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Lyft is Changing its Driver Matching Algorithm
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Lyft is Changing its Driver Matching Algorithm

New algorithm prioritizes drivers that are older, have no accidents/insurance claims, don't touch their phone often and have an iPhone, according to The Rideshare Guy

AutoMarketplace NYC
Jan 3, 2021
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Lyft is Changing its Driver Matching Algorithm
automarketplace.substack.com

A recently published report confirms just how important insurance is to Uber and Lyft. According to The Rideshare Guy, Lyft recently changed its driver matching algorithm to benefit drivers that haven’t had previous accidents/insurance claims, are older and don’t touch their phone often (also mentioned those with cheaper cars to insure and an iPhone would get priority). This makes sense and should drive down insurance-related costs, a major cost item for both rideshare companies outside of NYC. The impact on the NYC rideshare market though may be more muted as it is the only American market where the driver (or fleet owner) is responsible for providing commercial liability insurance. I believe the most important factors to get priority for Lyft NYC continue to be (1) number of trips and (2) rating. If a TLC driver has a bad claims record they will effectively be pushed out of the industry via higher premium costs or companies unwilling to insure them.

Eventually, in the rest of the country, what I believe you’ll likely see is the creation of a new insurance product that shifts the total cost of insurance to the driver or vehicle owner. For example, a driver won’t buy a personal policy with Uber/Lyft covering commercial liability. The driver will buy one policy. This is why NYC is a tremendously profitable market for Uber and Lyft (i.e. they have minimal insurance costs). In 2021 you may finally see both companies report a quarterly profit, reduced insurance costs will be a big reason. 

The TLC Market Newsletter is written by Dawood Mian, Founder & CEO of TLC Market. He covers the NYC ridesharing industry and related news. Search TLC Market for cars, parts, tires, mechanics, reviews & more. Find great deals at TLCMKT.COM.

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Lyft is Changing its Driver Matching Algorithm
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