Lyft is testing a new subscription-based feature called Price Lock, which offers commuters a capped fare on specific routes at specific times.
Rideshare platforms automatically increase the cost of rides when demand is high, like during rush hour, or when supply is low. The Price Lock feature is meant to combat that surge pricing (or as Lyft calls it, “primetime”) for commuters who are using Lyft to go into an office or workplace during peak driving times everyday.
“We are going to open up a can of whoop ass on primetime,” CEO David Risher said on the company’s second-quarter earnings call Wednesday morning. Risher added that commuters especially know what their ride should cost “and hate it when prices change.”
The subscription offering will cost under $5 monthly, Risher said.
It’s part of Risher’s broader effort to take on the number of rides impacted by surge pricing. The company can’t completely eradicate the practice, he said, but they can make an effort to lower the number of rides with increased prices to attract customers who may go to competitor Uber. Compared to the first quarter, the number of rides impacted by surge pricing was down 25%, Risher said. That contributes to better conversion rates.
But that potential to draw in more customers didn’t appease investors from the broader economics. Lyft shares dropped more than 12% after the company provided a soft forecast for its third quarter.
Lyft expected gross bookings between $4 billion and $4.1 billion for the third quarter, which is usually when business is booming thanks to tourism. Analysts, meanwhile, were expecting $4.13 billion. Its adjusted earnings guidance was also below Wall Street’s expectations.
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