Ridesharing company Lyft is deploying a new strategy to draw users away from competitors and into its own cars by offering discounts to riders at off-peak times. The new program, called “Lyft Happy Hour,” offers discounts of 10 to 50 percent for riders at certain times.
The change comes at a time when high fares through surge pricing — done both by Uber and Lyft — has drawn ire among customers. While both companies maintain that surge pricing is tied to driver demand, talk of encouraging surge pricing to jack up fares for drivers hasn’t done any favors to sway consumers.
The goal of Happy Hour, which can be activated with the latest Lyft update, is to encourage more riders to engage with the service for small trips throughout the day, particularly during times when drivers are hunting for fares. It’s a theoretical benefit to drivers as well: Lyft is banking on more users engaging with Happy Hour, which means a greater volume of fares at traditionally slower times.
In short, Happy Hour is the foil to the company’s “Prime Time” surge pricing — an attempt to get riders to turn to Lyft at off-peak hours, knowing that a discount isn’t too far away. But the folks at Lyft said in an email that Happy Hour isn’t fixed for certain times: it’s tied to an algorithm that turns the service on when there are more drivers on the road than requests in the app.
In that respect, Happy Hour is a bit of a random lucky break that could be turned on only in places where demand is high — which means that it’s likely that places like Seattle (with its new cap on cars) won’t see it all too often.