the other way when a company came to town and violated its existing regulations. I'm not saying that's how it should be. That's just how it is. Most people aren't rational in directing their anger at the responsible parties because they don't feel like they can control that. But you can be sure they can organize themselves and make the city council sit through their temper tantrums.

dingo
dingo

@jmckee3  

How's that uptown dwelling walkable thing working out for you? Under $15.00 per ride carbon footprint? Hell, tear down all the freeways.

jmckee3
jmckee3

@dingo Me not wanting to walk from the gayborhood at 2:30AM to Uptown drunk is not an indictment of walkable urban living. 

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