Lyft joins the long list of companies laying off employees in preparation for what it calls a “probable recession.”
According to Fast Company, Lyft CEO Logan Green and President John Zimmer called employees to an all-hands meeting.
“We’re facing a probable recession sometime in the next year and rideshare insurance costs are going up,” the executives wrote in an email announcing the meeting. “We worked hard to bring down costs this summer: we slowed, then froze hiring; cut spending; and paused less-critical initiatives. Still, Lyft has to become leaner, which requires us to part with incredible team members.”
“We are not immune to the realities of inflation and a slowing economy. We need 2023 to be a period where we can better execute without having to change plans in response to external events — and the tough reality is that today’s actions set us up to do that,” Zimmer and Green added. “It’s our responsibility to take ownership of these decisions and, in the end, protect the future we’re building for the drivers and riders we serve.”
The company says it will give workers 10 weeks of pay, assistance finding other jobs, and healthcare through April 2024.
Lyft — the popular ride-sharing service — has launched Lyft Media, a media and advertising platform.
Lyft is one of the leading ride-sharing services and sees an opportunity to expand its own advertising business and help partner brands reach more consumers. As the pandemic wanes, people are traveling more, opening the door to increased opportunity.
“Our vision is to build the world’s largest transportation media network, delivering value to advertisers while also elevating the platform experience for riders and drivers,” reads the company’s blog. “Over the past two years, we’ve been growing our media business and are excited to share more details about our products, new partnerships, and future plans.”
The company’s plan revolve around four advertising channels: Lyft Halo, Lyft Tablet, Lyft Bikes, and Lyft Skins.
Lyft Halo
Lyft Halo consists of rooftop-mounted screens that can display digital advertising. The concept is built around Lyft’s 2019 acquisition of Halo Cars.
Rather than generalized ads, Lyft Halo will display ads specifically tuned to the time of day and vehicle’s location, maximizing possible engagement. Brands will be able to track the performance of their ads, thanks to Lyfts attribution partners.
Lyft Tablets
Lyft Tablets are in-vehicle tablets that provide passengers with a way to monitor the progress of their journey, control the vehicle’s music, pay and tip the driver, and engage with partner branding.
In the company’s pilot program, “1 in 4 engaged with the tablet during their ride, and 98% rated the experience as positive or neutral. And for drivers, tips increased by an average of 28% per ride while using the tablet in Q4 2021.”
Lyft Bikes
Lyft Bikes provide an easy way for customers to rent a bike rather than a traditional vehicle. Lyft is installing display panels at the bike stations, providing partners yet another way to engage with consumers.
The company already has 3,000 stations, 45,000 bikes, and serves 36 million rides annually, providing a significant opportunity to advertisers.
Lyft Skins
Lyft Skins provides a way for brands to interact with consumers via the Lyft App itself. DoorDash, Starbucks, HBO Max, Marriott, and Google are just a few of the brands that have already benefited from this channel, and the company is bringing more companies and brands onboard.
Lyft is clearly looking to capitalize on its position in the ride-sharing market to become a digital platform that provides value to consumers and brands alike.
Lyft co-founderJohn Zimmer is extremely confident the court ruling that found California Proposition 22 unconstitutional will be overturned on appeal.
“If you look at California Constitution we feel very confident in the way the ballot initiative was written,” says Lyft co-founder and President, John Zimmer. “The Attorney General in California agrees with us and was on our side in this lawsuit. As this goes through higher courts, the appeals court in California, we are extremely confident that the proposition will be upheld.”
“There is no change coming (to Lyft) out of that ruling,” adds Zimmer. “It will go on appeal and we’ll continue to work within the system of law and we are confident of the final outcome.”
“It’s hard to predict the legal process fully but we’re optimistic that within that (6 months) timeframe we’ll get a more final resolution.”
Uber, Lyft and other ride-share and gig economy companies were dealt a major blow, with a judge ruling Prop. 22 is “unconstitutional.”
Prop. 22 allows ride-share and gig economy companies to classify their workers as independent contractors, meaning the companies are not required to provide health insurance or benefits. The law’s passage was a major win for the companies, as California law was on the verge of classifying them as employees.
Superior Court judge in Alameda County, Judge Frank Roesch, has now put Prop. 22’s future in doubt, calling the law “unconstitutional,” according to Mashable. He said “it limits the power of a future legislature to define app-based drivers as workers subject to workers’ compensation law.”
Needless to say, Uber and Lyft will appeal the decision, meaning nothing will change immediately. However, Judge Roesch’s ruling is certainly cause for worry for the impacted companies, and good news for their “contractors.”
Lyft has announced Toyota subsidiary Woven Planet is acquiring its self-driving division, Level 5.
Autonomous driving is widely considered to be the next major evolution of the auto industry. Unfortunately, autonomous driving has been a difficult technology to crack for companies of all sizes. Tesla recently was called out by Consumer Reports for self-driving tech that’s easily fooled.
Meanwhile, Level 5 was launched in 2017, with the goal being to have a majority of rides happen in self-driving vehicles by 2021. Instead, Lyft is now selling off its self-driving division after failing to meet those goals. Woven Planet, Toyota’s autonomous driving division, is buying Level 5 for $550 million.
“Today’s announcement launches Lyft into the next phase of an incredible journey to bring our mission to life,” Lyft Co-Founder and CEO Logan Green said. “Lyft has spent nine years building a transportation network that is uniquely capable of scaling AVs. This partnership between Woven Planet and Lyft represents a major step forward for autonomous vehicle technology.”
“This acquisition assembles a dream team of world-class engineers and scientists to deliver safe mobility technology for the world,” James Kuffner, CEO of Woven Planet said. “The Woven Planet team, alongside the team of researchers at Toyota Research Institute, have already established a center of excellence for software development, automated driving, and advanced safety technology within the Toyota Group. I am absolutely thrilled to welcome Level 5’s world-class engineers and experts into our company, which will greatly strengthen our efforts.”
Congress, in a political payoff to unions, have again introduced legislation to effectively make gig economy jobs like Uber, Lyft, DoorDash, etc. illegal. The difference this time is that since they now control the House, Senate, and the Presidency it could very well pass. The legislation is modeled after the gig killing bill that was passed in California and that was later overturned via initiative by the people. Unfortunately, at the national level there is no initiative process to overturn Congress.
Despite the job-killing nature of the bill the Democrat’s press release sings its praises:
“Top Democrats Introduce Bill to Protect Workers’ Right to Organize and Make our Economy Work for Everyone. Legislation addresses growing income inequality by protecting workers’ right to join a union and negotiate for higher wages and better benefits.”
The House bill was introduced by House Committee on Education and Labor Chairman Robert C. “Bobby” Scott (VA-03), Congresswoman Frederica Wilson (FL-24), Congressman Andy Levin (MI-09), Congresswoman Pramila Jayapal (WA-07), and Congressman Brendan Boyle (PA-02).
The Senate bill was introduced by Senate Committee on Health, Education, Labor, and Pensions (HELP) Chair Patty Murray (D-WA) and Majority Leader Chuck Schumer (D-NY).
The bill mimics the California bill which Uber CEO Dara Khosrowshahi said would effectively end Uber as we know it in California. The company is already losing money and it would be impossible for it to pay a minimum wage of $15 an hour plus benefits to all of its 1 million drivers. It also begs the question, does the Democrat party not realize that the very people who love Uber and who are independent contractors for Uber probably are also majority Democrat voters? After all, the gig economy was popularized by liberal San Francisco based Uber itself.
Without an initiative process at the national level, the only way to keep the millions of gig jobs alive and to keep rideshare and food delivery readily available would be for their voters to vote the majority party out of office. There really is no middle ground here. In the meantime, if this bill passes Congress and is signed by Biden the gig economy will become illegal.
Driverless tech company Motional has announced it will use Hyundai’s IONIQ 5 for its robotaxi deal with Lyft.
Motional and Lyft signed “the world’s largest robotaxi deployment partnership.” Beginning in 2023, Lyft customers will be able to book a Motional robotaxi, instead of a traditional Lyft.
The company, which was founded by Hyundai Motor Group and Aptiv, plans to use Hyundai’s IONIQ 5 midsize electric crossover.
The futuristic IONIQ 5 is an all-electric, midsize crossover utility vehicle designed for the passenger experience. With a unique and luxurious living space and a sleek, modern exterior, Motional and Lyft riders will experience their fully autonomous rides in comfort and style. Built on Hyundai’s dedicated battery electric vehicle (BEV) platform, the IONIQ 5 delivers innovation in both mobility and sustainability.
Motional emphasizes the vehicles it will use are not the consumer version of the IONIQ 5, but ones with its Level 4 autonomous software integrated in. Autonomous driving software is graded from Level 0 to 5, with 5 being completely autonomous vehicles that never require human involvement.
“What we’re expecting is that other states might have otherwise been teed up to try to replicate AB5,” says Lyft’s Chief Policy Officer Anthony Foxx. “What we want to do is engage in discussions with leaders of states who maybe had considered that and to try to talk about a different model, a different way to pursue what we all want. We want to make sure that the drivers are well taken care of, not only when they’re driving but before and after. Also, we want to make sure there’s clarity and certainty in this industry so that it’s not living under a cloud.”
California Assembly Bill 5 (AB5), was overturned by the people in regards to ridesharing with the passage of Proposition 22 Tuesday. AB5 was passed by the Democrat-controlled state legislature and signed by California Governor Gavin Newsom in September 2019 as a favor to both the taxi industry and unions who heavily finance Democrat campaigns. AB5 required companies that hire independent contractors to reclassify them as employees. The bill would have made it financially impossible according to Uber and Lyft for them to operate in California. Unfortunately, Proposition 22 did not change AB5’s ban on independent contractors in other industries.
Lyft’s Chief Policy Officer Anthony Foxx Hopes To Finally End ‘Living Under a Cloud’
“This was massive in terms of almost an existential business risk to these models in terms of the gig economy,” says Dan Ives of Wedbush Securities. “It could have been a $500 million incremental expense to Uber a $150 million for Lyft. In my opinion, they’re really popping the champagne today because this was really a best-case outcome. It was a dark cloud over the gig economy in these stocks and I think worth potentially 15 to 20 percent to ultimately where I see the valuations.”
“What was really the crux of the issue is the worry of the street that this was going to be a pandora’s box situation, a ripple effect across cities and states,” added Ives. “The fact that the voters in California approved this was really a seminal moment. From the beginning, really the last year and a half, it’s been a head-scratcher in terms of what this could have done not just to the gig economy. Of the hundreds of drivers that we’ve talked to, 95 percent of them were against the AB5. This is definitely a sigh of relief early this morning for investors as well as for the drivers themselves.”
Dan Ives: This was an existential business risk to these models in terms of the gig economy.
California’s Proposition 22 is poised to pass, securing the current business model for gig economy companies.
California has tried to reclassify gig economy companies, such as Uber, Lyft and Doordash. The state previously passed legislation requiring the companies to classify their workers as employees, rather than independent contracts. Changing how their employees are classified would have a profound impact on the companies’ and their bottom line, as they would have be required to withhold taxes and provide benefits.
The companies tried fighting the legislation in court, but were unsuccessful. This left Proposition 22 as their best chance to continue operating in the state under their current business model.
The ballot, which had the most expensive campaign of any ballot measure in California history, is poised to pass by a comfortable margin. The fight over gig workers has been closely watched across the country, and will likely help set a precedent for how these companies will continue to operate.
Uber and Lyft have been dealt a major blow, as an appellate court has ruled the injunction against them was appropriate.
Uber and Lyft have been locked in a battle with California over the status of their drivers. California is trying to force the two companies, and other similar gig economy businesses, to treat their workers as employees, rather than independent contractors. This would provide them with benefits which, in turn, would significantly raise the cost of doing business.
In August a judge issued an injunction against the two companies, prohibiting them from operating until they had complied with the new regulation. The companies used the 10-day window they were granted to appeal, but the First Appellate District Court in San Francisco has ruled the injunction was appropriate.
“Not only is this a victory for the tens of thousands of Uber and Lyft drivers working to put a roof over their heads and food on the table, this ruling is about fairness, making it clear that these companies must stop shifting their costs onto the taxpayers while their CEO’s profit,” said Mike Feuer, Los Angeles City Attorney, according to Business Insider.
This makes the Proposition 22 ballot the best hope for the companies to continue doing business as they have. It’s a safe bet that should Proposition 22 fail, other states may look to follow California’s example.
“The impact of the pandemic to us in the broader market is rides being down about 50% now,” says Lyft co-founder and President John Zimmer. “They were down 75%. So we are halfway recovered across the board. That impacts individual drivers as well. If you look at how some drivers have shifted, we actually have higher driver earnings now per hour than even pre-pandemic.”
John Zimmer, co-founder and President of Lyft, discusses the impact of the pandemic on Lyft, noting that daily rides are still down by half since March 2020:
Lyft Rides Still Down 50%
Drivers 4 to 1 want to remain independent contractors and want to retain flexibility. Depending on the market, 80 to 90% drive less than 20 hours a week. We think there is a much better way forward than saying (in California) that everyone should become employees. That way forward is to say let’s retain the flexibility and let’s add more protections and benefits like we are pushing for in California.
The impact of the pandemic to us in the broader market is rides being down about 50% now. They were down 75%. So we are halfway recovered across the board. That impacts individual drivers as well. If you look at how some drivers have shifted, we actually have higher driver earnings now per hour than even pre-pandemic. There’s equilibrium between demand and supply, between riders and drivers.
Impact Of Lockdowns And The Virus Is Real
The impact to the broader economy and the impact with lockdowns and the virus is real for our business. Transportation is directly tied to people’s movement and the broader economy. That said, we’ve continually week over week seen incremental improvements going from negative 75% to now above 50%.
We see markets like Toronto back to 80% of where we were before. As countries get better and as states get better at living with the conditions we have because of the virus I see continued improvement. Driver earnings per hour are higher today than they were pre-pandemic. We are looking right now for more drivers.
Regulation Has Been Part Of Our History From Day One
Regulation has been a part of our history from day one. We are as much in the transportation business as we are in the technology business and transportation historically has been a regulated industry. Within our first year of operation, we worked with California regulators to create a new category for regulation.
It’s been part of our business and will always be part of our business. It’s part of how we think about the path to profitability but we are just moving forward on that path despite anything that is going to change around us in terms of regulation.
Largest Bike-Share Program In North America
We also have a diversified set of transportation that we offer. We have the largest bike-share program in North America with City Bikes in New York City and Bay Wheels in the Bay and Divvy in Chicago. Our bike systems are in many cases above where they were pre-COVID. They are a great way to get around and get some fresh air and not be next to someone else.
Lyft Co-Founder John Zimmer Says Rides Are Still Down 50%
“The ultimate solution for Uber and Lyft is autonomy,” says Loup Ventures Managing Partner Gene Munster. “If this employee model simply doesn’t work you are going to see these companies push even harder into autonomous systems simply eliminating the drivers. However, this will attract more competition. I think the two best companies positioned within that would be Google and their Waymo initiatives and also Tesla and how they are going to vector into the ridesharing market.”
Gene Munster, Managing Partner at Loup Ventures, discusses how California in forcing drivers to be employees may ultimately speed up the efforts of Uber and Lyft to go fully self-driving and thereby simply eliminate all human drivers:
What Would The Drivers Want?
Both Uber and Lyft are in a tight spot. There was reprieve today. But this topic is not over with this vote coming November 3rd and California’s influence that they can have with other states. If you put all of this together and think about if these changes to employees across the country, it could be a 15 percent increase (in costs). This is effectively their profit margins.
I do want to caution the voters of California and also some of the lawmakers on one aspect. What would the drivers want? Most of these drivers use both apps, both Lyft and Uber. If they are employees they likely will be restricted from jumping from app to app. That would cut down some of their rides and cut down what they will be paid on an hourly basis. I don’t think that the right path here is as clear for the drivers in simply becoming an employee.
Ultimate Solution For Uber and Lyft Is Autonomy
The ultimate solution for Uber and Lyft is autonomy. If this employee model simply doesn’t work you are going to see these companies push even harder into autonomous systems simply eliminating the drivers. One of the unique things about Lyft and Uber is it is a two-sided marketplace. They have drivers and riders. In an autonomous world you don’t need drivers. Essentially, that would leave Lyft and Uber with their key asset, their brands around movement. I think that is an asset but I don’t know if it is worth $55 billion.
What I really take away from this is that over the next few years there are going to be ups and downs related to this regulation. Longer term, we know where this is going. Cars should be autonomous for safety reasons and productivity reasons. Ultimately, ridesharing with Uber and Lyft is going to be fully self-driving. This topic we are discussing today is going to be largely irrelevant.
Lyft is already testing self-driving rides in Las Vegas
Google and Tesla Will Compete With Uber and Lyft
There are some key nuances to an autonomous ridesharing business model. As I mentioned, there is a two-sided marketplace. That’s really what makes Lyft and Uber special today. One of the sides of the marketplace, the drivers side of this, is under some pressure right now. But if we eliminate the drivers side then you don’t even have a marketplace. You are just trying to get consumers to ride. That opens up new competitors. There are about six of them that are trying to get there.
The autonomy option is a better option for Lyft and Uber than what they currently have with humans driving. For an investor it’s a more profitable option. However, ultimately it will attract more competition. I think the two best companies positioned within that would be Google and their Waymo initiatives and also Tesla and how they are going to vector into the ridesharing market.
I Would Put My Money On Lyft
Assuming their ballot initiative wins in November, I’m in the Lyft camp. This is partly because I like their focus just on the US and on ridesharing. I think that the Uber Eats business, while its had a tremendous tailwind, it will get progressively more competitive and it’s tougher to make money in that business.
Ultimately, if I had my choice I would put my money on Lyft. There is another X factor here. There is something subtle about Lyft’s culture. It is a more investor friendly culture and that influences my view.
Ultimate Solution For Uber and Lyft Is Autonomy, Says Loup Ventures Managing Partner Gene Munster
California Assembly Bill 5, which has been upheld in a recent court ruling, literally bans the right of an individual to work for themself according to California Assemblyman Kevin Kiley (R). The law will ban hundreds of different professions and especially the hundreds of thousands of jobs created by the gig economy over the last decade.
Here is how California Assemblyman Kevin Kiley describes the laws impact:
This law, California Assembly Bill 5, has made it impractical for Uber and Lyft to operate here. Everyone saw this coming. We’ve known this whole year that this law has been devastating for people. It’s actually devastating not just for Uber and Lyft but for hundreds of professions in California.
This law, AB-5, has basically banned being an independent contractor or an independent worker. It says you have to be in the employ of someone else. They are shutting down Uber and Lyft and that will leave 100,000 of their drivers out of work. We have millions of Californians who also rely on their services. It’s going to be yet another blow to our economy which is already doing about as bad as any state in the country.
California Law Kills Uber and Lyft And The Entire Gig Economy
Lyft is warning it may join Uber in shuttering operations in California following a preliminary injunction classifying its drivers as employees.
Uber, Lyft and the state of California have been locked in a battle over how to classify the two companies’ drivers. Under the Assembly Bill 5, gig workers are considered employees if they are critical to a company’s business. The law has profound implications for companies like Uber and Lyft, whose entire model is geared around independent contractors.
In his ruling, the judge granted a preliminary injunction preventing Uber and Lyft from classifying their drivers as independent contractors, effectively making them employees. While both companies plan to appeal the ruling, according to The Verge, Lyft President John Zimmer made it clear that losing the appeal would result in Lyft leaving the state. In a call with investors, he said: “If our efforts here are not successful it would force us to suspend operations in California.”
Uber and Lyft’s case will have far-reaching consequences for the gig economy in California and beyond.
Lyft has begun testing its autonomous vehicles on California roads again.
When the pandemic caused people to stay at home, Lyft’s public testing program was suspended. As California has eased restrictions, however, the company has resumed its testing program.
“We’re excited to announce that our autonomous vehicles (AVs) are back on the road — and that during the shelter in place we continued to make progress by doubling down on simulation,” reads the company’s blog post. “Simulation is an important part of our testing program, enabling us to test beyond road miles.”
At the same time, the company downplayed any impact the temporary hiatus had.
“While road testing remains a critical aspect of our program, simulation allows us to leverage existing on-road data in many more ways, and multiple times over, to help improve and validate our software,” continues the blog. “With Lyft’s unique data and Level 5’s advancements in simulation, we believe we’re reducing the road miles needed by several orders of magnitude. Our focus on simulation over the last few months allowed us to maintain Level 5’s momentum toward our goal to improve access to safe and reliable transportation for millions of Lyft riders everywhere.”
This is good news for Lyft and the autonomous vehicle industry in general. Especially in view of the pandemic and social distancing, the demand for autonomous, driverless vehicles may see an increase for reasons few would ever have expected.
In an effort to comply with a new California law that would make “gig-economy” workers employees, Uber is experimenting with letting drivers raise prices, according to The Wall Street Journal.
California’s gig-economy law, Assembly Bill 5 (AB5), went into effect on January 1 and has had profound impacts on Uber, Postmates, Lyft and others. Workers who were previously classified as contractors are now considered employees, requiring companies to provide them with benefits.
The pricing change is just the latest Uber is making in an effort to comply with AB5 and keeps its workers classified as employees. For a worker to be an independent contractor, they need a measure of independence, including the freedom to set their own prices rather than have them dictated by the company they work for.
According to the WSJ, “starting Tuesday morning, drivers who ferry passengers from airports in Santa Barbara, Palm Springs and Sacramento can charge up to five times the fare Uber sets on a ride.”
The move is not without challenges, however, as it could lead to price extremes. On the one hand, drivers may raise prices too high and hurt business. On the other hand, with freedom to change prices, drivers may engage in price wars with each other, driving the price down to the point that no one profits.
Whatever the outcome, Uber will no doubt do whatever is necessary to keep its drivers as contractors. Otherwise, especially if other states follow suit with similar laws, it could forever change the ride-sharing business.
According to Reuters, a judge has struck down a NYC rule “limiting how much time drivers for ride-hailing services can spend cruising streets in busy areas of Manhattan without passengers.”
Uber and Lyft filed separate lawsuits challenging a NYC rule that was designed to ease congestion. With ride-sharing vehicles making up nearly a third of peak traffic, the city was attempting to prevent ride-sharing drivers from cruising the streets while waiting for new passengers.
New York State Supreme Court Judge Lyle Frank issued his ruling in the case Uber brought, although he made it clear his ruling covered Lyft’s case as well, calling NYC’s cruising cap rule “arbitrary and capricious.”
The mayor’s office indicated it may fight the ruling however, with a spokeswoman for the mayor saying: “We put these rules in place to protect hardworking drivers and New Yorkers—and we’ll fight to keep them.”
According to a report by The Verge, Uber has said it will not share real-time electric scooter data with the Los Angeles Department of Transportation (LADOT) and is filing a lawsuit against the department.
The suit revolves around LA’s use of Mobility Data Specification (MDS), a program LADOT developed to monitor dockless scooters that are becoming commonplace in many cities. The data provided by MDS can be used by city planners to evaluate traffic patterns, add needed bike lanes and more. The promise of data that has previously been unavailable has led cities across the country to adopt and contribute to MDS. LA, as well as Austin, Chattanooga, Columbus, Louisville, Omaha, San Jose and Seattle are all making MDS participation a condition for companies to receive the necessary permits to operate.
Privacy advocates, however, are concerned that MDS gives cities unprecedented insight into people’s activity, since every part of a scooter’s route is tracked and recorded. Uber—who acquired scooter company Jump—along with Lyft and Bird have objected to MDS from the beginning and vowed to challenge the legality of the software. In particular, the company is hoping the California Electronic Communications Privacy Act (CalECPA), which became law in 2015, will provide it the legal teeth necessary to challenge LA’s position.
The state’s Legislative Council has ruled that MDS may run afoul of CalECPA, specifically as the law prohibits local governments from requiring real-time data in exchange for an operating permit. The only exception is if a specific rider waves their right to privacy, although it must be waved by the rider, not by the ride-sharing company acting as an intermediary.
Uber and Lyft are trying to get a temporary restraining order prohibiting LA from revoking their licenses. In the long-term, however, the legal battle over MDS will have far-reaching repercussions for privacy-minded individuals and corporations.
After 30,000 real-world driverless Lyft test rides in Las Vegas consumers have rated it an amazing 4.95 out of 5, says Lyft’s Chief Strategy Officer Raj Kapoor. He says that in the last 12 months the system’s gotten smarter and the ride has gotten smoother. “It has measured reactions and acts like a really good driver versus maybe an inexperienced driver,” says Kappor. “That’s a big change.”
Raj Kapoor, Chief Strategy Officer at Lyft, was interviewed by PCMag at the Consumer Electronics Show in Las Vegas:
Consumers Rate Selfdriving Lyft Rides 4.95 Out of 5
What’s changed changed in the last 12 months with our selfdriving tests is first of all the system’s gotten smarter. The smartness comes out in terms of planning and prediction. You can now tell how smooth the selfdriving ride is. If it’s seeing pedestrians or lots of cars it doesn’t make knee-jerk reactions. It has measured reactions and acts like a really good driver versus maybe an inexperienced driver. That’s a big change.
Two is that we broadened the area that we’re operating significantly. We’re operating a geofence that covers almost all the major hotels in Las Vegas and you can go anywhere in that area versus very specific points.
It’s one of those rare instances where a cool demo from CES right away becomes a live service. We have now 30,000 rides that we’ve had in the system and so far the feedback has been awesome. Consumers have rated it a 4.95 out of 5 stars and 9 out of 10 people that go on a ride would come back and do it again.
We’re really quite pleased with it. I think people have a lot of questions around self-driving, there’s some fear, but once they get in and do the ride they are really excited about it and ready to do it again.
It’s using the same scale as normal Lyft rides and in their mind it’s that same perception of how comfortable, clean, did the person or the robot drive well, all those things go into account. The automated Lyft is rating pretty high but the human drivers definitely get up there too. But 4.95 out of 5 is very respectable.
Lyft Using Las Vegas Data to Perfect the Selfdriving Ride
We can notice a lot of things with this real selfdriving test. Las Vegas is a great proving ground because there are so many people from around the world that come here. You’re not just having residents that are here. You’re having people that are using it for their vacation, using it for going back and forth, so we’re able to collect lots of data from a big diverse group of people.
We’re able to see what the repeat use is like. What do they like about it? What do they dislike about it? How much do they like to walk to the vehicle versus not? There are all these little nuances that go in.
Another example is around remote assistance. We noticed that the people love to have a conversation with the safety driver. They’re so excited at that moment. The question we have is as we move toward a future without a safety driver is how do we still get that interaction with the consumer? Can we have a remote assistant do that? We’re learning all these little things by being in the real life out there with people.
In fact, there are two people in the front. There’s a safety driver and also a safety engineer that’s in the front. So usually it’s the safety engineer that’s answering the questions. The safety driver is very focused on the road.
What doing now is developing remote assistance systems where you can talk to a lift operator and ask the questions that you need to ask via a very conversational interface with the consumer. There’s a lot going on there and there’s a lot going through their head around building trust. What is this car seeing? Is it acting the way that I would act? Then asking questions about how does that technology work? How can it do this?
More Human Drivers Will be Needed, Not Less
Going to the question around drivers. We still believe that there will be a need for more human drivers than there are even today. If you look at it these ride-sharing services in the US make up about 0.5 percent of vehicle miles traveled. Even if we go to 5 percent and the majority of rides become self-driving, if you do the math on that growth of the overall number of rides, you need even more drivers than you have today.
Also, this technology is great but it’s going to be slowly rolled out. It’s going to take a while for it to be able to do all conditions, all places, all the time.
We haven’t even begun to imagine around the new economy that comes out of self driving vehicles. There’s so much infrastructure that needs to be built around parking and charging and even mundane things like cleaning cars. Then there are serve there are groups of people that need to have assistance, whether it’s elderly people, people requiring physical assistance, or young children. We think there are going to be opportunities abound.
Obstacles to Overcome with Driverless Cars
There are a number of obstacles to overcome with driverless cars. Can I trust that this vehicle is going to operate safely, not just for me but for all the environment and community around us?
Two, is the technology itself. I think we’re on a good path and we’re improving but it’s going to take some time to get there. The other piece of it is that the cost of the vehicles are significantly expensive right now. They’re using expensive computers, expensive sensors, and they’re not made necessarily to last for a long time because they’re in a lot of R&D stage.
So the reliability and the costs have to get better. Then on the government side, the regulations that need to allow for this to flourish. We’re seeing good progress there. If we continue to have a federal level on safety standards then that’s something that’s really positive because it’s not going to be that you have to create a specific car for specific jurisdiction. We think those are the barriers but they all seem very doable.
Surprised at How Quickly Micromobility Has Taken Off
We classify all this (scooters and bike) as micromobility. What we found is that there’s really an unmet need for that zero to two-mile range short distance trips. Yes you could take a Lyft or you could potentially walk but you’re in that zone, especially if it’s a half a mile or more. It is a really convenient thing to do. It’s also a really fun thing to do whether you’re biking or scooting and especially if it’s electric propulsion.
I’m also surprised at how quickly that has penetrated but I think we’re living in a world now where there’s mass adoption, there social networks, and the innovation that’s coming that came in software so fast we’re seeing in hardware. New versions of scooters are about every month. There’s some loss rate and breakage rate that is acceptable given the high usage and it works for the consumer because it’s still a very reasonable price to get around town.
Lyft Helping Society Shift Away From Owning a Car
For people not to own a car, it’s really going to be a stitching together of a number of different modalities. Whether it’s bike, scooters, walking, or ride-sharing together, to provide a really good alternative to owning a car, which is expensive, a hassle, has parking, congestion, and emissions. It’s a really big problem that all these things together are going to be solving.
We want to get them from point A to point B in the most convenient way that they could get there and without owning a car. That’s the key criteria.
I think there will clearly be a big group of the population, especially that lives in cities, that really will not be able to justify owning a car. All the use cases that you’re thinking about you could utilize by short-term rentals, car sharing, ride-sharing, micromobility, or also public transit.
We’ve integrated into public transit and it’s the best way to get around in a lot of instances and we’re feeding into that. There’s a lot of inertia still about buying a car and some people are still wrapping up a car in their self-worth and their identity. That’s changing, especially with young people.
The best companies have very bright futures says tech investor Geoff Lewis. He says that the way he always thinks about private company valuations is as a discount on the future versus a premium on the past. Lewis says that the future is bright for Lyft because only half a percent of the rides in the US today are shared rides so there is a lot of room to grow.
Geoff Lewis, the founder of Bedrock Capital and an early tech investor in many companies including Lyft, recently discussed the future of Lyft, social media, Bitcoin, and more on CNBC:
The Best Companies Have Very Bright Futures
The way that I always think about these private company valuations is as a discount on the future versus a premium on the past. I learned this from Peter Thiel who I worked with for many years. The best companies have very bright futures.
If you think about Lyft, for example, only half a percent of the rides in the US today are shared rides. The entire remainder of rides in the US are normal rides. So there’s a lot of room for a company like Lyft in the US alone to grow if they can even capture two percent of rides in the US.
There Are Some Dogs that are Going to Go Out This Year
I think there’s a pretty bright future for the good tech companies. Quite honestly, there are some dogs that are going to go out this year and they’re not going to do well. But ultimately, the great thing about technology is the macro tends to matter less in the long term for the really enduring tech companies.
You want to find these businesses that have these really durable revenue models that are going to be able to grow for many years going forward. It’s a hard hard thing to figure out.
The Trend for 2019 is the End of Trends
I’m personally very interested in new approaches to financing education and new approaches actually getting an education. I really do think the university and the college system is very broke and there are new financial instruments out there that can really help folks through education. We have some exciting stuff that we’ve been working that we will be talking about in 2019.
Beyond that, I’d say the trend for 2019 is the end of trends. We’ve gone through so many hype cycles in technology and I really think we’re in an environment where we just have to find one-of-a-kind things that don’t fit into any easy to categorize categories. I think that makes the job of being an investor a lot harder.
Tesla is still the recognized leader in the autonomous vehicle concept on the strength of its Model S and Model X. But the new partnership between Google’s Waymo and Lyft aims to give Elon Musk a run for his money.
The two Silicon Valley companies have agreed to unify their resources and expertise to commercialize self-driving cars.
A spokesperson for Lyftsaid, “Waymo holds today’s best self-driving technology, and collaborating with them will accelerate our shared vision of improving lives with the world’s best transportation.”
The partnership was also confirmed by a spokesperson for Waymo who remarked, “Lyft’s vision and commitment to improving the way cities move will help Waymo’s self-driving technology reach more people, in more places.”
Waymo may possess the “best technology” since its self-driving cars are already averaging 5,000 miles without any human help, according to a report from the California DMV. In contrast, GM’s Cruise Automation is only averaging in the “hundreds of miles.”
However, Waymo does not have the knowledge on transportation networking to really make the jump between the deployment of its automated cars and mass commercialization. This is where Lyft will come in.
For those who are not familiar with Lyft, it’s similar to Uber but targets ordinary drivers looking to make some extra buck as partners. Customers also pay through the company’s app, but while the tip is already integrated into the final cost for Uber, Lyft asks users to add the tip through its app.
By the end of the year, Lyft will beavailablein 300 key US cities.
But this partnership will be beneficial not just for Google’s Waymo, but Lyft as well. It’s not an accident that people have not heard about Lyft because it comes a distant second to Uber. For instance, the company only has a $5 billion market valuation compared to Uber’s $68 billion.
The problem with ride-sharing networks is their heavy dependence on their partner drivers in order to scale up their business. In fact, drivers—along with the vehicles and fuel—make up 85% of the cost. Uber has the money to invest on a grand scale to cut the difference, a luxury that Lyft does not possess.
One solution is to cut the human drivers and go fully automated, the reportsaid. Instead of sharing the revenues with their human partners, they can quickly recoup their investments by operating an automated fleet.
