Lyft announces emergency features and discounted car maintenance for car owners
Lyft launched 10 years ago as a ride-on-demand service, where customers can order a car and go using an app. Now, the company is offering its customers who have cars an additional suite of services including discounts on car repairs.
Lyft co-founder and president John Zimmer revealed first to "CBS Mornings" new monthly membership features for the 75% of Lyft customers who also own or lease a car. With a $9.99 per month Lyft Pink membership, customers have coverage for up to four roadside emergencies per year, as well as the ability to arrange discounted car repairs or maintenance at a shop and also find, reserve and pay for parking within the app.
"It should, over time, be the most affordable way to manage your vehicle," Zimmer said.
It's the next move for a company that started in 2012 and boasted $3.2 billion in revenue last year. But expansion has its challenges: some analysts see Lyft struggling in the shadow of its rideshare competitor, Uber.
Senior analyst Brent Thill at the financial services company, Jefferies, said he predicts "a tough road ahead" for Lyft.
"They don't have what Uber has with Uber Eats, and many of the other product lines that they have," Thrill said. So there's just a greater diversification of revenue streams from Uber versus Lyft really being a one-trick pony."
That's why he says Lyft's stock price has taken a much bigger hit than Uber's this year, dropping roughly 76% year-to-date compared to Uber's roughly 32% dip.
But Zimmer contrasted the new Lyft Pink membership features to Uber's expansion to Uber Eats "in the sense that they're doing food and parts of transportation" while Lyft is "doubling down on transportation."
He also said he thinks the new services are "incrementally helpful" in terms of Lyft's future.
"I don't know exactly how the Street will respond, but showing that we're doing things to increase the amount of transportation spend that happens on the platform, showing that we're providing services to customers that increases their loyalty, showing that we have new growth verticals is absolutely helpful," Zimmer said.
As part of an industrywide trend, the company earlier this month laid off some 13% of its workforce to bring costs down.
"I see a period of a decade where everything was up and to the right, and a lot of companies were incentivized to grow, grow, grow at any cost," Zimmer said. "And we're now in an environment where that capital has dried up, and people have to cut back and that's what's happening."
He admitted that Lyft has "never had as much cash as our competitor" or resources.
"So we're scrappy," he said. "We'll look at this as a challenge but an opportunity to get better at what we do."
Nonetheless, Zimmer remains confident. He said he believes analysts who doubt the company's "ability to weather any storms ahead" are "absolutely wrong."
"Look at how we've weathered whatever has been thrown our way," he said. "Don't bet against us."
He assured that Lyft is in "a much better situation" than it was seven years ago, when it only had five month's worth of money.
"I'm confident in what we're doing," Zimmer said. "We've overcome way harder challenges and I'm excited about the future."