Lyft to Increase Service Fee Due to Higher Insurance Costs
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Lyft to Increase Service Fee Due to Higher Insurance Costs

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Rodrigo Andrade By Rodrigo Andrade | Journalist & Industry Analyst - Mon, 10/17/2022 - 15:05

Mobility service company Lyft announced that due to the increase in insurance costs caused by inflation, it will increase its fee for customers in the US. “Lyft is facing insurance inflation pressures and we have nominally increased service fees to help offset these costs,” said the company, according to Reuters. 

Data from YipitData showed that the US company raised three percent the cost of an average ride but the service fee increased by US$.60, or an 18 percent increase. This additional fee is paid directly to Lyft and is added to every ride to cover operating expenses and measures such as insurance. 

"Since the fuel surcharge went directly to drivers and the service fee goes directly to Lyft, it suggests that Lyft would take more of each fare, assuming no changes to the other fare components,” said the company.

The decrease in car ownership has presented new opportunities to tech companies, as ride hailing offers customers new solutions. Companies such as Uber, Didi and Lyft have taken advantage of smartphone penetration to increase their market growth. The Mexican ride-hailing market is expected to register a compound annual growth rate (CAGR) of 28 percent from 2021 to 2026, according to Mordor Intelligence. 

Mexico occupies one of the first places in the adoption of ride-hailing technology in Latin America, as its high urbanization and limited public transportation system has failed to meet demand, building a dependance on cars as a primary mode of transportation. 

Stakeholders in the Mexican mobility system are also following electromobility trends, but the country faces a complex transition to electromobility, hindered by the lack of infrastructure and support from the public sector. “There are two main challenges we have faced during our launch of our electric mobility services. The first has to do with the charging infrastructure. Creating two charging hubs from the ground up was no easy task like finding the correct balance of the charging power and personnel to handle this,” Enrique Mendoza, General Manager, Beat Mexico, told MBN.

Mexico needs collaboration between the public and private sectors to have a smooth transition to more sustainable mobility. “We are providing accessible, sustainable and safe mobility options for everyone and supporting the Sustainable Development Goal 11 of the UN 2030 Agenda, which aims to build sustainable cities and communities,” said Mendoza. 

Photo by:   Jackson David

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