Uber (UBER) and Lyft’s (LYFT) surge pricing practices have come under the scrutiny of lawmakers. A proposed bill in Washington state, Senate Bill 5600, seeks to cap surge pricing for these ride-hailing giants. This move comes in response to growing concerns about the fairness and transparency of these pricing strategies, especially after events like concerts and sports games when demand is high.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
State Bill Aims to Cap Surge Fares
Apart from regulating surge fees, the proposed bill aims to balance rider costs and driver compensation. The bill also includes provisions for designated pick-up zones and digital receipts with fare breakdowns.
Importantly, the state bill has passed the Senate Committee on Labor and Commerce and is awaiting a vote by the full chamber. A companion bill is also under consideration in the House.
Meanwhile, Uber and Lyft have criticized the proposal, stating that it will not help curb fares for passengers. Further, Uber said that the bill only limits the relationship between what the rider pays and what the driver gets, without setting an upper limit on rider fares.
Are Rideshare Price Hikes Driving Customers Away?
Recent reports suggest that rising rideshare prices may indeed be driving customers away. According to a survey conducted by Gridwise, an analytics app for ride-hailing drivers, over 72% of consumers said that they would reduce or stop using rideshare services if prices increased further. Further, the firm disclosed that the median price cost of trips with ride-hailing companies rose by 7.2% last year.
It is worth highlighting that the potential decline in demand is already impacting Uber and Lyft. Recently, both companies provided weaker-than-expected gross booking forecasts for the first quarter.
Overall, it would be reasonable to say that the outcome of this bill could greatly affect the ride-hailing scenario in Washington and would set an example for other states facing similar challenges.
Which Is Better, Uber or Lyft?
According to the TipRanks Stock Comparison Tool, UBER stock has a Strong Buy consensus rating, whereas LYFT stock has a Hold. Moreover, analysts forecast a 13% upside potential for Uber stock and a 25.3% upside for Lyft stock.
