Lyft launched a new version of its app this week that emphasizes mobility offerings beyond ride-hailing. The app now allows users to compare the time and cost of transportation routes across mobility options, including public transportation, scooters, bikes, car rentals, shared rides, and traditional ride-hailing.
John Zimmer, the cofounder of Lyft, told Citylab that the interface changes convey the company’s “commitment to those other modes.” To include public transportation, for instance, Lyft mapped 80% of public transport routes in the US. The company also developed software to more accurately predict public transit arrival and departure times. To promote micromobility services, the mapping interface displays bike lanes in green. The changes come amid Uber’s announcements of similar micromobility and public transportation additions to Uber’s app
Lyft will steer some customers away from ride-hailing due to these changes, but that could help the company diversify its revenue streams. The new interface gives users more-visible alternatives to ride-hailing, with Lyft seeing a 50% increase in usage of modes outside of ride-hailing during a pilot of the new app.
This could steer the company away from reliance on ride-hailing. The ride-hailing segment may ultimately become less attractive to Lyft due to forces like the legislation passed in California, which would significantly increase the labor cost of drivers. Even outside of the legal landscape, micromobility could make Lyft more accessible from a price standpoint, as the expense of ride-hailing has limited its prevalence — Goldman Sachs projects that, between 2019 and 2030, ride-hailing will cost more than four times as much per mile compared with rental cars, public transport, and driving personal vehicles.
The changes that were recently announced reflect Lyft’s desire to drive subscription revenues by becoming a mobility platform rather than a ride-hailing service. Lyft has shifted away from the idea of finding a viable pay-per-ride, ride-hailing-centric business model.
Instead, the company said in a blog post that, “In our vision of the future, you’ll subscribe to a transportation service just like you subscribe to your cell phone plan or your content streaming plan.” Including public transportation in the app is therefore a necessary concession to make the platform viable as an all-in-one mobility solution. A subscription model would yield recurring revenue streams, and could allow Lyft to bow out of the ride-hailing market share war that created billions in losses for both itself and Uber.