Why wait for a cab when your friend with a car can give you a lift at your convenience? That’s the mindset that Lyft wants its customers to maintain as the ridesharing startup continues to penetrate urban neighborhoods across the US. Operating under Zimride, Lyft is an extension of the company’s broader carpooling platform and is offered exclusively through a mobile app. Having just received $60 million in VC funding, this startup has the resources to grow quickly over the next couple years.
So, how does it work? Through the mobile app, riders set a pickup location and are immediately provided with an estimated time of arrival for the nearest available driver. From there, riders submit a request for a lyft shortly followed by the acceptance of a nearby driver. Lyft then displays the phone number, vehicle picture and real-time location of the driver. Upon his/her arrival, riders are alerted via text message and are able to quickly identify the vehicle by Lyft’s trademark pink mustache on the front grill.
Drivers welcome their passengers with a fistbump and typically invite them to sit up front to mimic the experience of a casual carpool. The rider provides an address for their end destination and the lyft is underway. Lyft’s ride experience is notably different from a cab ride in that drivers sometimes offer water, gum and candy to passengers and almost always strike up conversation. With the company’s strong commitment to safety, it is rare to find a driver that drives faster than the normal flow of traffic.
Upon completion of the ride, no physical payment takes place. The rider’s credit card is charged after a ‘donation’ amount is specified by passenger based on ride quality. Riders and drivers rate one another, providing future riders and drivers with information on the two parties. The ‘donation’ payment method allows Lyft to charge substantially discounted fares and reflects their strategy of turning what was once your everyday cab ride into peer-to-peer ridesharing.
Lyft currently exists in San Franicsco, Los Angeles, Seattle, Chicago, Boston and San Diego and is rumored to be targeting Washington D.C. as its next market. In addition to the primary competition of SideCar and Uber, which operate under similar ridesharing models, Lyft competes with basic cabs and taxi-fetching apps such as Hailo. As one would expect, the ‘donation’ nature of Lyft’s revenue is pushing price-sensitive cab riders to the service and leaving more and more basic cabs empty.
This post is part of the Lyft Business Analysis series