Lyft

Lyft, Inc. offers mobility as a service, ride-hailing, vehicles for hire, motorized scooters, a bicycle-sharing system, rental cars, and food delivery in the United States and select cities in Canada.[2][1] Lyft sets fares, which vary using a dynamic pricing model based on local supply and demand at the time of the booking and are quoted to the customer in advance, and receives a commission from each booking. Lyft is the second-largest ridesharing company in the United States after Uber.[1]

Lyft, Inc.
TypePublic
IndustryVehicle for hire
FoundedJune 9, 2012 (2012-06-09) (as Zimride)
Founders
HeadquartersSan Francisco, California, U.S.
Area served
  • United States
  • Canada
Key people
RevenueIncrease US$4.10 billion (2022)
Decrease US$−1.5 billion (2022)
Decrease US$−1.6 billion (2022)
Total assetsDecrease US$4.56 billion (2022)
Total equityDecrease US$389 million (2022)
Number of employees
4,419 (December 2022)
SubsidiariesMotivate
Websitelyft.com
Footnotes / references
[1]
Lyft's pink car mustache
Lyft's distinctive pink mustache was the first branding the company used until 2015 when it switched to a smaller, glowing magenta mustache that sits on a driver's dashboard.

History
A Lyft vehicle in Santa Monica, California, with the original grill-stache branding, since retired

Lyft was launched in the summer of 2012 by computer programmers Logan Green and John Zimmer as a service of Zimride, a long-distance intercity carpooling company focused on college transport that they founded in 2007 after Green shared rides from the University of California, Santa Barbara campus to visit his girlfriend in Los Angeles and was seeking an easier way to share rides.[3][4]

In May 2013, the company made the decision to change its name from Zimride to Lyft.[5] Later that year, Lyft sold the original Zimride service to Enterprise Holdings, the parent company of Enterprise Rent-A-Car, to enable the company to focus exclusively on the growth of Lyft.[6]

Lyft's marketing strategy included large pink furry mustaches that drivers attached to the front of their cars and encouraging riders to sit in the front seat and fist bump with drivers upon meeting.[7] In November 2014, the company distanced itself from the fist bump.[8][9] In January 2015, Lyft introduced a small, glowing plastic dashboard mustache it called a "glowstache" as an alternative to the large fuzzy mustaches on the front of cars. The transition was to help overcome the resistance of some riders to arrive at destinations, such as business meetings, in a car with a giant mustache.[10]

In April 2014, Lyft hired two lobbying firms, TwinLogic Strategies, and Jochum Shore & Trossevin, to address the regulatory barriers and opposition it had received since its launch.[11] Due to regulatory hurdles in New York City, the company altered its business model when establishing Lyft on the East Coast of the United States. Lyft's launch in New York City occurred on the evening of July 25, 2014, and, by the Taxi and Limousine Commission (TLC) and the approval of the Manhattan Supreme Court, only drivers registered with the TLC were permitted to drive Lyft-branded vehicles in New York City.[12]

In August 2014, the company introduced a shared ride concept, which provides cheaper fares.[13]

In December 2017, Lyft expanded into Canada, with operations in the Toronto, Hamilton and Ottawa metropolitan areas.[14]

In March 2018, Lyft partnered with Allscripts to create a platform allowing healthcare providers to arrange rides for patients who lack transportation to appointments. The service would be available to 2,500 hospitals, 180,000 physicians, and approximately 7 million patients.[15][16] Lyft acquired Motivate, a bicycle-sharing system and the operator of Capital Bikeshare and Citi Bike, in November 2018.[17][18] The company also announced plans to add 28,000 Citi Bikes and expand its service.[19]

In March 2019, Lyft became a public company via an initial public offering, raising $2.34 billion at a valuation of $24.3 billion.[20] The company set aside some shares to be given to long-time drivers.[21]

In March 2020, Lyft acquired Halo Cars which pays drivers to display digital advertisements on their vehicles.[22] In April 2020, Lyft laid off 982 employees and furloughed an additional 288 to reduce operating expenses and adjust cash flows due to the COVID-19 pandemic in the United States.[23] The company continued to offer scooters for rent in San Francisco, while Miami government asked Lyft to halt operations.[24]

In August 2020, Lyft partnered with rental car company Sixt to let users access rental cars. Most of the rental cars are owned and operated by Sixt, with 85 locations in the US.[25] Lyft receives commissions from rentals.[26]

In December 2020, Lyft announced plans to launch a multi-city U.S. robotaxi service in 2023 with Motional.[27] Lyft sold its self-driving car division to Toyota for $550 million in April 2021.[28][29] The division had partnerships with General Motors,[30][31] NuTonomy,[32] Ford Motor Company,[33][34] GoMentum Station,[35] and Magna International.[36] It also owned Blue Vision Labs, a London-based augmented reality startup, acquired in 2018 for $72 million.[37]

In April 2022, Lyft announced an agreement to acquire PBSC Urban Solutions, a Canadian bike-share equipment and technology supplier.[38] In November 2022, the company announced layoffs of approximately 700 employees, or about 13% of its staff.[39]

In March 2023, amid "a battered stock price," Lyft announced David Risher as its next CEO.[40]

In April 2023, it announced "significant cuts" to its more than 4,000 full-time, non-driver employees. The Wall Street Journal reported this would be about 1,200 workers, or 30%. This came after job cuts announced in July and November 2022.[41][42]

In May 2023, Lyft announced that it was adding a new airport pickup feature that will allow users to pre-order cars when they land instead of when they get to the passenger pickup area. Lyft officially launched it at Los Angeles International and Chicago O’Hare and expects to soon do the same at Austin-Bergstrom International Airport, JFK International, and Seattle-Tacoma International by the end of May.[43]

Investment history

In June 2013, Lyft completed a $60 million Series C venture financing round led by Andreessen Horowitz, bringing its total amount raised to $83 million. In July 2013, Lyft sold Zimride to Enterprise Holdings, the parent company of Enterprise Rent-A-Car, enabling the company to focus exclusively on the growth of Lyft.[44][45] In April 2014, Lyft completed a $250 million Series D financing round led by Coatue, Alibaba, and Andreessen Horowitz, bringing its total amount raised to $332.5 million.[46] In January 2016, Lyft announced the closing of a 1 billion Series F financing round led by GM, which contributed $500 million of the total, bringing its total amount raised to date to $2.01 billion.[47] On April 11, 2017, Lyft closed a $600 million Series G financing round which included investors such as Kohlberg Kravis Roberts and PSP Investments.[48] On December 5, 2017, Lyft announced a Series H financing round worth $1.5 billion led by Alphabet Inc.[49]

Criticism
See also: Sharing economy § Criticism, and Temporary work § Legal issues

Safety issues

Crimes have been committed by rideshare drivers[50] as well as by individuals posing as rideshare drivers who lure unsuspecting passengers to their vehicles by placing an emblem on their car or by claiming to be a passenger's expected driver.[51] The latter led to the murder of Samantha Josephson and the introduction of Sami’s Law. Ridesharing companies have been accused of not taking necessary measures to prevent sexual assault.[52][53] They have been fined by government agencies for violations in their background check processes.[54][55][56]In 2019, more than 34 women sued Lyft in the United States alleging that they were raped or assaulted by Lyft drivers, and that the company did not do enough to keep them safe[57] and that Lyft attracts drivers that plan to prey on vulnerable women.[58] Many women claim that, even after they reported their assault to Lyft, the company ignored their report and continued to allow the assailants to drive with Lyft.[59]

Ridesharing has also been criticized for encouraging or requiring phone use while driving. To accept a fare, some apps require drivers to tap their phone screen, usually within 15 seconds after receiving a notification, which is illegal in some jurisdictions since it could result in distracted driving.[60]

Ridesharing vehicles in many cities routinely obstruct bicycle lanes while picking up or dropping off passengers, a practice that endangers cyclists.[61][62][63]

Price fixing allegations

In the United States, drivers do not have any control over the fares they charge; lawsuits allege that this is an illegal restraint on trade in violation of the Sherman Antitrust Act of 1890. Rideshare companies have argued that they only connect riders and drivers, set service terms, and collect fares. This is the subject of Gill et al v. Uber Technologies, Inc. et al, a lawsuit filed in California.[64]

Insufficient accessibility

Ridesharing has been criticized for providing inadequate accessibility measures for disabled people, in violation of local laws.

In some areas, vehicle for hire companies are required by law to have a certain amount of wheelchair accessible vans (WAVs) in use. However, most drivers do not own a WAV, making it hard to comply with the laws.[65]

While ridesharing companies require drivers to transport service animals, drivers have been criticized for refusal to transport service animals, which, in the United States, is in violation of the Americans with Disabilities Act. In 2021, an arbitrator awarded $1.1 million to a visually impaired passenger who travels with a guide dog because she was denied rides 14 separate times.[66]

Bias against passengers in certain demographic groups

Complaints that drivers have not accepted ride requests from passengers in certain demographic groups has led some ridesharing companies to hide passenger identities until the ride request is accepted by the driver. A 2018 study in Washington, D.C. found that drivers cancelled ride requests from African Americans and LGBT and straight ally passengers (indicated by a rainbow flag) more often, but cancelled at the same rate for women and men. The higher cancellation rate for African American passengers was somewhat attenuated at peak times, when financial incentives were higher.[67][68]

Traffic congestion

Studies have shown that especially in cities where it competes with public transport, ridesharing contributes to traffic congestion, reduces public transport use, and has no substantial impact on vehicle ownership and increases automobile dependency.[69][70][71][72]

Dead mileage specifically causes unnecessary carbon emissions and traffic congestion.[73] A study published in September 2019 found that taxicabs had lower rider waiting time and vehicle empty driving time, and thus contribute less to congestion and pollution in downtown areas.[74] However, a 2018 report noted that ridesharing complements public transit.[75] A study published in July 2018 found that Uber and Lyft are creating more traffic and congestion.[76][77][78] A study published in March 2016 found that in Los Angeles and Seattle the passenger occupancy for Uber services is higher than that of taxi services, and concluded that Uber rides reduce congestion on the premise that they replace taxi rides.[79] Studies citing data from 2010 to 2019 found that Uber rides are made in addition to taxi rides, and replace walking, bike rides, and bus rides, in addition to the Uber vehicles having a low average occupancy rate, all of which increases congestion. This increase in congestion has led some cities to levy taxes on rides taken with ridesharing companies.[80]

A study published in July 2017 indicated that the increase in traffic caused by Uber generates collective costs in lost time in congestion, increased pollution, and increased accident risks that can exceed the economy and revenue generated by the service, indicating that, in certain conditions, Uber might have a social cost that is greater than its benefits.[81]

Legality of ride sharing

The legality of ridesharing companies by jurisdiction varies; in some areas they have been banned and are considered to be illegal taxicab operations.[82]

Unwanted text messages

In November 2018, Lyft settled a class action suit filed in 2014 alleging that the company had sent large numbers of unwanted commercial text messages.[83] In addition to $4 million in payments to consumers, the plaintiffs sought $1 million in legal fees.[84]

See also

References
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