Lyft (NASDAQ:LYFT)
According to a report by Reuters, ridesharing startup Lyft (NASDAQ:LYFT) is increasing the service charge that its passengers pay to the business to offset rising insurance expenses. As a result, Lyft stock surged today.
A firm representative said that the average fee increase is less than fifty cents and that it covers the cost of insurance for drivers who use the platform.
According to the Lyft (NASDAQ:LYFT) spokeswoman who talked to the news source, “Lyft stock is suffering insurance inflation pressures,” and “we’ve nominally raised service rates to help offset these expenses.”
According to Reuters, which cited research conducted by YipitData, Lyft (NASDAQ:LYFT) raised its fares during the first week of October in virtually all of the areas in which it operates in the United States. The findings indicated a rise of around 60 cents in the typical cost.
Both Lyft (NASDAQ:LYFT) (headquartered in San Francisco, California) and its primary rival, Uber Technologies (located in San Francisco, California), have already implemented a fee increase because of increasing fuel prices (UBER). The gasoline cost was eliminated by Lyft stock one month ago. However, Uber said in June that it would continue to apply the fee “indefinitely.”
In early trading, Lyft stock increased over 5% to $12.35, while shares of Uber (UBER) increased nearly 5% to $25.94.
Both Lyft stock and Uber (UBER) took a hit the previous week after uncertainty arose regarding potential changes in the employment status of the company’s drivers as a result of a new proposal from the Biden Administration. The uncertainty was caused by the fact that drivers could be required to register as independent contractors rather than as company employees.
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The Lyft stock price goes up despite the company’s decision to hike service fees to cover increasing insurance expenses.
Featured Image – Megapixl © Plysuikvv
Author Shariq Khan 
