Lyft is adding new driver pay measures that will include higher payouts for trips that take longer than estimated. The changes come as Lyft battles to win business away from its larger rival Uber.
The ride-hailing firm announced the changes in a blog post Tuesday. To account for trips that get stuck in traffic or other delays, Lyft said it will boost pay on rides that go five minutes or longer beyond estimates. Further, the company will provide an estimated per-hour rate upfront for each ride, Lyft announced.
Lyft is also introducing a "preferred driver" program, where drivers with a strong safety score will receive more ride requests.
"Understanding your earnings shouldn't feel like navigating a labyrinth, and today's updates help drivers make better decisions, stress less about math, and feel confident that their time is valued fairly," said Jeremy Bird, vice president of driver experience at Lyft, in a blog post.
Lyft stock fell more than 2% to 12.22 in morning trades on the stock market today.
Lyft Stock: Down 17% Year-To-Date
Meanwhile, Lyft stock is down 17% year-to-date. It had an IBD Composite Rating of 59 out 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
The ride-hailing company is expected to release third quarter earnings later this month.
In the second quarter, Lyft swung to a surprise profit and boosted a better-than-expected 41%. But Lyft stock took a hit following the report because of weaker-than-expected total bookings and guidance for Q3.
Lyft Chief Executive David Risher took over the job in April 2023. He has focused on improving the company's profitability while offering more consistent pricing for riders.
Meanwhile, Tesla on Thursday will host its much-anticipated robotaxi reveal event. The potential threat of Tesla launching a competing ride-hail service to Lyft and Uber has weighed on both stocks since Tesla leader Elon Musk teased the idea in the spring.
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