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updated 4/8/2014 1:48:42 PM ET 2014-04-08T17:48:42

This week, ridesharing service Lyft announced it is reducing prices by 20 percent across all markets.

The move comes on the heels of a fresh $250 million funding round from investors including Chinese ecommerce giant Alibaba.

In a post on the company's blog, Lyft wrote that while the new rates are being tested, "to provide our growing driver community with peace of mind," it will temporarily stop taking commissions from their drivers.

The company, known for its loyal community and whimsically-attired cars (the pink mustaches are tough to miss), currently offers its services in 30 U.S. cities. Prices vary based on location.  

Related: Alibaba Goes In On Uber Competitor Lyft's $250 Million Round

In most cities, Lyft still lets riders have the option to pay what they wish thorough a "voluntary donation" system, but it is no longer in use in California, nor in Seattle, where new regulations were recently passed on mobile and app-based transportation services. Mandatory Lyft prices  are currently set based on cost per mile and per minute, as well as a pickup free and a $1 insurance, or "Trust & Safety" fee.  

Lyft is not alone in trying to endear itself to customers and beat the competition through less expensive rides. Uber announced a similar initiative in January, cutting prices for its uberX service in 16 out of 24 cities, and Sidecar began offering a customization that lets users set their own rates in February http://www.entrepreneur.com/article/231705

Related: Uber, Lyft Expand Insurance to Cover Drivers Between Rides

Copyright © 2013 Entrepreneur.com, Inc.

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