Lyft Financial Woes? (UPDATED)

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Please see ongoing updates at the end of this post.


Rideshare drivers are abuzz.  It appears that ridesharing operator Lyft did not pay their drivers this morning via their normal weekly direct deposit.

lyft

Drivers for services like Uber and Lyft operate as independent contractors, with all their ride profits from the previous week direct deposited into their bank accounts the following week.

Lyft normally pays on Wednesdays (ahead of Uber who pays on Thursdays).  Today Lyft drivers in several US cities are reporting on social media that they were not paid and that no statement has been issued as of yet from the company.  Some are using the social media hashtag #lyftnopay to spread the word.

Speculation on some rideshare driver forums is that Lyft financial woes have returned despite another infusion of venture capital funding.

Compounding rumors is the news today that Lyft has notified its Kansas City drivers that it will no longer operate in that market as of Friday at noon.

In some cities, both Lyft and UberX have cut passenger fares as well as driver pay in efforts to compete with one another, in some cases leading to driver turnover as some of the earliest drivers for the fledgling companies have left both due to lowered pay.

There continue to be many woes for ridesharing, despite some victories such as the announcement Monday that San Francisco International Airport would begin allowing rideshare drivers to pick up there, a move that many cities do not allow.  Still, both companies are continuing to fight legal and regulatory battles in major US cities as those markets seek to regulate the services on the basis of public safety.

Its fairly common in some cities for drivers to contract with both Lyft and Uber, so I wouldn’t expect a shortage of drivers – yet.  But in the currently volatile world of ridesharing, this may push a few current drivers over the edge.  Fewer drivers coupled with growing demand to me means more surge fares and pricing increases on the horizon.

Full disclosure – I DO drive for Uber, I don’t drive for Lyft (despite several Uber drivers trying to recruit me to do both) – a pink mustache isn’t my thing. 


Update Wednesday at 12 pm CT – one driver I talked to has now received an individual reply from Lyft on their pay inquiry with the company.  Lyft reports initiating the ACH transaction yesterday as normal and said that it is likely a banking institution issue that would delay payment until Thursday or Friday.

Update Wednesday at 1 pm CT – another driver has shared a response from Lyft encouraging drivers to think of Friday as their payday, but noting “we will have the ability to payout earlier in the week when possible, however, it will always deposit by Fridays”.  This after some drivers reported checking with their banks to find that no ACH was pending yet.  (editorial note – that certainly sounds as if it this was a Lyft financial decision, not a bank financial issue)

Update Wednesday at 3:45 pm CT – a representative from Lyft has reached out directly to Jetsetter’s Homestead to state the following:  “Drivers always receive payment by the end of each week, though many individuals will receive theirs earlier in the week depending on their bank.  All drivers have always been paid through our system so funds will appear in their accounts by the end of the week as usual.”

Update Thursday at 7:30 am CT – many Lyft drivers are reporting this morning (via social media, driver forums, and email) that their direct deposit appeared overnight

About Jennifer Moody

Jennifer is a management consultant and avid volunteer. Her career and volunteer duty travels have helped her log top-tier airline and hotel status annually for the last eighteen years. In addition, she embraces the opportunity to maximize her vacation time by planning extracurricular trips that have taken her to over 60 countries and 48.5 US states. Although she averages 200 days a year on the road, she loves to return to “the homestead” in her native Fort Worth, Texas where she enjoys cooking, gardening, sewing, needlepoint, wine, and cocktail mixology.

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Comments

  1. I much prefer Uber, I’m not sure how long Lyft will be around. One or both companies could be bought out by a larger company. It will be interesting to see what will happen to these companies.

    Jennifer, as an Uber driver, what is your take on all the new Uber modes of transportation: UberPlus, UberPedal, etc.?

    • I think Uber is trying to be a “disruptive technology” catalyst and succeeding at that goal. I can’t say I’m confident that all of these products will be around in 10 years, let alone 10 months, but I like the way they are shaking up the way we are thinking about on-demand services that are transport based (car for hire, taxi, delivery). I know in my market, Uber recently was looking for off-duty firemen interested in earning extra income, prompting some speculation that they might be trying out a “movers on demand” product.

      My car qualifies for UberPlus as it’s currently being tested in Southern California so I’m hoping it spreads to us here in Dallas/Fort Worth!

      • If UberPlus comes to DFW, will you be able to drive UberX and UberPlus at the same time? I don’t need an UberPlus to take me to the airport, just a cheap UberX will do.

      • If it works the way it does in So Cal (and how UberX vs. XL works) then yes. I can be signed in to both and can accept the lower paying X rides as well as the Plus rides. If I accept X, however, they get to ride in a Plus but only get charged X and I only get paid X.

        The advantage is that if you have a vehicle that qualifies for Plus (or XL or both) is that if riders want the higher ride and are willing to pay for it, only those drivers get it.

        Basically Plus vehicles are higher caliber vehicles – they would qualify for UberBlack if they had a commercial medallion and were self-insured.

        Of course, that might be moot for me soon. Fort Worth City Council is pushing for all ride share drivers to have to carry a blanket $500k commercial liability policy. Right now we have occurrence-based liability through Uber (which is what the $1 per ride Safe Rides fee covers where we have it) where Uber only covers us while we are actively working (phone on and/or driving customers). Commercial liability to that degree will cost about $700 a month which will price most part-time drivers out of the market. And it’s steep for a full-time driver too given the rate cuts Uber has put in place.

  2. Interesting, that is very helpful information. Hopefully Uber and your city council can come to some type of agreement where it won’t cost too much. How many hours per week do you typically do Uber?

  3. Thanks so much about blogging this! I have been trying to avoid social media but I still wanted to know what was going on. I was surprised to see I didn’t get paid this morning. I just started in September but every week, I have been paid on Wednesday. Hopefully, we will get paid soon. So glad I don’t have any bills to pay today.

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