Lyft

Lyft logo

Lyft develops, markets, and operates a mobile app, offering vehicles for hire, motorized scooters, a bicycle-sharing system, and food delivery. The company is based in San Francisco, California, and operates in 644 cities in the United States and 12 cities in Canada. With a 30% market share, Lyft is the second-largest ridesharing company in the United States after Uber.

Quick Fact

Summary

  • Ranked #5,090th worldwide
  • Active users 12.5M
  • Type Sharing Economy Networks
  • Launched date Jun 9, 2012
  • Employees 4,675
  • Headquarters San Francisco, California, U.S.
  • Parent company Lyft, Inc.

Founders

person
Logan Green New York
person
JohnZimmer

Networks

  • Brand value In 2020 N/A
  • Revenue in 2020 $2.364 B
  • Net loss In 2020 $1.752 B

Criticism

Treatment Of Drivers

Classification as independent contractors

Unless otherwise required by law, drivers are generally independent contractors and not employees. This designation affects taxation, work hours, and overtime benefits. Lawsuits have been filed by drivers alleging that they are entitled to the rights and remedies of being considered "employees" under employment law. However, drivers do receive certain flexibilities that are not common among employees.

Compliance with minimum wage laws

In some jurisdictions, drivers are guaranteed a minimum wage, such as in New York City, where drivers must earn $26.51/hour before expenses or $17.22/hour after expenses. Analyses have shown that absent such laws, many drivers earn less than the stated minimum wage.

A May 2018 report by the Economic Policy Institute found the average hourly wage for drivers to be $9.21. Reports of poor wages have been published in Profil, Trend, and The Guardian. A 2017 report claimed that only 4% of all Uber drivers were still working as such one year after starting, primarily due to low pay.

However, a 2019 study found that "drivers earn more than twice the surplus they would in less-flexible arrangements."

Safety concerns

Crimes have been committed by rideshare drivers 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. The latter led to the murder of Samantha Josephson and the introduction of Sami’s Law.

Lawsuits claim that rideshare companies did not take necessary measures to prevent sexual assault. Rideshare companies have been fined by government agencies for violations in their background check processes. 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 and that Lyft attracts drivers that plan to prey on vulnerable women.

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.

Ridesharing has also been criticized for encouraging or requiring phone use while driving. To accept a fare, drivers must 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.

Dynamic pricing and price fixing allegations

Due to dynamic pricing models, prices for the same route may vary based on the supply and demand for rides at the time the ride is requested. When rides are in high demand in a certain area and there are not enough drivers in such area, fares increase to get more drivers to that area.

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.

Accessibility failuress

Ridesharing has been criticized for providing inadequate accessibility measures for disabled people compared to the public transit it displaces.

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.

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.

Unwanted text messages

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

Original Idea

original ideaoriginal idea

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 they founded in 2007.

Green had the inspiration for Zimride after sharing rides from the University of California, Santa Barbara campus to visit his girlfriend in Los Angeles. He had used Craigslist’s ride boards but wanted to eliminate the anxiety of not knowing the passenger or driver.

When Facebook opened its API to third-party developers, Green said he thought "Here’s the missing ingredient." Zimride linked drivers and passengers through the Facebook Connect application. By using Facebook profile information, student drivers and passengers could learn about each other.

Zimride eventually became the largest carpool company in the United States. Green was introduced to John Zimmer through a mutual friend and the pair initially met on Facebook. The company name came from the country Zimbabwe, where, during a trip in 2005, Green observed locals sharing minivan taxis. Zimride launched at Cornell University, where, after six months, the service had signed up 20% of the campus.

Brief History

2012
Jun Lyft was launched.
2013
Mar The company officially changed its name from Zimride to Lyft.
Junl Lyft sold Zimride to Enterprise Holdings, the parent company of Enterprise Rent-A-Car, to enable the company to focus exclusively on the growth of Lyft.
2014
Mar Lyft hired two lobbying firms, TwinLogic Strategies, and Jochum Shore & Trossevin, to address the regulatory barriers and opposition it had received since its launch.
Aug The company introduced a shared ride concept, which provides cheaper fares.
2015
Jan 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.
Dec Lyft became the first ridesharing company allowed to pick up passengers at Los Angeles International Airport.
2017
Dec Lyft expanded into Canada, with operations in the Greater Toronto Area, Hamilton, Ontario and Ottawa.
2018
Mar 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.

Nov Lyft acquired Motivate, a bicycle-sharing system and the operator of Capital Bikeshare and Citi Bike.
2019
Mar Lyft became the first ride-sharing company to hold an initial public offering raising $2.34B at a valuation of $24.3B.
2020
Apr Lyft laid off 982 employees and furloughed an additional 288 in an effort to reduce operating expenses and adjust cash flows due to the COVID-19 pandemic in the United States.
Dec Lyft announced that it will launch a multi-city U.S. Robotaxi service in 2023 with Motional.

Network Features

Lyft Passenger App Features

Book Discovery
																A man is using Lyft App. (via lyft.com)

The map

The Lyft app home screen is a map that shows where you are, where available Lyft cars are, and it allows you to select your pickup and drop off location. You can also select from different Lyft services on the map.

“Where are you going?” is a search bar in the center of the map that allows you to enter your destination. After you do, you’ll be able to select a level of Lyft service and modify your pickup and drop-off locations.

There are several different Lyft services, each with a different purpose for riders:

Lyft seats up to four passengers.

Preferred offers newer vehicles with more legroom, and highly-rated drivers.

Lyft XL is a minivan or SUV that seats up to 6 passengers. More expensive than regular Lyft.

Lyft Shared (Temporarily unavailable due to Covid-19) pairs you with other Lyft passengers traveling along the same route. Split the cost of the ride. The cheapest Lyft service.

Lyft Lux is a high-end sedan that seats 4 passengers.

Lyft Black & Black XL is the most expensive Lyft option. New luxury sedans & SUVs with highly-rated drivers.

Prime Time surcharges

When the area is busy, Lyft may charge an additional surcharge called Prime time. If one of the Lyft services is currently under Prime Time pricing, it will have a small diagonal arrow symbol next to it. It’s easy to miss, so watch out.

Set your pickup location after selecting your service

After you enter your destination and select a Lyft service, you can set your exact pickup location by dragging the pin to wherever you want to be picked up, or by entering the address in the “Location” text box. If you want to be picked up from your current location, don’t move the pin. To move the pin back to your current location, tap the target icon in the lower right corner and the pin will reset to your location.

Select a destination to see an up-front price estimate

Lyft will show you an up-front price after you set your destination. The best way to get a Lyft fare estimate is to simply enter your pickup and dropoff location and see what pops up. You can also add multiple stops if riders in your group plan to hop off the ride before the final destination.

Select a destination to see an up-front price estimate

The Get a ride button sends you to the home screen.

The Notifications section lets you know about promos, offers, or account-related issues.

The Free Rides section shows you how you can get free rides by referring new passengers to the app.

The Ride History section is a list of recent rides you’ve taken. See how much you paid, request a fare review, or try to a find a lost item.

The Payment area allows you to add and remove payment methods. You can also set a default payment method.

The Promos section is where you to enter a Lyft promo code to get a free ride.

The Help area shows your most recent ride, and links you to support articles at Lyft.com that aim to answer your questions.

The Settings area allows you to see your account information. You can also add shortcuts, like a Home or Word address.

Lyft Driver App Features

Book Discovery
																Lyft driver app. (via lyft.com)

The Lyft Driver app is a separate app that Lyft drivers use to give Lyft rides. You can use the Lyft Driver app to begin the application process if you’re not yet a driver. Otherwise, you can only log into the Lyft Driver app after you get activated as a Lyft driver.

The Lyft Driver app is mostly intended to be used for ride requests. If you want more detailed looks into your pay, your profile, and your vehicle, the dashboard at Lyft.com/login is more in depth.

Home tab

There are four main tabs in the Lyft driver app: Home, Earnings, Mail and Referrals.

The Go Online button is at the top of all tabs. Once you’ve tapped this button, you’ll be able to receive and accept ride requests.

The map shows Prime Time surge areas that are color coded to show how high the Prime Time surcharge is. The darker the pink color, the higher the Prime Time rate is.

Many markets now feature Personal Power zones, which offer a pre-determined bonus for entering an area highlighted on the map.

Sometimes on the home tab you’ll see an Updates overlay that has important alerts for you. I’ve seen alerts in the Updates box about tax info and a background check refresh.

The destination filter

The icon at the top-right corner of the home screen is the destination filter area. When you set a destination, you will only get rides that head toward the destination you set. You get 6 destination filters uses each day.

Earnings ($) tab

The earnings tab shows information about your daily and weekly ride earnings. You will be able to view reports for each day of the week, and from those reports you can get further information about individual rides.

Mail tab

The Mail tab shows updates from Lyft. Typically you’ll see links to helpful articles from Lyft about app updates, or notifications about Scheduled pickups available in your area.

Referrals Tab

The referrals tab displays your Lyft referral code and shows you how much you can earn by referring new drivers and passengers in your area. You may not be able to earn cash by referring new passengers in your area, so the Referrals tab is the best way to find out if you can, and how much you’ll earn if you do.

Lyft Driver app menu

The app menu in the Lyft driver app is different from the menu in the passenger app. The driver menu is more focused on ways to manage things important to your driver account like vehicle options and app settings.

The Dashboard section links out to the full lyft.com online dashboard. The Dashboard is the best place to manage your account and get support.

The Scheduled Pickups tab shows available scheduled pickups that you can accept and pickups you have already accepted.

The Vehicle section shows your active vehicle and allows you to switch to another vehicle profile if you have one. Tap your vehicle to view and modify your documents like insurance and inspection.

The Documents tab allows you to manage your personal documents and documents for your vehicle (insurance, inspection).

The Navigation area allows you to set navigation preferences. Choose Lyft navigation or a third-party app, and choose audio settings.

The Help section links you to the Help center, which contains support articles and ways to contact Lyft.

The Pay Info section allows you to view and update your banking info.

The Amp section links to the menu for the Lyft Amp, a bluetooth-enabled light that helps passengers see your vehicle.

The Settings area shows your profile info and allows you to adjust your navigation preference, toggle a high earnings alert, and more.

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