7 On Your Side investigates Lyft's voluntary donations

7 On Your Side investigated ridesharing service Lyft?s voluntary donation policy in which passengers set their own price.
December 19, 2013 7:54:08 PM PST
You see them everywhere in San Francisco -- cars with the fuzzy pink moustaches. It's a quirky emblem for a rideshare service called Lyft. The company lets passengers set their own price, calling it a voluntary donation to drivers.

However, we've found that the donation may not be so voluntary after all. A viewer came to me saying she couldn't get a driver from Lyft to pick her up. She posted a complaint on Facebook and boy was she surprised at the company's reply.

It's the newest way to get around San Francisco. You tap a smartphone app and it hooks you up with a driver.

"Then it'll tell you how long it would take for the driver to get to you," said Karen Tse, while showing off the app.

Tse was a big fan of Lyft, one of these rideshare services. It's the one you can't miss, with those bright pink mustaches stuck to the hood.

"It's good because I was able to pay them my, what I think they deserve," she said.

Lyft is billed as "your friend with a car." Rides start with a fist bump. They end with a suggested donation displayed on your smartphone.

"If my tab came up to like $28, $25, then I would like deduct about $5," she said.

Tse says on long rides she often paid a little less than the suggested rate. The amount, quietly charged to her account. Then one day she noticed something odd.

"Every single time I went onto the app," she said. "It said no drivers available."

For months, Tse says she couldn't get a ride on Lyft. So she posted a complaint on the company's Facebook page and was shocked when Lyft replied.

"I feel like I was punished for not giving the suggested rate," Tse said.

Lyft said, "Prior low donations may make it difficult for you to be paired with Lyft drivers. If you'd like to adjust your donations, feel free to email."

Not only that, later Tse noticed a warning on her receipt. It said, "low donations may make it hard for you to get rides in the future."

"You're lowballing them so," Tse said, "So, yeah, that's why you're not getting picked up."

Yet Lyft emphasizes payments are all voluntary. In the terms of service it says, "You may elect to make a voluntary donation for the ride a driver has provided to you. The decision whether to make a donation and the amount of the donation is at your sole discretion."

Making payments voluntary is one way Lyft and other rideshare companies avoid regulation as limousine or taxi services. State regulators recently ruled the rideshares can be treated instead as "networking companies."

But Tse found out networking works both ways. She can decide what to pay, drivers can decide whether to pick her up.

"I feel pressure that oh well if I don't give the suggested rate from now on, then I'll be blocked," she said.

She contacted 7 On Your Side and we asked Lyft about this. The company did not respond to our request for an on camera interview.

However, a spokesperson tells us Lyft drivers are concerned about covering cost. They can set a threshold for accepting passengers based on their payment history.

For example, a driver may decide only to take passengers who have paid at least 90 percent of the suggested donations in the past.

Lyft matches those drivers with passengers who meet that threshold.

The spokesperson said passengers who don't pay will still get picked up; it just might take longer to find a willing driver.

Lyft also tells us the app was not blocking Tse's requests for rides. And in fact, when she tried the app recently, she did get a ride offer pretty quickly.

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