Lyft Raises Ride Fees As Insurance Costs Rise

Lyft Inc. increases the service fee that American riders pay directly to the company to cover higher insurance costs a trip the firm said.

On average, the increase is less than 50 cents per trip nationally, a Lyft spokesman said. The company pays for drivers’ insurance when they work on its platform.

“Lyft is facing insurance inflation pressures, and we have nominally increased service fees to offset these costs,” a spokesperson said in an emailed statement.

New data from YipitData showed that Lyft increased its published fees for services in almost all US markets in first week of Octoberincluding about 150 New York City markets.

According to YipitData, service fees rose by an average of about 60 cents, representing a 3 percent increase in the cost of the average trip and an 18 percent increase in service fees.

The service fee, which goes directly to Lyft, is an additional fee added to each ride that covers certain operating costs and safety measures, such as insurance and a current year’s inspection.

Earlier this year, Lyft added a 55-cent surcharge that went directly to drivers to help drivers cope with higher gas prices eating into their paychecks. The program was terminated at the end of September.

Lyft is now offering up to 7 percent cash back when drivers pay for gas with a Lyft Direct debit card.

“The price the consumer pays shouldn’t change much due to these two changes, but it could change the amount Lyft takes in as revenue compared to the amount the driver gets,” YipitData analysts said.

“Since the fuel levy went directly to the driver and the service fee went directly to Lyft, this suggests that Lyft will charge more for each fare unless other components of the fare are changed.”