Lyft is introducing a "more affordable sort of higher-end ride" in an attempt to offer ride-hail products that customers actually want, CEO David Risher said Wednesday during the company's third-quarter earnings call.
The move comes after Lyft has been successful, by some metrics, in regaining market share from Uber by slashing its ride-hail fares. In Q3, Lyft reported 22.4 million active riders, up from 21.5 million in the second quarter, and increased gross bookings of around $3.6 million.
Now that Lyft has brought on some new riders, the task ahead is to retain those customers. Risher thinks that "Extra Comfort," a new product that he teased during the earnings call, could tap a small segment of Lyft's ride volume today that has the potential to grow over time.
"The cars are newer, the drivers are more experienced. The legroom is a little bit bigger. You can choose a quiet ride, and so on and so forth," said Risher, noting that the product would be priced at $1 to $2 above normal rides. "You'Il see it if you open up your Lyft app today in almost all the country and tomorrow, even more."
Risher compared Extra Comfort to Economy Plus tickets offered by airlines, which he said are a "crazy profit driver" for that industry. The upgraded experience would also provide Lyft with a higher margin product to deliver slightly better economics.
The new product is in line with Risher's new goal for Lyft to prioritize higher-quality products. For Lyft, that means ditching shared rides, which the executive says isn't a great product for either drivers or riders.
Instead, Lyft is doubling down on products like Wait and Save, which gives customers a cheaper fare for agreeing to a more flexible pickup time, or its scheduled rides product, which has a premium price on it. Risher also teased a "strong commitment to reliability" on Lyft's reserved rides, particularly for people who use the feature for airport rides.
The idea behind these features is to present Lyft as a differentiated ride-hail product. The problem is that Uber is already doing many of these features at a larger scale, so it really just looks like Lyft playing catchup.
In terms of ride types, Uber offers Uber Comfort and Comfort Electric -- both are the same as Lyft's Extra Comfort, but Comfort Electric offers rides in luxury electric vehicles. In April, Lyft relaunched a feature that allows riders to request an electric or hybrid vehicle, Lyft Green, but it was initially only available to business travelers.