How Will Lyft's Service Fee Hike Affect Its Rides? - Lyft (NASDAQ:LYFT)

Lyft, Inc LYFT boosted the service fee its U.S. riders pay directly to the company to cover higher insurance costs.
The increase averages less than $0.50 per trip nationally, Reuters reported.
Lyft reimburses drivers' insurance when they work on its platform.
"Lyft is facing insurance inflation pressures, and we've nominally increased service fees to help offset these costs," the Lyft spokesperson said in an emailed statement.
New data from YipitData showed Lyft increased its published service fee for rides in virtually all U.S. markets in the first week of October.
The service fee went up by about $0.60. The hike implied a 3% rise in the cost of an average ride and an 18% increase in the service fee.
The price the consumer pays should not change much based on these two changes, but it might change the amount Lyft takes as revenue versus the amount the driver accepts, YipitData analysts said.
Since the fuel surcharge went directly to drivers and the service fee went directly to Lyft, it suggests that Lyft would take more of each fare, assuming no changes to the other fare components.
Lyft had trialed an earnings algorithm allowing drivers in 18 U.S. cities to see destination and pay details before accepting a request.
With upfront pay, drivers can now see ride information and earnings before accepting a ride.
Price Action: LYFT shares traded higher by 5.65% at $12.44 on the last check Monday.