While Uber is standing by its surge pricing, e-hailing app Lyft has introduced lower prices—as much as half the normal fare—during periods of slow demand. Lyft's so-called happy-hour pricing will be available to all riders beginning Tuesday.
"One thing we realized about dynamic pricing, the way it's designed previously is it only went up," Lyft CEO John Zimmer told Fast Company. We spoke with Zimmer, himself a Lyft driver, during a ride-along in his decked-out mini van, which features not only the company's signature pink mustache but also furry pink floor mats, seats, and visors.
Lyft's happy hour is designed to lure in more customers when demand is low, but the hours don't overlap with traditional happy hours associated with bars. Zimmer said requests for Lyft typically wane between 11 a.m. and 3 p.m., picking up around 5 p.m. During periods when drivers outnumber passengers requesting rides, fares will drop between 10% and 50%.
With the introduction of happy-hour pricing, the company hopes to increase demand and help drivers book more fares. Like Uber, which has increased fares up to 9.25 times during surge pricing, Lyft's prices also climb during "prime time," when there are more ride requests than drivers, but Zimmer makes a point to note the higher fare is capped at 200% the normal rate. "With happy hour, Lyft will be the most affordable option at all times," he said.
Slideshow Credits: 01 / Image: Lyft; 02 / Image: Lyft; 03 / Image: Alice Truong/Fast Company;