Lyft

From Wikipedia, the free encyclopedia

Lyft, Inc.
TypePublic
IndustryVehicle for hire
FoundedJune 9, 2012; 9 years ago (2012-06-09) (as Zimride)
FoundersLogan Green
John Zimmer
HeadquartersSan Francisco, California, U.S.
Area served
United States, Canada
Key people
Logan Green, CEO
John Zimmer, President
Brian Roberts, CFO
RevenueDecrease US$2.364 billion (2020)
Increase US$−1.808 billion (2020)
Increase US$−1.752 billion (2020)
Total assetsDecrease US$4.678 billion (2020)
Total equityDecrease US$1.676 billion (2020)
Number of employees
4,675 (2020)
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.

Lyft, Inc. 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.[2]

With a 30% market share, Lyft is the second-largest ridesharing company in the United States after Uber.[3]

Product overview[]

Service is generally accessed via mobile app. Users set up a personal profile with a name, phone number, other information, and payment preference, which could be a credit card, e-commerce payment system or, in some cases, cash. After the service is complete, the customer may be given the option to provide a gratuity to the driver, which is also billed to the customer's payment method.

The status of drivers as independent contractors is an unresolved issue. Drivers provide a vehicle, which could be owned, rented, or leased. Drivers must meet requirements for age, health, car age and type, have a driver's license and a smartphone or tablet, and may be required to pass a background check. In many cities, vehicles must pass annual safety inspections and/or must have an emblem posted in the passenger window. Some cities also require drivers to have a business license.[4] There may be accommodations for hearing-impaired drivers.[5] Drivers may be notified before accepting a trip if it will be longer than 45 minutes. After each transaction, drivers and customers may rate each other and users with low ratings may be deactivated.[6]

Lyft provides basic vehicle insurance.[7]

Riders must download the Lyft mobile app to their smartphone, sign up, enter a valid phone number, and enter a valid form of payment (either a credit card, Lyft Gift card, or link to an Apple Pay, Google Wallet, or PayPal account).[8][9] Once the trip is completed, funds are debited from the funding source.[10]

Car rides[]

Depending on the location, Lyft offers various service levels including shared rides with other passengers traveling in the same general direction (suspended during the COVID-19 pandemic), private rides, or larger or luxury vehicles.[11]

Lyft scooter

Rental cars[]

In August 2020, Lyft began its partnership with rental car company Sixt in order to let users access rental cars through the "Rentals" tab in their app. Most of the rental cars are owned and operated by Sixt, a predominantly European company (German-owned) with 85 locations in the US.[12] For each car rental made through the app, Lyft will receive a commission. The program began as Lyft Rentals in 2019 with Lyft owning and operating its own rental fleet in Los Angeles and San Francisco.[13]

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 they founded in 2007.[14][15]

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."[16] Zimride linked drivers and passengers through the Facebook Connect application.[17] By using Facebook profile information, student drivers and passengers could learn about each other.[18] Zimride eventually became the largest carpool company in the United States.[19][20] 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.[21][22][23] Zimride launched at Cornell University, where, after six months, the service had signed up 20% of the campus.[24][25]

In May 2013, the company officially changed its name from Zimride to Lyft.[26] The change from Zimride to Lyft was the result of a hackathon that sought a means of daily engagement with its users, instead of once or twice a year.[27]

In July 2013, 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.[28]

Whereas Zimride was focused on college campuses, Lyft launched as a ridesharing company for shorter trips within cities.[18]

Lyft became known for the large pink furry mustaches drivers attached to the front of their cars. Riders were also encouraged to sit in the front seat and fist bump with drivers upon meeting.[29] In November 2014, the company distanced itself from the fist bump.[30][31]

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.[32]

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.[33]

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, in accordance with 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.[34]

In August 2014, the company introduced a shared ride concept, which provides cheaper fares.[35]

In December 2015, Lyft became the first ridesharing company allowed to pick up passengers at Los Angeles International Airport.[36]

In December 2017, Lyft expanded into Canada, with operations in the Toronto, Hamilton and Ottawa metropolitan areas.[37]

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.[38][39]

In November 2018, Lyft acquired Motivate, a bicycle-sharing system and the operator of Capital Bikeshare and Citi Bike.[40][41] The company also announced plans to add 28,000 Citi Bikes and expand its service.[42]

In March 2019, Lyft became the first ride-sharing company to hold an initial public offering raising $2.34 billion at a valuation of $24.3 billion.[43] The company set aside some shares to be given to long-time drivers.[44]

In April 2020, 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.[45] The company continued to offer scooters for rent in San Francisco, while Miami government asked Lyft to halt operations.[46]

In December 2020, Lyft announced that it will launch a multi-city U.S. robotaxi service in 2023 with Motional.[47]

Self-driving car research[]

In 2012, Green wanted to pitch investors on self-driving cars as part of Lyft's future offering. Green envisioned a few big networks of self-driving cars, similar to AT&T and Verizon.[48]

In January 2016, Lyft announced an autonomous car partnership with General Motors.[49] On May 5, 2016, Lyft and General Motors announced, as part of their partnership, that it planned to begin testing self-driving cars within the next year.[50]

On June 6, 2017, Lyft announced a new partnership with Boston-based autonomous self-driving car start-up NuTonomy to eventually put autonomous, on-demand vehicles on the road.[51]

In September 2017, Lyft partnered with Ford Motor Company to develop and test autonomous vehicles.[52][53]

In March 2018, Lyft partnered with GoMentum Station to test its self-driving technology.[54]

On March 14, 2018, Lyft partnered with Magna International to co-fund, develop, and manufacture autonomous vehicle systems to produce self driving technology that will be available to all car manufacturers.[55]

In October 2018, Lyft acquired Blue Vision Labs, a London-based augmented reality startup, for $72 million. This expertise is expected to help autonomous cars to extract useful information from street-level images.[56]

In 2021, Lyft's self-driving division was sold to Toyota.[57]

Criticism[]

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

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.[58] However, drivers do receive certain flexibilities that are not common among employees.[59]

On October 28, 2016, in the case of Aslam v Uber BV, the Central London Employment tribunal ruled that Uber drivers are "workers", not self-employed, and are entitled to the minimum wage under the National Minimum Wage Act 1998, paid holiday, and other entitlements.[60] Two Uber drivers had brought the test case to the employment tribunal with the assistance of the GMB Union, on behalf of a group of drivers in London.[61] Uber appealed to the Supreme Court of the United Kingdom; in February 2021, the court ruled that drivers should be classified as workers and not self-employed.[62] Uber drivers won the right to minimum wage, holiday pay, and protection from discrimination in the ruling. After losing three previous court cases, the company had appealed to the Supreme Court, arguing that its drivers were independent contractors.[63]

In March 2018, the Federal Department of Economic Affairs, Education and Research of Switzerland ruled that drivers should be classified as employees.[64]

In April 2018, the Supreme Court of California ruled in Dynamex Operations West, Inc. v. Superior Court that Dynamex, a delivery company, misclassified its delivery drivers as independent contractors rather than employees.[65] This ultimately led to California passing Assembly Bill 5 (AB5) on September 11, 2019, with a test to determine if a tasker must be classified as an employee and receive minimum wage protections and unemployment benefits. In December 2019, Uber and Postmates sued California, claiming AB5 is unconstitutional.[66] In 2020, they spent tens of millions of dollars[67][68] campaigning in support of California's Proposition 22, which passed, granting them a special exception to Assembly Bill 5 by classifying their drivers as "independent contractors", exempting employers from providing benefits to certain drivers.[69]

In November 2019, the New Jersey Department of Labor and Workforce Development determined that drivers should be classified as employees and fined Uber $650 million for overdue unemployment and disability insurance taxes.[70]

In March 2021, the UK Supreme Court ruled that Uber has to classify all of its drivers not as independent contractors but as workers, complete with the standard benefits. This includes minimum wage and holiday pay with other potential benefits depending on the contracts.[71]

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.[72] A May 2018 report by the Economic Policy Institute found the average hourly wage for drivers to be $9.21.[73] Reports of poor wages have been published in Profil,[74] Trend,[75] and The Guardian.[76] 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.[77]

However, a 2019 study found that "drivers earn more than twice the surplus they would in less-flexible arrangements."[78]

Safety concerns[]

Crimes have been committed by rideshare drivers[79] 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.[80] 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.[81][82] Rideshare companies have been fined by government agencies for violations in their background check processes.[83][84][85] 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[86] and that Lyft attracts drivers that plan to prey on vulnerable women.[87] 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.[88]

Because it increases the number of people riding in automobiles instead of safer forms of transportation, a study from the Becker Friedman Institute at the University of Chicago tied ridesharing to an increase in traffic fatalities, including pedestrian deaths.[89][90]

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.[91]

Ridesharing vehicles in many cities routinely obstruct bicycle lanes while picking up or dropping off passengers, a practice that endangers cyclists.[92][93][94]

It is unclear if rideshare vehicles are less or more safe than taxicabs. Major cities in the United States don't have much data on taxi-related incidents. However, in London, data from Transport for London shows that in 2018, there were 21 Taxi and Private Hire journey-related sexual offences where a driver was charged, involving 17 individual drivers. More than half of the drivers involved, 11, were Uber drivers, one was a licensed taxi driver, one an unlicensed driver and the rest related to drivers affiliated with other private hire vehicle operators.[95]

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.[96] 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.[97][98] In some cases, this resulted in extreme surcharges during emergencies such as Hurricane Sandy,[99] the 2014 Sydney hostage crisis,[100] and the 2017 London Bridge attack.[101]

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.[102][103]

Accessibility failures[]

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.[104]

While companies have strict requirements 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 one case, this resulted in a lawsuit, which was referred to arbitration.[105][106] The case was eventually ruled in favor of the visually impaired passenger, Lisa Irving, with Uber ordered to pay her out $1.1 million.[107]

Bias against minority passengers[]

Complaints that passengers in certain demographic groups were discriminated against by drivers have prompted services like Uber and Lyft to remove identity information from advertised rides. However, once a ride is accepted, the driver gets the name and photo of the passenger, along with other information. A 2018 study in Washington, DC, found that compared to other passengers, drivers more frequently cancelled rides for African American passengers and LGBTQ and ally passengers (indicated by a rainbow flag), but cancelled at the same rate for women and men. The higher cancellation rate for African American passengers (only) was somewhat attenuated at peak times, when financial incentives were higher.[108]

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.[109]

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.[110] In addition to $4 million in payments to consumers, the plaintiffs sought $1 million in legal fees.[111]

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