LYFT Inc is increasing the service fee its US riders pay directly to the company to cover higher insurance costs, the ride-hailing firm has said.

The increase averages less than US50 cents per trip nationally, a Lyft spokesperson said. The company pays for drivers’ insurance when they are working on its platform.

“Lyft is facing insurance inflation pressures, and we’ve nominally increased service fees to help offset these costs,” the spokesperson said in an e-mailed statement.

New data from YipitData showed Lyft increased its published service fee for rides in virtually all US markets in the first week of October, including around 150 markets except for New York.

The service fee went up by an average of about US60 cents, implying a 3 per cent increase in the cost of an average ride, and an 18 per cent increase in the service fee, said YipitData.

The service fee, which goes directly to Lyft, is an additional fee added on a per-ride basis that covers certain operating costs and safety measures such as insurance and background checks.

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Lyft added a US55-cent surcharge earlier this year that went directly to the driver to help drivers deal with the higher petrol prices that have been eating into their earnings. The programme was stopped in late September.

Lyft now offers up to 7 per cent cash back when drivers pay for fuel with Lyft Direct debit card.

“The price the consumer pays shouldn’t change very much on the basis of these two changes, but it might change the amount Lyft takes as revenue versus the amount the driver takes,” YipitData analysts said.

“Since the fuel surcharge went directly to drivers and the service fee goes directly to Lyft, it suggests that Lyft would take more of each fare, assuming no changes to the other fare components.” REUTERS