Working for Lyft just became more lucrative as the company announced that it is instituting a new minimum pay standard for drivers.
Beginning February 6 in most major cities and then expanding nationally in the next few months, the ride-share company will guarantee that drivers will take home a minimum of 70% of what riders pay.
Most drivers don’t take home their full earnings at the end of each week due to external fees in the app, such as taxes, tolls, and insurance costs, but now Lyft is promising to pay drivers the difference weekly if their total earnings amount to less than 70% of rider payments.
“We think hopefully it will get more drivers driving for Lyft, but also just make the whole sector stronger,” said Lyft CEO David Risher, per Reuters. “We have more drivers now than we’ve had, I think, since the middle of 2019. It’s strong and I tell you what, it’s getting even stronger.”
According to internal data from the company, an average of 15% of Lyft drivers took home less than 70% of rider payments during any given week in 2023.
Lyft did not disclose how much the new payouts will cost the company in the months ahead.
The ride-share company beat analysts’ estimates during Q3 of 2023, counting 22.4 million active users, up 10% from the same time a year prior.
Lyft laid off roughly 1,000 riders at the end of Q1 of 2023 in an attempt to cut costs and help make “service-level improvements” for riders and drivers.
The company was up over 6.6% in a 24-hour period upon the news as of Tuesday afternoon.