Lyft nixed its surge cap and didn't tell riders

Higher surge prices could mean more drivers picking up Lyft fares.

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David Lumb
April 20th, 2016
AP Photo/Jeff Chiu, File
AP Photo/Jeff Chiu, File

Surge pricing is an expensive fact of life for Uber and Lyft riders, but Lyft's policy was to cap their "Prime Time" surge prices at 3x normal. In February Lyft informed drivers it was removing the surge cap — but nobody told the riders. So much for disclosure.

In the car service deadlock between Lyft and Uber, wouldn't raising prices turn off passengers? Sure, but not as much as waiting too long for a car. Lyft's argument is that higher prices will encourage drivers to pick up more rides. Many drivers work for both, so Uber and Lyft are often competing for drivers as well as fares. Quartz suggests that upping the surge limit may increase the number of Lyft drivers, which will keep rider wait time low.

Such is the tightrope that both have to walk. Lyft adjusted its pay structure back in December to keep drivers from cheating their system, yet cut fare prices a month later to stay competitive with Uber. Nixing the Prime Time cap is just another market adjustment.
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