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Lower pay and higher costs: The downside of Lyft’s car rental program | Los Angeles Times

McNeill wrote that the company is expanding the program, hoping to increase driver earnings by offering fuel-efficient cars.

“Someone wanting to drive with Lyft can rent a car for as little as a week and return it, if things didn’t work out,” Lyft spokesman Eric Smith said in a statement. “We’re proud to be able to provide opportunities to those who need them most.”

However, in interviews with The Times, some struggling drivers who rent through Lyft’s Express Drive program say it has made it difficult to get back on their feet. Documents show those drivers are paid less per mile than Lyft drivers who use their own vehicles or cars leased through dealerships. That makes it harder to offset Lyft’s rental and insurance payments in some markets, which start at $219 a week and rise as high as $479 a week in New York. By comparison, ride-hailing drivers in some markets who rent a comparable car from a dealership can pay less than $160 a week, including the cost of insurance.

Lyft also imposes unique restrictions on drivers who rent cars through its Express Drive program, mandating they provide 20 rides a week to keep the car and prohibiting them from making money using their vehicles to work for other services, according to six drivers and documents reviewed by The Times.

Lyft blames its higher rental prices and lower mileage rates on the cost of insurance. The restrictions are stem from the policies of Lyft’s rental car partners: Hertz, Avis and Flexdrive, the company says.

Increasing revenue and ride bookings is especially pressing for Uber and Lyft, which are now publicly traded. Neither company expects to turn a profit in the short term, which means investors will pay close attention to growth.

Lyft operates its Express Drive program at a loss but says in regulatory filings that it’s a key way to increase its supply of drivers.

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Lower pay and higher costs: The downside of Lyft’s car rental program – Los Angeles Times.

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