Lyft

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Lyft
Type Private
Industry Ridesharing
Founded 2012
Founder(s) Logan Green, John Zimmer
Headquarters San Francisco, USA
Key people Logan Green, John Zimmer
Website lyft.com

Lyft is a privately held, San Francisco–based transportation network company whose mobile-phone application facilitates peer-to-peer ridesharing by enabling passengers who need a ride to request one from drivers who have a car.[1][2] Unlike traditional taxis, Lyft drivers do not charge fares but instead receive "donations" from their passengers.[3] Lyft's tagline is "your friend with a car."[4] According to the company, Lyft generally costs about 30% less than the price of a similar-length cab ride.[5][6] Lyft currently operates in 19 US cities, including San Francisco, Los Angeles, San Diego, Sacramento, Seattle, Chicago, Washington D.C., Boston, Charlotte, Denver, Dallas, Atlanta, Baltimore, Phoenix, St. Paul, St. Louis, Indianapolis, Nashville, and Pittsburgh, with plans to expand both domestically and internationally.[2][7][8]

As of June 2013, Lyft had raised $83 million from Andreessen Horowitz, Founders Fund, Mayfield Fund, K9 Ventures, and Floodgate.[9]

History[edit]

Lyft’s distinctive pink mustache

Lyft was launched in the summer of 2012 by Logan Green and John Zimmer as a service of Zimride, a ridesharing company the two founded in 2007.[4] Zimride focused on ridesharing for longer trips, often between cities.[9] Zimride helped build trust among drivers and passengers by facilitating rides through Facebook Connect.[10] This trust helped increase ridesharing's popularity, and ultimately propelled Zimride to become the largest rideshare program in the United States.[11] In doing so, Zimride achieved Green and Zimmer's goals of helping travelers save money, reducing carbon dioxide emissions, and helping bring communities together,[12] as some Zimride users even developed lasting friendships.[13]

Lyft was created by Green and Zimmer to bring the benefits of ridesharing to drivers and passengers traveling locally within cities.[14] From their experience with Zimride, Green and Zimmer realized that 80% of seats in cars on the road are empty.[9][15]

Similar to Zimride, Lyft requires all drivers and passengers to sign up with the service through their Facebook account.[16] Drivers and passengers rate each other on a five-star scale after each ride.[17] The ratings serve to establish driver and passenger reputations within the network.[17] Lyft aims to build a fun community[18] through, among other things, affixing a fuzzy pink mustache to the front of Lyft cars,[15] which the company says represents a smile.[19] Passengers are invited to sit in the front seat and to give the driver a fistbump, which is designed to evoke the experience of riding with a friend, or at least a fellow Lyft user, as opposed to a professional driver.[18]

Since its launch, Lyft has exploded in popularity,[17] growing to more than 100,000 registered users[20] and facilitating more than 30,000 rides per week within its first 12 months.[9] The service has more than 300 drivers in San Francisco alone,[21] who report earning as much as $30 to $35 an hour.[22]

In May 2013, Green and Zimmer officially changed the name of the company from Zimride to Lyft.[23] 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.[24] In July 2013, Lyft sold Zimride to Enterprise Holdings, the parent company of Enterprise Rent-A-Car, for the primary purpose of enabling the company to focus exclusively on the growth of Lyft.[25]

Safety[edit]

One key to Lyft's success has been establishing trust among its users.[17] Lyft claims that its safety precautions are more stringent than those performed by taxi and limousine companies,[26] and that it only accepts 6% of its driver applicants.[27] In addition to requiring every driver to join Lyft through their personal Facebook account and subjecting drivers to a five-star rating from passengers following each ride, the company carefully vets potential Lyft drivers[3] through the following screening processes:

  • Department of Motor Vehicles and criminal background checks[17]
  • In-person interviews by Lyft employees[17]
  • Vehicle inspections and a two-hour training and safety session[17]
  • Drivers must be 23 years or older and have had a driver's license for more than 3 years[1]
  • Zero tolerance drug and alcohol policy[19]

Although Lyft drivers are classified as independent contractors,[28] Lyft also insures each driver with a $1 million per-occurrence liability policy.[29] Any driver averaging less than a 4.5 star rating by users is dropped from the service.[3] The company believes that these safeguards, as well as its community focus, account for the facts that the service has earned the trust of its users and that the majority of its passengers are females aged 18 to 35.[30]

Lyft drivers often greet their passengers with a welcoming fistbump

Operation[edit]

To request a Lyft car, riders must download the Lyft app to their iPhone or Android-based phone, sign in through Facebook Connect, and enter a valid phone number and credit card details.[3] When a passenger wants a ride, he or she opens the app and sees a map displaying the locations of the nearest Lyft drivers. After tapping to request a ride,[31] the app shows the driver's name, his or her rating by past passengers, and photos of the driver and their car.[3] Next, the Lyft driver will arrive and likely greet the passenger with a welcoming fistbump.[32] After the ride is complete, payment is made through the app. The requested payment includes a pickup fee and a ride fee based on time and distance. The cost per mile and cost per minute vary by city, with a $5 minimum and a $5 cancellation fee.[33] The passenger can increase or decrease the dollar amount by tapping a virtual pencil to edit the donation.[18] The company takes a 20% cut of the fare.[34] Finally, a passenger must rate the driver before he or she can request another Lyft.[35] Drivers also rate passengers to help prevent abusive or unruly passengers, which increases driver safety.

Regulatory opposition and approval in California[edit]

Like many peer-to-peer startups, Lyft faces an uncertain legal and regulatory landscape, and has been criticized by entrenched commercial enterprises, including taxi services.[17] In the fall of 2012, the California Public Utilities Commission issued a cease and desist letter to Lyft (along with rideshare companies Uber and Sidecar) and fined each $20,000. However, in 2013 an interim agreement was reached that reversed those actions.[36] In September 2013, the CPUC unanimously voted to make the agreement permanent, creating a new category of service called Transportation Network Companies to cover Lyft, UberX, and Sidecar, and making California the first state to recognize such services.[37]

In June 2013, Lyft, Uber and Sidecar were served with cease and desist letters by the Los Angeles Department of Transportation. Despite this, all three companies continue to operate and offer their services in Los Angeles.[38][39]

Results and reception[edit]

San Francisco Mayor Ed Lee has proclaimed July 13 as Lyft Day. [40]

Beyond its fundraising and user adoption numbers, Lyft has received acclaim for creating a community that makes transportation a more uplifting and fun experience. Scott Weiss of Andreessen Horowitz said they ultimately decided to invest in Lyft because of its strong community and transparency.[24] He wrote in his blog, "Lyft is a real community — with both the drivers and riders being inherently social — making real friendships and saving money."[41] Techcrunch wrote, "You feel like you're in the car with a friend, and that's no mistake."[18] Adding further, "Whether it's bringing someone a sandwich for the ride or letting them choose the music in the car, Lyft drivers have their own budding community growing."[18] The Los Angeles Times wrote, "Lyft's marketing strategy, which is geared toward the young and technologically savvy, draws a relaxed and friendly demographic."[42]

Lyft faces competition from Uber, Sidecar and other car-service startups.[43]

References[edit]

  1. ^ a b Alsever, Jennifer (3 Oct 2012). "The "mega trend" that swallowed Silicon Valley". CNN Money. Retrieved 17 July 2013. 
  2. ^ a b Lawler, Ryan (31 May 2013). "Lyft Hits The East Coast With A Launch In Boston, Its First Big Post-Funding Expansion City". TechCrunch. Retrieved 17 July 2013. 
  3. ^ a b c d e Lane, Patrick (27 Oct 2012). "A Sense of Place". The Economist. Retrieved 17 July 2013. 
  4. ^ a b Farr, Christina (23 May 2013). "Lyft team gets $60M more; now it must prove ride-sharing can go global". VentureBeat. Retrieved 17 July 2013. 
  5. ^ Gannes, Liz (22 May 2012). "Zimride Turns Regular Cars Into Taxis With New Ride-Sharing App, Lyft". All Things D. Retrieved 17 July 2013. 
  6. ^ Fehrenbacher, Katie (22 May 2012). "Zimride launches mobile real time ride sharing via Lyft". Gigaom. Retrieved 17 July 2013. 
  7. ^ Baker, Chris (2 July 2013). "Is Lyft Too Cool to Go National". Fast Company. Retrieved 17 July 2013. 
  8. ^ "Mayor Kevin Johnson Welcomes Lyft to Sacramento". Lyft Blog. 8 November 2013. Retrieved 8 November 2013. 
  9. ^ a b c d Green, Tomio (23 May 2013). "Lyft Raises $60 Million As Ride Sharing Competition Heats Up". Forbes. Retrieved 17 July 2013. 
  10. ^ Kincaid, Jason (25 Mar 2009). "Zimride: A Carpooling Startup That Actually Makes Money". TechCrunch. Retrieved 17 July 2013. 
  11. ^ Boyd Myers, Courtney (16 Jun 2012). "2012: The Summer of Ridesharing with Zimride, Ridejoy, Carpooling and more". The Next Web. Retrieved 17 July 2013. 
  12. ^ Sierra Club Website (16 Jul 2008). "Young Eco-Entrepreneurs Launch Online Carpooling Community". Sierra Club Web. Retrieved 17 July 2013. 
  13. ^ Lyon, Cody (3 Aug 2012). "Zimride expands its ride-share business". Upstart Business Journal. Retrieved 17 July 2013. 
  14. ^ DaSilva, Peter (4 Jul 2012). "Car-Pooling Makes a Surge on Apps and Social Media". The New York Times. Retrieved 17 July 2013. 
  15. ^ a b Lynley, Matt (12 Sep 2012). "Meet Lyft, A Startup Trying To Change San Francisco's Decades-Old Transportation System". Business Insider. Retrieved 17 July 2013. 
  16. ^ Associated Press (4 Feb 2013). "Ride-hailing apps offer new way around town". USA Today. Retrieved 17 July 2013. 
  17. ^ a b c d e f g h Gustin, Sam (23 May 2013). "Lyft-Off: Car-Sharing Start-Up Raises $60 Million Led by Andreessen Horowitz". Time Magazine. Retrieved 17 July 2013. 
  18. ^ a b c d e Olanoff, Drew (17 Sep 2012). "Lyft's Focus On Community And The Story Behind The Pink Mustache/". TechCrunch. Retrieved 17 July 2013. 
  19. ^ a b "Lyft-Off: Celebrating One Year Together". Lyft Blog. 23 May 2013. Retrieved 17 July 2013. 
  20. ^ Farrell, Michael (1 June 2013). "Lyft is latest ride-sharing app to offer service in Boston". Boston Globe. Retrieved 17 July 2013. 
  21. ^ Hoge, Patrick (7 Dec 2012). "Lyft, SideCar grow as economic drivers". San Francisco Business Times. Retrieved 17 July 2013. 
  22. ^ Graham, Jefferson (26 Jun 2013). "Talking Tech - Taxi alternatives are on the move". USA Today. Retrieved 17 July 2013. 
  23. ^ Yeung, Ken (12 Jul 2013). "Lyft founders sell Zimride, their carpooling startup, to Enterprise Rent-a-Car's parent company". The Next Web. Retrieved 17 July 2013. 
  24. ^ a b Lagorio, Christine and Markowitz, Eric (23 May 2013). "Lyft's New $60M: How the Deal Went Down". Inc. Magazine. Retrieved 17 July 2013. 
  25. ^ Gannes, Liz (12 Jul 2013). "Lyft Sells Zimride Carpool Service to Rental-Car Giant Enterprise". All Things D. Retrieved 17 July 2013. 
  26. ^ Friedlander, Whitney (4 Feb 2013). "Lyft's Ridesharing Program Takes Off in Los Angeles. What Does It Mean for the Taxi Industry?". LA Weekly. Retrieved 17 July 2013. 
  27. ^ Das, Sumi (25 Jan 2013). "The tech that lets you rent out your bike or car". BBC World News. Retrieved 17 July 2013. 
  28. ^ "Lyft Terms of Service". Lyft Terms. 30 April 2013. Retrieved 17 July 2013. 
  29. ^ McBride, Lisa (9 Jul 2013). "Lyft enthusiasts rally to save LA rideshares". ABC News Los Angeles. Retrieved 17 July 2013. 
  30. ^ Primack, Dan (23 May 2013). "Why Andreessen Horowitz gave a $60 million Lyft". Retrieved 17 July 2013. 
  31. ^ Lawler, Ryan (18 Oct 2012). "Ride-Sharing Service Lyft Adds A Waitlist, Cancellation Fee, And More Drivers To Meet Growing Demand". Retrieved 17 July 2013. 
  32. ^ Chaey, Christina (12 Jul 2013). "Lyft Sells Its Zimride Ride-Matching Service To Enterprise". Retrieved 17 July 2013. 
  33. ^ <http://www.sfgate.com/technology/article/Lyft-expands-hours-adds-East-Bay-pickups-5100372.php/>
  34. ^ Alsever, Jennifer (3 Oct 2012). "11 sites that want to rule the share economy". Fortune Magazine. Retrieved 17 July 2013. 
  35. ^ Carlson, Nicholas (23 May 2013). "Lyft, A Year-Old Startup That Helps Strangers Share Car Rides, Just Raised $60 Million From Andreessen Horowitz And Others". Business Insider. Retrieved 17 July 2013. 
  36. ^ Lawler, Ryan (31 Jan 2013). "A Day After Cutting A Deal With Lyft, California Regulator Reaches An Agreement With Uber As Well". TechCrunch. Retrieved 17 July 2013. 
  37. ^ Geron, Tomio (9 Sep 2013). "California Becomes First State To Regulate Ridesharing Services Lyft, Sidecar, UberX". Forbes. Retrieved 23 Oct 2013. 
  38. ^ Tuttle, Brad (27 Jun 2013). "Rideshare Battle Shifts to L.A.: City Tells Uber, Lyft, SideCar to Stop Picking Up Riders". Time Magazine. Retrieved 17 July 2013. 
  39. ^ Rodriguez, Salvador (2 Jul 2013). "Lyft expands to San Diego amid cease-and-desist order in Los Angeles". Los Angeles Times. Retrieved 17 July 2013. 
  40. ^ "Lyft Day in San Francisco". Lyft. 13 July 2013. Retrieved 23 Oct 2013. 
  41. ^ Weiss, Scott (23 May 2013). "It's Time for Lyft off!". A16Z (The Scott Weiss Blog). Retrieved 17 July 2013. 
  42. ^ Gelt, Jessica (17 May 2013). "The Enabler: Getting a Lyft without a cab". Los Angeles Times. Retrieved 17 July 2013. 
  43. ^ Gallagher, Billy (6 Jun 2013). "John Zimmer Says Lyft Will Work With Sidecar, Uber To Fight Regulators In Wake Of LA Cease & Desist". TechCrunch. Retrieved 17 July 2013. 

External links[edit]

ftp://ftp.cpuc.ca.gov/carriers/PUCode226and5353.pdf