When John Zimmer and Logan Green launched a new ride-sharing service called Lyft in the spring of 2012, they instantly knew they had a hit on their hands. But that wasn’t always the case.
Prior to creating Lyft as part of a hack-day project, the twenty-something, first-time entrepreneurs had spent five years building Zimride, a carpooling service designed to help university students share rides back home during the holidays.
At the time, Zimride was in the midst of an identity crisis. After years of selling enterprise licenses to universities and businesses, it decided to go after the consumer market and opened its platform for anyone to book a carpool.
But consumer adoption was slow. Despite a number of failed experiments aimed at juicing growth, Zimride was having a hard time acquiring and retaining new users. So the team decided it was time to enable them to book rides on the go.
Zimride accomplished that somewhat with the launch of a mobile web version of its platform. There was a bigger opportunity ahead, however, in offering a mobile experience that could fundamentally change the way its users found and shared rides.
After some experimenting they came up with Lyft, a new product that wouldn’t just redefine their company, but also the way people thought about getting a ride from a stranger. In a way, that’s what John and Logan were hoping for all along.
Long before Zimride, Logan Green wanted to change the way people got from one place to another. Raised in Southern California, he was surrounded by people driving alone in their cars.
“In L.A., it’s the sort of city where you have to have a car to get around,” Logan tells me. “The other options are so bad, and you feel bad because you’re part of the problem. But you’re also suffering from the problem.”
Logan went to the University of California, Santa Barbara, which was close to his family’s home in L.A. He decided during his college years that he would leave his car at home and challenge himself to get around through a mix of ride shares and public transportation.
Over the years, Logan tried everything including Greyhound, Amtrak and Craigslist to hitch rides back to L.A., where his then-girlfriend (and future wife) Eva Gonda was going to college. But the trips weren’t always smooth. Every now and then his Craigslist ride lived a little out of the way, and one time, he was stranded when a train broke down.
Getting around Santa Barbara wasn’t much easier, so when he had the opportunity to join two transportation projects, he jumped on them. The first was an initiative at his university to create a Zipcar-like, car-sharing program. At the time, Zipcar only existed on the East Coast, so Logan spent two years working with the university to fund a home-brew version of the service. Students could sign up online to reserve and unlock a car from a small fleet of vehicles with RFID cards and an access code.
We realized that unless public opinion at some large scale changes, public transit is going to look the same or even worse 50 years from now.
Logan was also recruited as the youngest member of the Santa Barbara Metropolitan Transit District (MTD) board. It was there he saw firsthand why public transportation was broken in most of the country. Like many cities, Santa Barbara was losing money subsidizing the cost of every ride a passenger took on its buses. In the nearly three years Logan was on the board, there were two major initiatives put to a vote to fix that. The first was a measure to increase fares, and the second was a proposed sales tax increase to fund the local transit system. Both failed after facing intense scrutiny from the local community.
“We realized that unless public opinion at some large scale changes, public transit is going to look the same or even worse 50 years from now,” Logan says. “And it’s always disappointing to feel like you have a glimpse into the future and it’s worse, or at least not improving, in any way.”
If the Santa Barbara MTD gave Logan reason to question the future of transportation, it was a trip to Africa after graduation with his friend Matt Van Horn that gave him hope: Locals in Zimbabwe used carpooling to get around more efficiently.
“The streets were quiet because nobody was driving, and the government was too busy ruining the country to think about providing services like public transportation,” Logan says. So instead, people piled into shared minivans as a way to get around.
“There was this crowdsourced transportation network where anyone could be a driver and they could set their own routes,” he tells me. It impressed Logan that a country like Zimbabwe, which he says “had close to zero resources,” in many ways had a better transportation network than an affluent city like Santa Barbara. When he returned from his trip, he set out to change that.
In fall 2006, Facebook released the first version of its API, giving third-party developers a chance to create applications based on its identity tools. Logan began playing with it to build an online platform for users to find and make carpools available to others.
His travels in Zimbabwe inspired him to name the platform in honor of the country with a strong carpool culture. Zimride was born.
Through Facebook, Zimride added a level of identity and trust to carpooling that was previously unavailable. Unlike Craigslist and other online bulletin board systems, users on Zimride could connect a face with a name before they got into a car with someone.
Logan teamed up with Van Horn in December 2006, and the two worked remotely with a couple of part-time developers to flesh out the platform. The growing popularity of Facebook among university students helped Zimride gain early traction, as many of them began using the service to share trips home from school.
In April 2007, Zimride got its first press coverage in Mashable; a month later, it was one of 100 launch partners for the new Facebook Platform unveiled at the social network’s F8 developer conference. Soon after, it caught the attention of John Zimmer, who would join them in the pursuit of building a more trustworthy and social carpool platform.
The day John Zimmer met Logan, he was nursing a wicked hangover and holding a cold compress to his head. Though he didn’t usually drink, he had spent the previous evening bar hopping through the East Village with a friend.
Stumbling from one bar to the next, John spotted what he would later describe as five “Jersey Shore-looking guys” packed into a white Mercedes. Knowing he would meet Logan the next day, John had ride-sharing on his mind and shouted, “Hey, nice carpool!”
The car stopped and John was soon surrounded by all five passengers. He tried to convince them he wasn’t being sarcastic — that he was interested in carpooling and he really did think it was great they were all riding together.
It didn’t work. One of the guys punched him from behind and the group quickly ran back to the car while John watched from the pavement.
Hearing the story at their first meeting, it was obvious to Logan that John was deeply committed to the same cause. But while Logan’s interest in carpooling came from his Southern California upbringing and his experience in local politics, John’s pursuit was much more academic.
At Cornell John took a class called “Creating Green Cities and Sustainable Futures,” which was taught by Professor Robert Young. Over the course of the semester, Young walked students through changes in city infrastructure over the centuries and challenged them to imagine the future shifts necessary to make urban living sustainable.
One session focused on transportation and charted the different methods humans had used to get around throughout history, including canals, railroads and highways. In each case, those pathways spread like arteries tying different cities and towns together.
But physical infrastructure wasn’t the problem, as John saw it. As a student of the university’s School of Hotel Administration, the key metric he cared about was the occupancy rate of vehicles on the road. About three-quarters of all seats went unused, and he believed the key to solving the inefficiency problem was building out some sort of information infrastructure.
That’s what he found in Zimride, which he first heard about when one of his Facebook friends shared a link to the website. It caught his attention because the concept was similar to ideas he had been jotting down. He says it also caught his eye because the service’s name happened to include the first three letters of his surname. John got an intro to Logan, and despite his hangover at that first meeting, the two decided to join forces.
They would make for an interesting partnership. Whereas Logan’s so-called hippie parents sent him to an ultra-liberal high school — the type that took class trips to sweat lodges to help students discover themselves — John grew up in an upper-middle-class suburb of Stamford, Conn., and went to public school.
Logan is quiet and reserved, but John can be effusive and loquacious. While Logan saves his feedback for when it really matters, John is the type to talk through a problem to try to find a solution.
And yet, they worked extremely well together. At Zimride, Logan was in charge of all product and engineering, while John handled marketing and business development. Both would be equally as knowledgeable about what was happening in the business and generally in agreement about how to move forward.
When talking to John and Logan, they seem to share a common brain, and occasionally will end one another’s sentences. For some investors it was refreshing to see two co-founders who were so in sync. But for others, it was worrisome — very few were willing to bet on a team that essentially has two co-CEOs.
At that time, though, neither of them were ready to become full-time entrepreneurs. For much of 2007 and early 2008, Zimride existed as a side project that the pair worked on with a few other collaborators.
After graduating from UC Santa Barbara, Logan spent his days managing The Green Initiative Fund (TGIF) at the university, which it raised to invest in environmental projects. Meanwhile, John worked as an analyst at Lehman Brothers building real-estate models.
Even though they weren’t working on Zimride full-time, they still found a workable business model for the young company. After seeing Zimride’s continued adoption by college students, they decided to target universities as customers. Zimride would provide its platform for free to the first 50 students who signed up from each school, but after that it would try to book a contract with the universities to make Zimride their online ride board.
I think he found it hard to believe that someone would give him money for what he was doing.
Not long after Zimride was profiled in Mashable, Logan began receiving emails from a guy named Sean Aggarwal who showed interest in investing. Aggarwal was then a vice president of finance at eBay and an occasional angel who was looking to put money into carpooling companies as one of his investment themes.
At the time Aggarwal didn’t have much of a web presence, and the LinkedIn of 2007 wasn’t what it is today. Furthermore, Logan had never raised any money, and found it strange anyone would be interested in writing a check for his pet project. In fact, he thought the emails were part of some elaborate 419 scam.
He finally agreed to meet Aggarwal, but only under two conditions: first, that they meet in a public place, and second, that they wouldn’t meet alone. They met at a Coco’s Restaurant, and Van Horn tagged along to make sure nothing went wrong.
It turned out Logan’s fears were overblown. He and Aggarwal hit it off and talked for about two hours that day. More importantly, Aggarwal agreed to make the first angel investment in Zimride.
First, though, Aggarwal said he needed to ensure that Logan was who he said he was. So he ran Logan’s name through a criminal background check, a sex offender’s check, and some other databases before he agreed to hand over his investment.
At the end of the day it was worth it. Zimride got its first investor, and Aggarwal began working with Logan five to ten hours per week. Over time, he would turn out to be Logan’s closest mentor and most trusted adviser.
“I think he found it hard to believe that someone would give him money for what he was doing,” Aggarwal recalls. “The amount of money was modest. I think it was less about the amount, and more about the validation. It was about the fact that someone other than him believed in what he was doing.”
Now Zimride had some money in the bank, but John and Logan had no idea how to spend it. The first purchases made with Aggarwal’s investment were a frog and beaver costume for $30 each.
The outfits were justified as a “marketing expense,” which the guys would wear at college campuses while handing out flyers to promote Zimride.
John was still working at Lehman at the time, and one weekend he was asked to return to Cornell on a campus recruiting trip. John showed up to the university a few days early and he and a friend dressed up in the costumes to solicit interest in Zimride.
The costumes were a hit and led to a number of student sign-ups. Everything was great until a few days later at the Lehman recruiting event when one student walked up to John, who was standing next to his boss, and asked, “Didn’t I see you in a beaver costume a few days ago?”
Soon enough, John had a reason to quit the finance game and begin work on Zimride full-time. In the summer of 2008 the company, along with some other early Facebook API partners, received a $250,000 grant to continue development on the platform.
With the additional funding John was ready to move across the country, but others had their doubts. “How can you leave a sure thing like Lehman to go do a crazy carpool startup?” John recalls a friend’s mother saying after he told her of his plans.
That was August 2008. The following month, the global financial crisis struck and soon after Lehman was bankrupt. John had already moved to Palo Alto, and he used the trip as a marketing opportunity for Zimride, which few people had heard about at that point. Rather than fly or ship his stuff to the West Coast, he and three others shared a cross-country Zimride trip from New York to the Bay Area. The trip was covered by ABC World News.
Cheap costumes weren’t the only ways that the Zimride guys tried to grow while spending as little cash as possible.
The first office Zimride worked out of was barely large enough to fit four people, but John and Logan were able to get a really good deal on it. Located a few blocks off University Avenue in Palo Alto, it was in a building that would later be torn down because it didn’t comply with earthquake building codes.
Even with an office and a couple of employees, 24-year old John was uneasy about being a full-time entrepreneur. “We didn’t really know what we were doing, and it felt crazy at the time. I didn’t quite feel like an adult yet,” John recalls.
For their second office, which they called the “apartfice,” John and Logan rented an apartment they would also use as a place to work. It had a large living room with six desks and two bedrooms — one which Logan slept in, and another which had a couch and was used as an occasional meeting room or crash pad for anyone visiting or working late.
John spent about six months sleeping on the couch before moving into a friend’s parent’s house to save on living expenses. But Logan lived out of the apartfice until Zimride outgrew the space and had the cash necessary to move into a proper office.
In 2010, Floodgate‘s Ann Miura-Ko was looking for the “Airbnb of transportation.” She had missed out on Airbnb’s seed round, but was convinced that there were several other verticals where the same peer-to-peer model made sense.
She and Floodgate had already invested in a couple of marketplace companies, but they saw a huge opportunity in the transportation sector. This was before Uber, RelayRides and Getaround, and at that point Zipcar was the only successful tech company built around changing how people got from place to place.
But what she was really on the hunt for were “Thunder Lizards.” Inspired by Godzilla, the film monster hatched from radioactive eggs, the Thunder Lizards Floodgate sought out were entrepreneurs they believed “came from a different type of DNA” and could disrupt an industry.
To an outside observer, John and Logan might not seem like the type to crush buildings or cause havoc, but Miura-Ko was intrigued by their vision for changing the nature of transportation. She saw promise in them even when others weren’t so sure.
“John and Logan struck a lot of VCs as being too nice,” Miura-Ko tells me. “But at the end of the day, that was a feature and not a bug. Without that component or characteristic, Lyft wouldn’t have been born.”
Finally, Logan’s founding story resonated with her since she too had been to Zimbabwe and had seen how important carpooling was there. Miura-Ko decided to invest in Zimride’s seed round, along with K9 Ventures’ Manu Kumar, who had met John and Logan about a month after they moved to Palo Alto.
John and Logan struck a lot of VCs as being too nice, but at the end of the day, that was a feature and not a bug. Without that… Lyft wouldn’t have been born.
Zimride still didn’t have a proper office at that point, or anywhere for the founders and investors to meet. Instead of crowding into the apartfice, they congregated in the lobby of Stanford’s Munger Hall Graduate Residences.
It was there John, Logan, Miura-Ko and Kumar held their first board meeting. During that summer, “icing” became a thing. As a gift, John and Logan wrapped two bottles of Smirnoff Ice and gave them to their new investors. Kumar graciously got down on one knee and downed his. Miura-Ko, who was pregnant at the time, declined.
She still has that bottle of Smirnoff Ice and says she’s waiting for the company’s IPO to drink it.
Zimride was three years old and break-even, and the team had signed up dozens of universities, including nine of the 10 University of California schools, to license its online ride board. It had also gotten a number of companies to make its platform available to their employees for setting up carpools.
The enterprise business was steady and predictable, produced recurring revenue and was growing, but John and Logan had bigger ambitions. While selling to corporate clients was lucrative, it wasn’t sexy. Their main goal was to increase the occupancy rate of all the cars on the road, and to do that they decided to open up Zimride to regular consumers.
Raj Kapoor, then at Mayfield, stepped up to help. He led the firm’s investment in Zimride as part of its $6 million Series A. Tired of being a full-time investor and itching to get back into the startup game, he spent about one day a week with a few of the companies he had invested in, including Zimride.
Zimride replaced its homepage, which previously had been targeted at businesses, with a new carpooling portal that anyone could use. Even so, consumer adoption wasn’t happening as quickly as they had hoped.
“We were hoping people would come back and use it again, but these were the types of trips that people would take only once or twice a year,” John says. “At the time, we knew there were lots of variables, but I think we didn’t weigh the importance of frequency fast enough.”
Over the next six months, Zimride experimented heavily in an effort to get more users signed up and using the platform more often. It launched routes between popular destinations like San Francisco and Los Angeles, sometimes with John or Logan driving a minibus; it partnered with local bus companies to shuttle commuters around; and it launched a mobile website.
Next on the roadmap was a mobile app, but the engineers had become wary of building another product few people might use. They had reason to worry, since all those past experiments required engineering help to get up and running. None of them had produced a whole lot in the way of revenue, however, nor had they convinced many Zimride users to come back and use the platform more often.
John and Logan knew it was a bad sign the team wasn’t excited about creating a mobile Zimride app, so they did what might be the most difficult thing for any engineering organization to do — they stopped working.
Zimride’s hack day came at a time when it was unclear how the team would move forward. But rather than build a native app no one had confidence in, they sought to come up with new ideas that were more interesting to the team.
John and Logan, working together with new mobile product head Frank Yoo, brainstormed mobile app ideas that would engage consumers using the Zimride platform.
The first of those ideas was a product called “On My Way,” which allowed users to alert friends where they were traveling from, and give an estimated time for their arrival. That was followed by something called “Journey,” which enabled users to document a road trip through photos, video and music that they listened to along the way.
But the third idea was the clear winner. It was called Zimride Instant and was similar to Uber, in that users could request a ride on their mobile phones. But instead of using licensed drivers the way Uber did, Zimride Instant would rely on members of the community to give each other rides around town.
Zimride Instant was something its employees actually wanted to use. Perhaps more importantly, it aligned with John and Logan’s mission to cram more people into cars that were already on the road and boost their occupancy rate.
Once they decided to move ahead with the product, it was time to alert the rest of the team. John and Logan had a meeting with the company’s engineers and announced the plan.
Someone raised their hand.
“What’s your metric for success?” they asked. “And if you don’t hit it, when can we shut this down?”
When we were designing the Lyft experience, we thought about it like we were designing a fun, unique hotel. We were thinking, ‘How do we design delight and happiness into every Lyft?’
It was a legitimate concern. Zimride had been very bad at shutting down failed experiments, but John and Logan didn’t believe this would be one of them. They asked lead engineer Sebastian Brannstrom how long it would take to spec out the new product. “About two months,” he replied. They told him to have it finished in two weeks.
While Logan, Yoo and Brannstrom built the technology behind the product, John worked to define the user experience of the ride itself. Designing an offline interaction between two people isn’t as easy as building the navigation flow around a mobile app. John, however, had his background in hospitality to help guide him.
“When we were designing the Lyft experience, we thought about it like we were designing a fun, unique hotel,” John recalls. “We were thinking, ‘How do we design delight and happiness into every Lyft?'”
The team wanted to position the new product as separate from the existing Zimride service, so it dropped the “Zimride Instant” name and branded it “Lyft.” The initial version of the app was designed with a friendly, almost cartoonish feel.
Beyond the app, though, special emphasis was put on making rides reflect the values of the company. The founders didn’t want the experience to be like a taxi or an Uber ride, where a passenger sat in the back and didn’t interact with the driver. Zimride was all about community, after all, and they were determined to ensure it remained that way.
With passengers sitting up front, John believed the experience would be more like riding along with a friend. With that in mind, they settled on the tagline “Your Friend With A Car” to define the social nature of the new service.
It was Logan, however, who came up with the idea for the fist bump, after arguing that passengers wouldn’t want to shake hands. “No one wants to worry about sweaty palms,” he said.
In 2010, John heard about the carstache, which was a fuzzy, brightly colored ornament drivers could attach to their cars. As a joke, he even sent a few to his investors and advisors. With Lyft, he saw the carstache as a serious way to get people talking about the new service, and to bring a smile to drivers and passersby alike.
Although some members of the team thought it was crazy to attach pink mustaches to drivers’ cars, it would soon become the new service’s most defining feature.
None of that mattered if passengers weren’t comfortable riding around with a stranger. Until that time, no one had tested the waters for peer-to-peer ride services — not even Uber, which only used commercially licensed drivers.
Knowing safety and security would be key to user trust and adoption, John and Logan spoke with TaskRabbit founder Leah Busque, whom they had met through the fbFund Rev incubator. They asked how her company vetted contractors who signed up to complete tasks on the platform and implemented a similar system.
Lyft would require a clean criminal and driver background check from all its drivers. More important than that, though, was the personality of the people offering rides. The team recruited highly rated Zimride users to be their first drivers, with John and Logan interviewing each new driver brought onto the system.
Three weeks later, Logan and his wife Eva requested the very first Lyft. They had just moved to Pac Heights and used the service to take them from the Zimride office in SOMA to the Lion Pub in their neighborhood. When they got to the bar, however, they decided not to go in. The ride was successful, but Logan decided there was more work to do and headed back to the office.
Zimride’s board had become used to John and Logan’s constant experimentation by the time they presented Lyft. They had supported the introduction of routes, bus partnerships, and other new offerings in the company’s hunt to increase usage. But they had questions about whether or not passengers would want to ride in a stranger’s car.
Could Lyft compete with taxis or even Uber, which users had already become comfortable with? On that front, Logan, who is generally soft-spoken, responded with unusual intensity.
“Are you kidding? It’s more affordable, it’s safer, it’s a better experience… If we can make this work, there’s no question that there will be demand for this service,” he told the board.
People had been carpooling for years, they had been riding with strangers in taxis and black cars their entire lives. If anything, they argued, riding up front and actually talking with their driver would create a better user experience. They got approval and Lyft was on its way.
Eight weeks after launching to a select group of friends and family, Zimride’s new director of communications Erin Simpson invited members of the tech media to learn about the new product.
Simpson had joined Zimride just a few months before, filling a new role for the startup. Until then, most press and marketing had been handled by John, and this was her first major product launch.
The plan was for local tech press to meet the founders and members of the Zimride community on a Thursday night. By email, Simpson asked attendees to hold the news until the following week. But something went wrong, and one of the attendees wrote about the event that night.
That was the first time I met John, Logan and other members of the Zimride team. They impressed me with their vision and with the new product, which I couldn’t wait to use. But when I saw that the embargo had broken the next morning, I was conflicted.
I didn’t want to follow someone else’s report 12 hours later. So rather than write about the launch of Lyft, I wrote about how the launch had been “ruined.”
Simpson stared frozen at her screen while Logan read the story over her shoulder. “What do you mean, ‘ruined’? How could this happen?” Logan asked before storming off. Simpson was certain she wouldn’t last much longer, and took a walk around the block to calm her nerves.
The article caused an uproar, but my story about how the launch had been “ruined” only caused more people to learn about it. A few days later, I decided to write about the launch after all. Meanwhile, Lyft got picked up in other outlets, including mainstream publications like TIME Magazine.
“I think, on balance, the result was a net-positive,” John told me after the dust had settled. It wasn’t the launch Zimride had hoped for, but it had at least gotten people talking.
It also got people using the service. After five years spent trying to get people to share rides, Zimride had finally found a model that worked. It was so popular that after a few months Lyft had to add a waitlist because it couldn’t keep up with demand.
The early success of Lyft was a breath of fresh air, but it was causing some confusion among the troops. It had taken a small group of engineers to develop the initial product, but now everyone at the company wanted to work on the shiny new thing. With more than 150 paying clients, however, John and Logan knew they couldn’t just ignore Zimride.
There was a bigger question at stake: What was the future of Zimride? Was it with a product the team had spent the previous five years building, or was it going to be the result of a three-week hack project?
In hindsight, it seems obvious which path John and Logan would take, but it wasn’t at the time. They spent about a month debating how they would restructure the company to accommodate the new product, asking for advice from their board and advisers.
The stress of deciding the future of the company was taking a toll on John’s health. With a staff of employees depending on him and investors he needed to impress, John began having terrible migraines, seemingly out of nowhere. They affected his ability to think and work, and they only got worse as time went on. He first went to his primary care physician, but eventually got referred to the hospital for a brain scan. Even so, no one could find anything physically wrong with him.
After some deliberation, the founders decided to continue support for Zimride, but with a small number of sales support staff running it. The other 90 percent of its employees moved to work on Lyft, which they saw as a bigger overall opportunity. And after about a month of not being able to concentrate, John’s headaches disappeared as mysteriously as they began.
With that, Lyft was no longer just a product that Zimride had created — it was the primary focus of the company. In May 2013, the company made the switchover official by reincorporating as Lyft.
Knowing they couldn’t support Zimride forever, the founders began looking for someone to acquire its legacy business. In late 2012, John and Logan had begun reaching out to contacts in the industry to see what interest they could drum up.
Over the next few months, they identified four potential buyers for Zimride. At the end of that process, Lyft decided to sell Zimride to Enterprise Holdings.
John had known the team at Enterprise through his attendance at various transportation conferences over the years. It wasn’t just about the money, however — Enterprise had a van pooling business that they believed could benefit from Zimride’s assets. With them, the auto rental conglomerate could add a number of new clients and some software to the physical infrastructure it had already developed.
The founding of Zimride did result in an exit of sorts, even if it wasn’t quite what the founders or early investors expected or hoped for. And the money it received in the Enterprise deal went back into the war chest to help fund Lyft’s expansion.
With the sale final, John and Logan’s six-year journey as the founders of Zimride came to an end. But their work at Lyft was just beginning.
At the time of the Zimride sale, Lyft was available in six cities. Since then, it has expanded into nearly 70 markets throughout the U.S. But ultra-fast growth has led to a number of challenges, as Lyft has scaled up quickly.
Part of that struggle has been regulatory, with Lyft having to contend with increased scrutiny of its new service. In seemingly each new market, the peer-to-peer model has come under pressure from a powerful taxi lobby throughout the U.S.
In places like California and Seattle, it and other ride-sharing companies have worked with regulatory authorities to create a new framework for their services. Even so, some local lawmakers have still sought to shut its service down due to what they claim is a public safety concern.
The company’s biggest challenge, however, has come from its competition with market leader Uber. In many ways, Uber helped pave the way for Lyft by getting consumers used to the idea of hiring a driver via mobile app. But even though it opened the door for other players in the market, Uber has aggressively moved to stamp out the competition.
Lyft may have pioneered the peer-to-peer model for ground transportation, offering a low-cost alternative to Uber and local taxi services. Uber quickly copied it, however, by hiring its own army of non-commercially licensed drivers in a bid to compete with the new entrant.
Over the past two years, Uber and Lyft have been locked in a fight for market share in the cities in which they both operate. Over the past year, that’s played itself out through an aggressive price war to sign up users, but also through a battle to sign up and retain drivers that will work on each service. In many cases, drivers are keeping both applications open in an effort to get more rides.
Given Uber’s early lead — it was in dozens of markets before Lyft had even launched in San Francisco — and the amount of funding it’s raised over the last four years, it’s unlikely that Lyft will overtake it anytime soon. The urban transportation market is huge, however, and there’s good reason to believe multiple players can co-exist. In many places throughout the U.S., Lyft is the solid No. 2 player.
It’s also seeing adoption in a number of markets you might not consider highly dense cities — think places like Providence, R.I. That shows its model could extend to more suburban areas and help people get around even in places where car ownership is currently ubiquitous.
While Lyft has a long way to go before it is available everywhere, its most recent experiment could also be its most important. The launch of its on-demand carpooling service Lyft Line in San Francisco has gotten it one step closer to decreasing the number of cars on the road.
With Line, the company pairs multiple passengers into one of its rides. The product gets more people into each Lyft and lowers prices for all, which could have the mutual benefits of increasing demand, increasing occupancy rates, and reducing the need for users to commute alone.
And with that, John and Logan finally seem destined to make good on their founding mission.
Featured Image: Bryce Durbin