A year ago, Lyft introduced a new way to pay its drivers designed to get them on the road more often. Drivers who clocked over 30 hours (at least a third of them designated peak hours) could get an additional 10 percent in commission on top of the 80 cents on the dollar Lyft usually pays. Drivers who logged 50 or more hours could get 20 percent more, the full cost of the ride. Yesterday, the ride-hailing startup quietly tweaked the formula. The program, called Power Driver Bonus, now doles out bonuses based on the rides drivers make rather than hours driven. So if a driver clocks 100 rides a week, 30 of them during peak hours, she gets the full price of the ride. A Lyft rep confirmed the change, noting that it is designed to give drivers more flexibility. Here’s another reason, one that Lyft probably won’t say out loud: Some crafty drivers were finding loopholes, securing bonuses without the additional mileage. Drivers would log into the app but not make a pick-up, according to a few drivers Re/code spoke with. Or they would select a pick-up then stall, waiting for the rider to cancel, netting the hours but not the gas toll — or the ride. (The Power Bonus program requires that drivers maintain a 90 percent acceptance rate.) That said, drivers do tend to cite flexibility and bonus opportunities as reasons for favoring Lyft over larger rival Uber. Lyft said it has paid out $22 million to drivers so far through the program, which is expanding in three cities. That’s not a massive amount. But if we take its financials as reported by Bloomberg — $46.7 million in revenue, after paying out drivers, for the first half of the year — that’s roughly akin to a fourth of its annual sales. Quite a sum to keep drivers from spending more time with Uber. Yesterday, the Seattle city council approved a measure allowing drivers for both startups to unionize. This article originally appeared on Recode.net.
It would seem that Lyft’s old bonus scheme, which offered more money based on the number of hours a driver clocks, was a bit too easy to manipulate, and as such the ride-sharing company has been forced to rethink its bonus strategy. Lyft is now awarding bonuses based on the number of rides a driver makes instead, which is obviously much harder to falsify. According to Re-Code, under the new scheme, drivers will get 100% of their earnings if they complete 100 rides per week, with 30 of those rides accomplished during peak hours. Previously, Lyft would forego taking its commission from drivers who clocked up 50 hours per week, however this allowed drivers to log into the app to accumulate hours even if they had no intention of picking anybody up. The new system will obviously be better for Lyft’s bottom line, but also for clients as it translates to more “real” rides actually available on the roads.