Ride-hailing company Lyft recently rolled out an update to its app that effectively makes it a one-stop transportation shop for residents of Santa Monica, Los Angeles, and Washington D.C., according to TechCrunch. Via the update, when Lyft users in these three cities open the app, they see personalized mobility recommendations based on the user’s location, past preferences, and other data.
Outside of ride-hailing, users can see recommendations for bike- and scooter-sharing and public transit services. Over the course of this year, Lyft has gradually diversified its portfolio of services. It now has scooter-sharing services up and running in six cities, a footprint it hopes to double by the end of this year, and the firm bought Motivate, the parent company of bike-sharing service Citibike.
Lyft’s app update caps off an impressive year for the firm, during which it drastically grew revenue, expanded its market share, and prepared to go public. In the first half of this year, Lyft earned $909 million in net revenue — nearly double its earnings over the same period in 2017.
This higher top line translated to a larger market share too — in late 2017 Lyft controlled only 22% of the domestic ride-hailing market versus Uber’s 74%, per estimates from credit card data aggregator Second Measure. Now Lyft has 29% of the US ride-hailing market, according to estimates from Second Measure, with Uber sitting at 69%.
To continue this momentum into 2019 and beyond, however, Lyft must press forward on several initiatives:
- For additional near-term gains, Lyft needs to extend its subscription offerings to other segments of its business, like scooters and bikes. At the same time that Lyft is advancing its services beyond ride-hailing, so is its primary rival. Uber bought JUMP Bikes earlier this year, has rolled out scooters in certain locations, and is reportedly considering a further commitment to micro-mobility by acquiring either Lime or Bird. To beat out its longtime rival, Lyft will have to out-maneuver Uber on the price or the quality of its services. Price-wise, Lyft could expand its existing ride-hailing subscription services, which gives consumers discounts on rides in exchange for a monthly fee. Lyft could, for instance, extend the subscriptions to Motivate bikes and its scooters, which could make its offerings more affordable than Uber.
- To position itself for the long-term, the ride-hailer should advance its partnership with Alphabet’s Waymo as soon as possible. Nearly a year and a half ago, Lyft and Waymo announced a wide-reaching partnership. At the time the companies said they planned to utilize Lyft’s wide footprint in the US to expand the tests of Waymo’s self-driving minivans. But thus far, the companies haven’t collaborated on any self-driving tests. Given Uber’s myriad of self-driving struggles and Waymo’s recent commercial launch of its autonomous taxi service, now is an ideal time for the firms to push ahead on this partnership. That could ultimately help Waymo scale up its self-driving project. There’s just one major sticking point: Waymo just launched a ride-hailing service of its own — the first autonomous one — and it’s unclear how Lyft will figure into its plans going forward.
- Lastly, Lyft may need to accelerate its international expansion efforts. The company’s most important market is the US by a wide margin — Lyft’s first and only international expansion was last November’s move into Canada. To build a viable business in 2019 and beyond, Lyft should set its sights on other international markets.