THE PRICE ISN’T RIGHT

Super-cheap rides are making Lyft less reliable

Or not!
Or not!
Image: Josh Edelson/AP Images
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A couple weeks ago I had an awful time trying to get a Lyft.

I requested one, a shared ride known as a Lyft Line, around 10:20pm. My request was matched with Vikram, a driver who was in the unenviable position of having to travel nine minutes from lower Manhattan to pick me up in downtown Brooklyn, after which he would drive another 10 or 15 minutes in Brooklyn to drop me off.

For this trip, Lyft was charging me $4.53, and I can’t imagine it was paying Vikram much more. Suffice it to say, I wasn’t surprised when, seven minutes later, Lyft alerted me that it had found “a different driver who’s already on the way.” This new, hypothetically improved match was another nine minutes away.

I spent the next 13 minutes watching that driver wind around the Brooklyn grid, and experienced the specific form of anxiety that comes from watching your driver’s avatar meander slowly, perhaps even purposefully, in the opposite direction. I gave up, canceled that ride (we noticed there was a problem with your ride, Lyft helpfully supplied) and was matched with a third driver, Aliaskar, who arrived 30 minutes after I first requested the trip to take me home.

On the way back, I asked Aliaskar if he knew why the two other drivers had failed to pick me up. He said everyone was headed toward Greenpoint, another neighborhood in Brooklyn, where rates were much higher, and that drivers probably weren’t interested in my cheap Lyft Line fare. It wasn’t a problem for him, though, he added, kindly.

Stories like this are a dime a dozen, but they hint at a bigger problem: When ride-hailing fares are too cheap, the service is less reliable.

A more extreme version of my experience in Brooklyn happened to an airline pilot named Darryl, who in April ordered a Lyft from Hermosa Beach, California, to Los Angeles International Airport. The first driver Lyft connected Darryl with was 15 minutes away and canceled. The second driver accepted the fare and drove from LAX to pick up Darryl. Then, about halfway through the ride, the driver abandoned Darryl in a parking lot, reportedly concluding he would only make about $6 for a trip that was going to take an hour from dispatch to dropoff.

At the time Darryl’s story was reported in the local press, many people blamed the driver, but I’d argue the real fault lay with Lyft. Drivers don’t get a lot of choice about their rides and passengers, after all, and it was Lyft that dispatched a trip that ended up not being worth the driver’s while. You could say the same of my recent trip through Brooklyn. It’s great for me, as a consumer, that Lyft will offer a ride for $4.53, but it’s less great if the pay for that ride is so low that no driver wants to accept the fare.

Lyft spokesperson Campbell Matthews said in an email that ride wait times in New York City average around five minutes. “In times of high demand, passengers may see a higher ETA as we work to provide an affordable ride for passengers and earning opportunity for drivers,” she said.

Uber co-founder and former CEO Travis Kalanick used to talk about how the first goal of surge pricing, Uber’s practice of raising rates when lots of people were trying to get a ride, was to keep the service reliable. “We don’t just charge to make a buck,” he posted on Facebook in December 2013. “The vast majority goes to the driver so that we can maximize the number of drivers on the road. The point is in order to provide you with a reliable ride, prices need to go up.”

Kalanick was right. Riders might hate surge pricing, but it ensures that people willing to pay more can get a ride quickly, because the higher fare makes the trip worthwhile to a greater number of drivers. Lyft’s ultra-low fares may very well be doing the opposite—making the service less reliable by luring customers with cheap fares that, ultimately, drivers don’t want to take. A $4.53 ride looks good until half an hour later, when you’re still waiting.

This post was updated to include additional information from Lyft.

An earlier version of this post was published in Oversharing, a newsletter about the sharing economy. Sign up for it here.