Lyft feature offers a new way to pay for rides: cash
Lyft added a feature on Wednesday that offers customers a new way to pay for trips on the ride-hailing service: with cash. At around 35,000 partner retail stores, riders can turn their physical cash into Lyft ride credits.
Before this, the main way to pay for a Lyft ride was through connecting the app to a debit or credit card. People could turn cash into Lyft credits by purchasing a gift card. But Lyft says this is going to benefit families who need transportation but may not have a bank account.
“With this new payment option, Lyft is expanding transportation access to more riders, so they can get where they need to go even if they don’t have a bank account, credit, debit, or prepaid card,” a news release from Lyft said.
In the app's payment tab, riders can click the “add cash” button to put money onto their account. Riders can put money in their “Lyft Cash” account from their debit and credit cards on a one-time or regular basis.
But the app also offers the option to find a store where riders can load up their account as well. Riders show a barcode to their cashier and can then add up to $300 to their account at one time. There is a $30 minimum to add money to a Lyft account in store.
Lyft says the goal is to lend a hand to the 5.6% of households — 7.1 million — who don’t have a bank account, according to the Federal Deposit Insurance Corporation. In North Carolina, 3.4% of all households don’t have access to banking services.
The app notes that communities of color disproportionately lack access to banking and other financial services.
Tom Felke, associate professor of social work at Florida Gulf Coast University, says part of the issue is that many people haven’t been taught how to set up a bank account.
But also, many of these households work low-paid jobs where “the utilization of a bank account is not something that’s actually productive for them,” Felke said. That’s because having a bank account as a lower-income person can come with additional costs.
“When you start talking about having to put that money in a bank where people are living paycheck to paycheck, they're probably dropping under minimums on a monthly basis,” Felke said. “And now you're actually talking about individuals who are being charged for having a bank account.”
Felke hopes that the Lyft Cash program helps households get where they need to go without needing to own a car — which has significant up-front and yearly costs — while also being less time intensive than riding public transportation.
“I think a program like this really kind of splits the difference between, you know, kind of reducing some of that opportunity cost that comes along with using public transit and also reducing some of that actual financial cost that comes along with car ownership,” Felke said.