(Reuters) — Lyft Inc. is raising the service fee its U.S. riders pay directly to the company to cover higher insurance costs, the ride-hailing company said.
The increase averages less than 50 cents per ride nationally, a Lyft spokesperson said. The company pays for driver insurance when they work on its platform.
“Lyft is facing inflationary pressures on insurance, and we have nominally increased service fees to offset these costs,” the spokesperson said in an emailed statement.
New data from YipitData showed that Lyft raised its published service fee for rides in virtually every U.S. market in the first week of October.
The service charge rose by an average of about 60 cents, representing a 3% increase in the cost of an average trip and an 18% increase in the service charge, according to YipitData.
The service fee, which goes directly to Lyft, is an additional fee added per ride that covers certain operating costs and security measures such as insurance and background checks.
Lyft added a 55-cent surcharge earlier this year that went directly to the driver to help drivers deal with higher gas prices. The program was stopped at the end of September.
“Since the fuel surcharge went directly to the 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,” YipitData analysts said.