lyftseahawksJust two days after the Seattle City Council voted to regulate the new app-based transportation companies, Lyft is no longer accepting donations as payments to drivers for rides.

Starting Thursday, passengers using Lyft in Seattle cannot decide to name their own price and must adhere to Lyft’s pricing requirements.

In the past, Lyft’s drivers did not collect “fares,” but rather what it called “donations.” Lyft would suggest a payment amount, but riders could technically reduce that to zero.

Now, though, Lyft will calculate the price of a ride based on distance and time with a $6 minimum payment. Rides will cost $1.90 per mile and $0.35 per minute, along with a $1.50 pickup fee and a $1 “Trust & Safety” fee, which covers insurance.

lyftapp12“Starting tomorrow, we’re transitioning from donations to regular payments in Seattle, providing increased transparency for passengers and greater peace of mind for drivers,” Lyft wrote in an email to customers.

UberX charges $1.63 per mile and $0.30 per minute, along with a $2.14 pickup fee and a $5 minimum fee. Sidecar lets drivers set their own prices based on demand.

By contrast, Seattle taxis charge $2.75 per mile and $0.50 per minute during waiting times, along with a $2.50 pickup fee.

Lyft still collects donations in ten cities, while charging a set amount in 14 other cities, now including Seattle. The company has noted that it can screen passengers who have a history of giving low donations, lessening their chance of receiving future rides.

Lyft, which is raising a $150 million Series D round, will soon also implement a new program that discounts the cost of a ride by up to 50 percent when there are drivers available but not as many ride requests. It also raises the price of rides when demand is high.

Lyft recently announced plans to expand its service across the greater Seattle area, despite the fact that the Seattle City Council on Monday voted to cap the number of vehicles that UberX, Sidecar and Lyft drivers can have on the streets at one time to 150.

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Comments

  • ClaimsAdjuster

    Lyft called what it charged its customers “donations” instead of cab fares so that it could pretend that it was “ride sharing” instead of a for hire service. It is nothing more than a regulatory arbitrage scheme to avoid licensing and commercial insurance. They are still freeloading off the private auto insurance market.

    • Sondra

      That’s not “freeloading” – that’s business. Your company will likely use tons of your insured’s money to lobby our government to change the rules in your favor – it’s unbecoming when business reps whine and complain about the small guys getting a little bit of money in the interim – it’s almost as if you all actually believe that you should be allowed to conduct yourselves amorally but everyone else should be held to some other ethical standard. Oh wait, that’s exactly what it is.

      • ClaimsAdjuster

        Uber and Lyft are now the “small guys”? They are companies backed by Wall St and Silicon Valley VC.

        The Uber /Lyft insurance scam is based on fraud. Instead of paying for their own accidents, they are attempting to dump it on the private auto insurance policyholder.

        This is what San Francisco ADA Conrad Del Rosario had to say about this scam:

        “Drivers for app-based ride services increasingly commit insurance fraud, a San Francisco assistant district attorney told state regulators on Friday.

        Some drivers for services such as Lyft, UberX and Sidecar lie if they get into an accident and claim they were driving for personal reasons,Conrad Del Rosario told a state Department of Insurance hearing.

        That type of fraud has increased in recent months, he said, as drivers seek someone to pay for repairs when their cars are damaged. The reason: Personal auto insurance doesn’t cover commercial activities, while the ride companies’ $1 million liability policies cover passengers and third parties, but do not cover the drivers and their cars.

        “Personal carriers have absolutely no way to detect this fraud,” Del Rosario said. “They’re completely powerless to know when a person is doing (transportation network company) activity … or conspires with a passenger to say that’s his friend he picked up at a bar.”

        Another type of fraud, which Del Rosario said is extensive, is rate evasion – drivers who buy personal policies, while intending to use their vehicles full time to carry paying passengers.”

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