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Ride-hailing services are now commonly used by a wide range of consumers. However, it is not commonly known that the two leading ride-hailing services, Uber and Lyft, have yet to become profitable. Both companies are taking major steps to make change that.
Last year saw the introduction of loyalty programs for each brand. Nothing had previously stopped riders from downloading each app, selecting a destination, and then opting for whichever service offered the same ride for cheaper. Rewards programs gave riders an incentive to pick a brand and stick with it, even if a particular ride cost a little more.
Now, Lyft is set to implement measures to promote driver loyalty. Presently, the drivers are not employees, but rather are considered independent contractors, as they work at their own schedules without obligation to Lyft. (Should the legal definition of these drivers’ role change, the brand will be required to provide benefits, which will be a serious impediment to achieving profitability).
The brand is set to offer a range of perks to its drivers in an effort to encourage them to be more loyal and drive for the Lyft brand with greater exclusivity. The perks are aimed at helping drivers economically, such as no-fee bank accounts, debit cards, and special prices on rentals. Additionally, the brand will also open centers where drivers can get car washes and discounts on car maintenance.
The initiative, called Lyft Driver Services, will assist drivers financially without the company having to raise fares or reduce the amount it takes from them for each ride. “Our primary aim is to increase pay and for us to become the platform of choice for drivers,” says Lyft COO Jon McNeill.
By increasing pay, McNeill means introducing a branded debit card that offers cash back incentives of four percent on restaurants, two percent on gas, and one percent on groceries. Lyft will partner with Stride Bank to give drivers the opportunity to access earnings through an online bank account that charges no monthly fees and requires no minimum balances.
This program faces competition from Uber Pro, a rewards program for Uber drivers, with high ratings and low cancellations. Uber Pro offers cash back on fuel, maintenance help, and roadside assistance. McNeill posited that Uber Pro will only benefit a limited number of Uber’s drivers, however. With Lyft, he said, “It’s not like there are hurdles for you to increase your earnings.”
Last year, Lyft introduced driver “hubs” for affordable vehicle maintenance and car washes. The company said it will now turn those hubs into driver centers. “If you need support, you come for support,” McNeill says. “If you want to rent a car, you can do that. If you need your car repaired, you can do that. And we’re also adding community space for driver education, driver meetups, and those sorts of things.”
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