- Lyft's cheapest ride option, shared rides, is back, the company announced Thursday.
- The service returns on Monday in Chicago, Denver, and Philadelphia, with more cities to come.
- Uber loses too much money on UberPool to bring it back in full form, sources recently told Insider.
- See more stories on Insider's business page.
As the pandemic gradually recedes across much of the country, Lyft is bringing back its lowest-cost and least pandemic-friendly option: shared rides.
Starting on Monday, July 19, users in Chicago, Denver, and Philadelphia will be able to book a trip shared with one other rider heading in the same direction, Lyft said Thursday. The service will expand to other cities over time.
Both Lyft and its main rival Uber suspended shared rides in March 2020, as the pandemic took hold, to promote physical distancing. Now, as demand rebounds, Lyft is bringing it back. The offering could help Lyft serve more trips and attract drivers amid a massive shortage of ride-hailing drivers, many of whom may be holding out for higher pay and better working conditions.
Cheaper shared rides could also attract more users to Lyft's service as ride-hailing prices surge across the board, partially due to the lack of willing drivers. Uber fares in April cost 40% more than they did in April 2020, according to data from research firm Rakuten Intelligence.
The fate of Uber's complementary product, UberPool, hangs in the balance, people familiar with the matter recently told Insider. The company will bring it back, the people said, but it will be a shadow of what it once was, with lower discounts and limited routes. Uber at one point was losing $1 billion per year running the cheap service, two people familiar with the company's finances said.
Both ride-hailing giants are under pressure from investors to turn a profit after years of hefty losses. Uber, for its part, has leaned into pandemic-friendly alternatives like UberEats, which took off during the pandemic.
Lyft's shared rides are returning with some changes. Riders will have to wear a mask, and rides will be limited to two people. Eating and drinking are prohibited. The company is also adding the option to book a shared ride in advance for a lower fee.
Axel Springer, Insider Inc.'s parent company, is an investor in Uber.