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Lyft is a rideshare company, launched in the summer of 2012, that matches drivers with passengers that are in need of a ride. The founders, Logan Green and John Zimmer were both computer programmers and originally started Lyft, which was Zimride at the time, as a long-distance carpooling service for college students. Along with ride-sharing, Lyft now offers motorized scooters, rental cars, food deliveries, and a bicycle-sharing system. The service is currently used in over 600 cities across the United States and internationally speaking, in three major Canadian cities, Toronto, Vancouver, and Ottawa, and is waiting on approval for more. On the mobile app, riders search for a nearby ride and then book it, taking them from point A to B. On the drivers end, they get a notification when a user books a ride, and depending on convenience and availability, the nearby drivers can choose to accept or decline the rider. As of 2022, Lyft is the second largest ride-sharing company, behind Uber. Lyft is connected to each of the five categories of the Circuit of Culture: production, consumption, identity, representation, and regulation. Each of these relates to different aspects of the company and plays important roles within its operations and functionality.
Production:
The production of Lyft has entailed countless partnerships and major decisions. Through the years, Logan Green and John Zimmer have made big moves within the ride-sharing industry to keep Lyft competitive. Originally known as Zimride, the company started out offering long-distance ride-sharing between college campuses. Green first erected the idea when he was traveling in Zimbabwe and observed locals using crowdsourced carpool networks to get around (Greiner, McFarland, Sherman, Tse 2019). Zimmer, a carpooling enthusiast, saw a post on Facebook about Zimride, then connected with Green through a friend, marking the beginning of their relationship. In 2012 Lyft launched in San Francisco as a service of Zimride and offered short-haul, ride-sharing trips. Then in May 2013, the company dropped the name Zimride, renaming it Lyft, and shifted its focus primarily to short-haul ride-sharing.
Later that year Lyft cut ties and sold its private carpool business, Zimride, to the parent company of Enterprise Rent-A-Car, allowing Green and Zimmer to further the growth of Lyft. The first big expansion came in April 2014 when the company announced they were adding 24 locations and expanding to a total of 60 new cities, including New York City. Continuing this momentum into 2015, Lyft became the first ride-sharing company allowed to pick up passengers at the Los Angeles International Airport.
In January 2016, Lyft announced a partnership with General Motors to start testing self-driving cars. This partnership included a $500 million investment into Lyft in an effort to put out self-driving ride shares. Fast-forwarding to 2021, GM and Lyft’s new program is set to rely on all new technology that is being acquired as part of GM’s separate $1 billion purchase of a San Francisco-based developer of autonomous-driving technology, called Cruise Automation Inc. (Perrone 2021). Lyft’s next move came in 2017 when they expanded into Canada, operating in the Toronto and Ottawa metropolitan areas. Expansion for Lyft was and still is key to keep competing with their main rival, Uber. A further step was taken toward the development of self-driving vehicle technologies when Lyft teamed up with GoMentum Station. This deal allowed Lyft to test and develop its self-driving systems at GoMentum’s secure 5,000-acre testing facilities.
When 2018 rolled around, Lyft had some big plans, including purchasing Motivate, a bicycle-sharing system, and the operator of Capital Bikeshare and Citi Bike. Along with electric bikes, Lyft launched a fleet of electric scooters in Denver with plans to expand into other major cities (McFarland 2018). Partnering with Allscripts, Lyft created a platform that allowed healthcare providers to arrange rides for patients who lack transportation to appointments. This new service would be available to 2,500 hospitals, 180,000 physicians, and about 7 million patients.
Later, in March 2019, Lyft became a public company via an IPO, raising over $2.30 billion at a valuation of $24.3 billion. The year 2020 was a big year for Lyft as in March they acquired Halo Cars, which pays drivers to display digital advertisements on their vehicles, and formed a new partnership in August with rental car company Sixt, which allowed users to rent cars in the mobile app. Also in 2020, Lyft announced that it plans to launch a multi-city U.S. Robo-taxi service in 2023 with the company Motional. After relationships soured, in April 2021 Lyft sold its self-driving car division to Toyota for $550 million, which had partnerships with GM, Nutonomy, Ford Motor Company, GoMentum, and Magna international.
Consumption:
Nowadays, the global ride-sharing market is valued in the ballpark of $85 billion, which is expected to grow to $185 billion by 2026. Over 35% of Americans now use a ride-sharing app, up double since 2015. Ride-sharing services, like Lyft, have changed the way many Americans get around, especially young adults and those living in cities and suburbs. It is convenient for people living in busy cities/areas, who do not own a vehicle, to book a ride and get to their desired destination in a timely manner. Another popular way Lyft is used occurs when young adults of age go out drinking. After their night is over, they cannot drive due to being intoxicated, so they book a ride through the mobile app and can get home safely, and legally. As of 2022, Lyft has approximately a 29% share of sales in the U.S. rideshare market. A big chunk of their market share came when the Cancel Uber campaign was in full effect, increasing Lyfts share from 22% to 33%. In 2021, Lyft’s annual revenue topped $3.2 billion with 18.7 million active users (Iqbal 2022). In September 2018, Lyft reached the one billion ride milestone, which was huge for the company. However, service consumption is down overall from 2019 due to the COVID-19 pandemic. Every person was legally required to stay inside during the height of the pandemic, rendering Lyft useless for the time being. Since the removal of such mandates, Lyft’s usage rates have started to recover, but have not yet reached numbers prior to the pandemic. The average annual consumption per Lyft customer is $169, which is 31.58% less compared to Uber users, who spend $247 per year on the service. The Lyft rider app is downloaded, across IOS and Android, approximately 1.82 million times per month (Dean 2021).
Out of the drivers at Lyft, 95% of them drive for less than 20 hours per week and 96% of them also work a different job or are studying, alongside their job as a driver. Some are even business owners or full-time students. These drivers usually don’t work at Lyft full-time, rather, they use it as a “side hustle” to make extra money. The Lyft driver app is installed, on average, 120,000 times a month (Dean 2021).
Identity/Representation:
Since its founding, Lyft has been the underdog. Being in the shadows of Uber, Lyft has had to take extra steps to stay relevant. They have done this through extensive marketing and strategic partnerships. Lyft competes by mainly using community and culture (Talbert 2016). They wanted every ride to be friendly, fun and connected. Lyft started by creating a different experience compared to Uber’s traditional hierarchy. Instead of backseat riding with no communication, Lyft encouraged passengers to sit in the front seat and make conversation. This experience would put emphasis on friendship, quirkiness, and authenticity. At the same time Uber intentionally focuses on luxury and service, Lyft does the opposite by emphasizing normal people and community. Another thing Lyft does differently is seeing its drivers as its biggest assets. The company encourages its drivers to put their own touches on customer experience to make them happier. Lyft’s driver community is built by encouraging them to talk to each other and exchange ideas, along with a mentoring program.
Starting in May 2012 the company attached these large, fuzzy pink mustaches to the front of their vehicles, making them instantly recognizable. These fun, quirky mustaches were the brainchild of Ethan Eyler, the founder of Carstache. Eyler sold a number of decorations to Green and Zimmer and eventually joined Lyft as a brand manager. On April 9th, 2015, Lyft added a big name to their team, Rex Tibbens, who was the former vice president of Amazon logistics. Tibbens came on as the new chief operating officer. A big step for the brand came later that year in July, when Lyft partnered with Starbucks, more specifically their rewards program. Lyft drivers could now become gold members in the Starbucks loyalty program and passengers could earn points with each ride. One of Lyft’s most notable partnerships came in the shape of mouse ears. At the Walt Disney World Resort Lyft powered Disney’s “Minnie Van” service which saw vehicles decorated in Minnie Mouse patterns and driven by popular characters. Lyft users that were staying at select hotels could call rides and travel to destinations on park grounds.
In recent years Lyft’s strategies have shifted. In order to survive they had to keep up with the extreme pace and adapt to the times. The first difference is those big, fluffy pink mustaches are gone. Lyft wanted to expand to include more people and their defining image, representing whimsy and fun, turned some people off. Instead of having the mustaches on the front of a driver’s car, they have a small, glowing pink mustache on the dash. Another major difference is how passengers interact with the drivers. Instead of sitting in the front seat, most riders sit in the back. Sometimes the driver and rider talk, but it’s not expected anymore. Many drivers and passengers now work for and utilize both Uber and Lyft, depending on convenience. Rather than forcing a tradition, Lyft adapted and changed parts of its community to fit its users.
At Lyft, they take pride in having their communities actively represent their core values and everlasting journey. They want to be viewed as different and that is what sets them apart from competitors. The company wants to challenge conventions, take risks, and above all make an impact. They want their drivers and users to want to be themselves, live authentically, and trust their own voices. They want the consumer to remember that they belong there. Lyft, from the beginning, has asked its consumers to join them to actively change the face of transportation, within cities, in the app, and further. The developers listen to what their numerous, and diverse communities have to say and make updates on this basis. Lyft is driven by its communities, which is the very thing it tries to represent the most.
Regulation:
Being responsible for both its drivers and passengers, Lyft keeps a close eye on its regulations and maintains high safety standards. They take countless measures to keep everyone in their communities safe. Stating in the mobile app, Lyft has a 24/7 support hotline implemented that puts you in contact with their support team if you encounter any issues on or off the road. If there is an emergency, you have the ability to contact 911 directly from the app. The company has a smart trip check-In feature that monitors rides for unusual activity, including long stops or route deviations (Lyft 2022). If anything seems off, they make contact to see if any help is needed. Passengers can also add their trusted contacts to their safety settings, which allows them to see where you are in real-time. Once a passenger is matched with a driver, on both sides, they can see each other’s name, profile picture, and rating. if there is an issue on either side, the ride can be canceled.
Every Lyft driver must meet a certain set of criteria in order to work for the company. The minimum age requirement to drive with Lyft ranges from 21-25, varying by region (Lyft 2022). Lyft conducts extensive criminal background checks as part of the application process, which requires drivers to provide a valid social security number. After passing the initial check, drivers are required to pass an annual background check and are continuously monitored for criminal convictions. When it is necessary, Lyft can deactivate drivers who do not uphold the standard. To be eligible in the first place, potential drivers must have a valid driver’s license, valid plates with current registration, and valid insurance with their name on the policy. There are also certain vehicle standards that are required for a driver’s vehicle to be eligible. Some of these standards include a vehicle having four doors and a minimum of five seatbelts (maximum of eight).
Lyft has company policies that apply to both riders and drivers alike. First of all, there are no alcohol, cigarettes, weapons, or any illegal substances allowed in the car, whether you are driving or riding. At Lyft, they always try to treat each other with respect and don’t tolerate discrimination. Also, minors must be accompanied by an adult, at least 18 years of age, to ride. Anyone who violates these policies could be permanently removed from the platform.
Lyft is still a relatively young company and has a bright future ahead of them. By constantly changing to accommodate its consumers and exploring new horizons, Lyft will continue to stay relevant and competitive within a tough market.
References:
Dean, Brian 2021. “Lyft 2022 User and Revenue Stats” BACKLINKO, March 29, 2021. https://backlinko.com/lyft-users#lyft-driver-stats
Greiner, Andrew. McFarland, Matt. Sherman, Ivory. Jen Tse 2019. “A History of Lyft, from Fuzzy Pink Mustaches to Global Ride Share Giant.” CNN Business, March 28, 2019.https://www.cnn.com/interactive/2019/03/business/lyft-history/index.html
Iqbal, Mansoor 2022. “Lyft Revenue and Usage Statistics.” Business of APPs, September 6, 2022. https://www.businessofapps.com/data/lyft-statistics/
McFarland, Matt 2018. “Lyft launches a scooter service. Uber is close behind.” CNN Business, September 6, 2018. https://money.cnn.com/2018/09/06/technology/lyft-scooters-denver-uber/index.html
Perrone, Alex 2021. “GM & Lyft Work Together to Put Out Self-Driving Ride Shares.” Endurance, April 28, 2021.https://www.endurancewarranty.com/learning-center/tech/gm-lyft-self-driving-ride-shares-volt/
Talbert, Molly 2016. “What Makes Lyft Different.” Higher Logic, May 25, 2016. https://www.higherlogic.com/blog/what-makes-lyft-different/
“Lyft History: Founding, Timeline, and Milestones.” 2020. Lyft History: Founding, Timeline, and Milestones. https://www.zippia.com/lyft-careers-29995/history/.“Driver Requirements.” Lyft Help. Accessed December 2, 2022. https://help.lyft.com/hc/e/all/articles/115012925687-Driver-requirements