Ride-hailing service Lyft wants to stay on drivers' good side, and sign up new ones in the process. So the company announced today that it has partnered with gas company Shell and the Hertz car-rental service to provide discounts for both current users and prospective drivers thinking about joining Lyft.
The goal is both to appease the more than 100,000 Lyft drivers around the country as well as broaden the scope of potential driving candidates. With the new partnerships, the more you drive the more you will save on gas, all the way up to a free fill-up. The Hertz deal, which remains a pilot program in Las Vegas, Nevada for now, means drivers who lose access to their vehicle can substitute a rental car. Those that don't want to purchase a car can also now rely on Hertz to start driving for Lyft.
Lyft co-founder and president John Zimmer told drivers at an event today in San Francisco that Lyft is always striving to be "the company that treats you better than anyone else." The partnerships today continue Lyft's effort to sweeten the driver experience, including a deal with Starbucks' loyalty program and a number of discounts for third-party health care, tax filing services, and car-loan programs. Lyft is also introducing to its service a new feature called Express Pay. It will let drivers cash out directly to their debit card — a product of a partnership with payments startup Stripe — as soon as they hit $50 for a $0.50 fee. Uber offers similar benefits, including a gas credit card of its own, and discounts on cellphone plans and car-maintenance fees.
The announcements fall short of reclassifying Lyft drivers
The announcements fall short of reclassifying Lyft drivers as employees amid mounting pressure from lawmakers who feel ride-hailing services are abusing US labor laws by keeping drivers classified as independent contractors. Through independent contracts, Lyft and competitor Uber avoid paying payroll tax, unemployment insurance, workers’ compensation, and state taxes. It's easy to understand why the companies are pushing back, as it could increase labor costs by up to 30 percent, according to a study by the National Employment Law Project, a workers’ rights group. The ongoing courtroom battle over reclassification has resulted in a number of pivotal legal decisions, specifically in California.
The California Employment Development Department ruled in August that a former Uber driver from Southern California should have been deemed an employee and not, as Uber tried to argue, an independent contractor. Meanwhile, a US district judge in San Francisco ruled last month that a separate lawsuit filed against Uber by drivers may continue as a class-action suit, while Uber told The Verge at the time that it will "most likely appeal the decision." Lyft is facing a similar lawsuit in San Francisco.
Lyft is focusing on the full spectrum of potential drivers
Lyft executives feel the service can comfortably accommodate full-time drivers even as they design and market it as something for every driver to use casually. Tali Rapaport, Lyft's vice president of product, said the company "thinks different features will be used by different drivers."
Yet Lyft is focused on targeting the full spectrum of drivers, she said. "We want driving to be aspirational so that as many people as possible as drivers," she said. "Our vision of the world is that you get into a car and turn on driver mode."
Update at 4:45 p.m.: Clarified that Hertz's Lyft partnership is a pilot program for now.