Lyft Launches In 24 New Markets, Cuts Fares By Another 10%

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On-demand ride-sharing startup Lyft is expanding aggressively in the U.S., announcing the launch of service in 24 new markets today. Along with the expansion, Lyft company will be offering free rides to new users in all launch markets, while also lowering its fares by another 10 percent in existing markets.

Today’s expansion brings the total number of Lyft markets served to 60, which is up from 36 just a day ago. That is the most coverage in the U.S. by any of the new on-demand ride app companies. It will also position Lyft as first-mover in 13 markets where the company won’t be competing with rival Uber at launch.

With today’s expansion, Lyft is opening up for business in existing Uber markets like Ann Arbor, Mich.; Fairfield County & New Haven, Conn.; Fresno, Calif.; Jacksonville, Fla.; Louisville, Ky.; Modesto, Calif.; Newark & North Jersey; Oklahoma City, Okla.; Raleigh-Durham, N.C.; San Bernardino, Calif.; and Tulsa, Okla.

But there are several new cities where Uber isn’t yet available, including Albuquerque, N.M.; Buffalo, N.Y.; Colorado Springs, Colo.; Corpus Christi, Texas; Kansas City, Mo.; Lexington, Ky.; Lincoln, Neb.; Memphis, Tenn.; Omaha, Neb.; Rochester, N.Y.; Spokane, Wash.; Toledo, Ohio; and Virginia Beach, Va.

(Update: This story originally said Lyft would be launching in 16 markets where Uber didn’t yet operate. It mistakenly counted Louisville, Raleigh, and New Haven among those markets.)

The expansion was announced just one day after Uber made a milestone announcement of its own, as it is now in 100 cities thanks to the recent launch of service in Beijing. About half of the markets it operates in are international, however.

Lyft, by contrast, has yet to launch in any international markets, but has focused on expanding in the U.S. first. That’s coming soon according to president John Zimmer, who told me Lyft would announce its first international market in the coming months.

In the meantime, launching in 60 cities in less than two years since launch is no small feat. At the beginning of 2013, Lyft was only available in San Francisco, where it launched. And this time last year, the service had only just recently expanded to Los Angeles and Seattle.

The expansion also adds a number of smaller cities, where Lyft sees an opportunity to offer a real alternative to owning a car. While there are a number of major markets like New York City where there are a number of mass transit options, people in smaller cities were often stuck owning a car to get around.

Zimmer pointed to Nashville, for instance, as one place where Lyft has seen incredible growth despite it being a small city where most people own cars.

“There are use cases where maybe there aren’t good alternative transportation options,” Zimmer said, where Lyft could step in. “For the first time, people have a really strong alternative to not use their car.”

Lyft is offering free rides for the first two weeks of service as a way to entice new users to sign up. That’s more or less standard operating procedure for the company in any new market it serves.

But the company is also discounting fares in existing markets by an additional 10 percent. The price cut is the second discount Lyft has applied just this month, as it seeks to acquire new customers in many places where it’s battling Uber and other transportation services.

Earlier this month, Lyft announced a “Spring Pricing” discount that lowered fares by 20 percent in all markets where it operated. That followed the introduction of “Happy Hour” pricing, which applied discounted fares in periods of low demand.

“Spring pricing has been so successful, we’ve seen double-digit percentage growth in the number of rides,” Zimmer told me. As a result, the company is being even more aggressive with its pricing. “There won’t be any impact to drivers, but this will allow for even more affordability [for passengers],” he said.

Lyft’s expansion and further price cuts come just weeks after the company announced that it closed $250 million in new funding from new investors that include hedge fund Coatue Management, Chinese e-commerce giant Alibaba, and Daniel Loeb’s Third Point, as well as existing investors Andreessen Horowitz, Founders Fund, and Mayfield Ventures. With that round, the company has raised more than $330 million in outside funding since it began as carpooling startup Zimride in 2007.