SAN FRANCISCO — Anyone reading the tea leaves on how the Trump administration may treat ride-hailing and self-driving car companies was just handed a bit more tea.
Lyft general manager Derek Kan may soon be nominated to join the Department of Transportation as under secretary of transportation for policy, according to Reuters report Thursday.
Between 2006 and 2010, Kan worked as an adviser to Senate Republican Leader Mitch McConnell, the husband of Trump administration transportation secretary, Elaine Chao. Kan also has been on Amtrak’s board for the past year.
“Derek is a valued member of our team and we wish him luck in whatever path he chooses,” said Lyft spokesperson Adrian Durbin.
The administration’s new DOT leaders have yet to put forward any major policy statements since taking the helm, remaining silent so far on outgoing DOT secretary Anthony Foxx’s September guidelines that would require self-driving car companies to report details of their progress to federal officials. So automakers have complained that such rules would be onerous and slow down development.
Chao, a Labor Secretary under President George W. Bush, has made comments in the past that are supportive of ride-hailing companies such as Lyft and Uber, praising them for helping create jobs and solving transportation problems. But her views on the coming age of autonomous cars remain largely unknown.
Dozens of companies that include major automakers and cutting edge tech companies are in a race to develop autonomous cars for ride-hailing fleets, with most setting a 2021 deadline for production.
That an Uber executive is not in the mix for an administration post comes as little surprise, given that Uber CEO Travis Kalanick abruptly quit President Trump’s business advisory council in January after riders protested Trump’s first immigration ban by starting a #DeleteUber social media movement.
Uber also is in the throes of a leadership crisis, with Kalanick on the hunt for a chief operating officer after a former employee criticized the startup, valued at $70 billion, as harboring managers who are sexist and discriminatory. Uber also is dealing with a lawsuit from Alphabet-owned Waymo (formerly the Google car project), which charges that the sensor technology it is using is based on stolen intellectual property.
Lyft President John Zimmer has portrayed his company as the anti-Uber, and in recent weeks has launched initiatives — such as allowing riders to round up their bill to the nearest dollar for charity — aimed to hammer home that point.
Lyft could have a friend in the administration if Kan were to join the department of transportation. But it already has a number of influential friends with access to Trump officials, including investor and Trump advisor Peter Thiel and General Motors CEO Mary Barra, whose company invested $500 million in Lyft. Reports suggest that the automaker has plans to deploy self-driving Chevy Bolts as Lyft autonomous vehicles.
Lyft and Uber are in fierce competition to own the U.S. market. Lyft recently closed a $500 million investment round that bumps its valuation up to $7.5 billion from $5.5 billion.
While consumers love the app-based convenience of both services, investors and analysts continue to puzzle over financial viability of the ride hailing business model, with some suggesting that the only way to profitability is to remove the most expensive part of the equation: the driver.