Ride-sharing apps Uber and Lyft both employ a form of surge pricing when demand for rides is high, but Lyft's new Happy Hour discounts mitigate some of that pain.
After all, when demand goes down, shouldn't prices come down with it?
Happy Hour doesn't kick in at a particular time or on a specific day--instead, when people aren't requesting as many rides, Lyft will knock 10 to 50 percent off your trip. You can tell when it's Happy Hour as soon as you open the app to look for nearby cars. Lyft is currently available in 24 cities across the U.S.
"We created Happy Hour as a straightforward way to keep Lyft busier for drivers and more affordable for passengers," the company said in a Tuesday blog post. "For instance, a driver who would normally have one ride per hour at $12 may now see two or more rides per hour at $9... with Happy Hour, Lyft's prices are fully dynamic, which is the way it should be."
Uber has also spoken of dynamic pricing in the past, but the only change to its surge pricing practices is a recent move to push out notifications when higher prices have dropped. Uber has taken a lot of heat in recent months over its surge prices, which can reach seven to eight times normal rates. To avoid that criticism, Lyft's own version of surge pricing, called Prime Time Tips, is capped at 200 percent of a fare. The company has said that it gives the extra cash directly to drivers.
Lyft isn't the only ride-sharing company to experiment with prices as the competition for fares heats up. Sidecar last month introduced a new marketplace that lets its drivers set their own rates. Potential passengers can then compare rides by price, type of car, or estimated arrival time. Sidecar hasn't disclosed whether the marketplace has boosted usage of its app, but a recent Wall Street Journal test pitted the three major ride-sharing apps--Lyft, UberX, and Sidecar--against each other and traditional taxis in six cities and found Sidecar was often the cheapest option. Lyft was never the cheapest option, but rarely the most expensive.