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Lower pay and higher costs: The downside of Lyft's car rental program

Johana Bhuiyan, Los Angeles Times on

Published in Business News

It was an advertisement for Lyft that convinced Chris Berry to leave his small town and head to Nashville.

He could make a comfortable living driving for the ride-hailing service, the Craigslist post read, and Lyft would even rent him a car that met the company's specs.

So Berry, an Iraq war veteran who had struggled to find steady work since being laid off from an oil field in 2013, packed his bags and sold his 1998 Toyota Avalon to fund the move across the state.

Four months later, the car he rented from Lyft has become more than his source of income -- it was also his home. And Lyft was asking for it back.

When his planned Nashville accommodation fell through, Berry resorted to living out of the 2017 Nissan Altima he rented from Lyft for $240 a week. Despite driving 20 to 60 hours a week and giving an average of 45 rides, Berry couldn't afford to rent an apartment on top of what he owed Lyft.

In April, the car was towed after Berry parked overnight in a spot that blocked a business. It was hauled to an airport car rental lot operated by Hertz -- one of Lyft's rental partners. It took Berry two days to retrieve the vehicle, sleeping overnight in the airport terminal. Strapped for cash after missing a few days of driving, he couldn't reimburse Lyft for the $113 towing charge and the company demanded he return the car immediately.

 

"They put me in a very bad position," Berry said. "I'm now going to be homeless with no vehicle. And I haven't even been able to make enough money (with Lyft) to get ahead."

Lyft and its rival Uber have struggled to attract enough drivers to meet demand. As the companies have sought to expand their fleets, they have tried to recruit workers whose vehicles wouldn't pass company requirements -- or those who don't have a car at all. Both offer short-term car rental agreements to a range of people including those who might have poor credit or are desperately in need of a flexible stream of income.

According to regulatory filings, Lyft has "tens of thousands" of cars available to drivers in 30 cities across the U.S. for short-term rental. The company says those in its Express Drive program have earned more than $1 billion since its launch in 2016. As of March 2019, "more than 180,000 people" had rented a car through Express Drive, and two-thirds of those drivers did not originally have a car that qualified, according to a blog post written by Chief Operating Officer Jon McNeill.

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

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