Lyft attempts to combat surge pricing

“Open up a can of whoop ass on primetime”.

Those were the words David Risher, CEO of Lyft, chose to describe their upcoming product feature: Price Lock.

With Price Lock, Lyft aim to reduce the negative impact of surge pricing, aka ride prices dramatically ramping up based on demand. The solution, according to Risher, is an additional monthly subscription cost that would “cap the price of a specific route at a specific time”.

There are plenty of unknowns around this feature, not least of which is its price (rumoured to be less than $5 per month).

Why this matters. Surge pricing has been at the centre of a lot of negative sentiment. In 2021, Uber and Lyft came under fire when research showed their per-mile cost increased by nearly 35% in Los Angeles and 25% in other large American cities.

This isn’t just a ride-sharing app issue. Consumers have expressed frustrations towards similar practices in many industries including airlines, e-commerce, food deliveries, and more.

In Europe, some governments have taken action. Italy, for example, plan to intervene against airlines after noticing average prices rising by 70-200%.

The competition is fierce. Lyft’s decision to tackle surge pricing is, of course, partially backed by a competitive drive against their primary rival Uber. Lyft is still trailing behind on most key metrics (see below).

This new approach might be a key element to David beating Goliath.