By on September 27, 2018

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Ride-hailing company Lyft wants you to ditch your car — and hopefully give it up altogether. After rolling out a limited pilot project in Chicago last month, the company has launched a new initiative in 35 American and Canadian cities that compels drivers to leave their car untouched for 30 days.

Lyft hopes to find 2,000 people willing to take part in its “Ditch Your Car” challenge. In exchange, the company will provide credits for a slew of services under its corporate umbrella (ride hailing, bike sharing, but not scooter sharing… yet), as well as credits for transit. What’s stopping these drivers from secretly using their personal vehicles during the month-long experiment? Nothing.

Much like the famous Seinfeld episode about another type of contest, these participants will abide by the honor system. Despite not being profitable, Lyft claims it’s in a healthy enough financial position to try a wider-scale program.

“We’re finally in a point of stability where we can double down on these efforts,” Lyft co-founder and president John Zimmer told Bloomberg. “We need to provide a reliable service that is competing with the idea that your car is parked outside your house, which is extremely convenient.”

Ride-hailing alone can’t make up for a lack of personal vehicle, unless you’re willing to shell out heaps of money. To provide an alternative to vehicle ownership, Lyft, as well as other similar companies, would need to offer customers access to a lower tier of transportation. Lyft, as well as Uber, both own bike-sharing fleets. Both want to toss their hat into the electric scooter ring (“disrupting” traffic, literally and figuratively). Still, transit needs to form part of the picture, simply because it means lots of miles for few dollars.

Participants in the Ditch Your Car challenge will symbolically lock their car keys in a Lyft lockbox, then proceed to spend the next 30 days (starting October 8th) becoming a new, car-hating person. Lyft doesn’t come out and say it, but it obviously hopes the challenge moves more future business in its direction.

“There’s enthusiasm to try it,” Zimmer told The Verge. “By making it a movement, by making it an event, people are like, ‘Oh, let me try this experiment.’ Then they realize, ‘Wow, I get all this time back. I’m actually saving money. I’m more relaxed.’”

Yes, there’s plenty of cash to be saved when a ride-hailing company pays for your transportation. As shown in an earlier link, a recent study showed that replacing the same miles travelled in a personal vehicle with ride-hailing trips is a pricey proposition, though adding less comfortable (and convenient) options to the transportation mix brings the price down. Just how much cheaper depends on your choice of personal vehicle and payment plan, as well as your willingness to mingle with the plebs on buses and trains and use your leg muscles to propel yourself down the street. There’s no crumple zones and airbags on a bike.

Undoubtedly, some participants in well-served metro areas might feel compelled to try out a new style of living, but until it becomes too inconvenient and costly to own and drive a personal vehicle, people will continue paying for convenience.

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7 Comments on “One Way of Finding Customers: Pay People to Use Your Service...”


  • avatar
    Vulpine

    I really don’t see this working, outside of deeply urban areas. And taxis tend to be cheaper in the long run, even there.

  • avatar
    ahintofpepperjack

    It’s amazing to me that these companies are not turning a profit. I understand that building the app has a large initial investment, but at this point the app is complete. How much can web hosting, a few app developers, and customer support cost? Is it all advertising draining the bank? They have moved all the vehicle costs to the “independent contractor”. They provide no benefits, and no health insurance.

    Interestingly, I also read this article from a few days ago.

    https://www.recode.net/2018/9/24/17884608/uber-driver-gig-economy-money-pay-lyft-postmates

    These “Gig economy” workers are taking home less than half what they did 5 years ago. Uber and Lyft say it’s because their drivers are driving less. But it appears they have been steadily increasing their cut of the fare, and the drivers are making less and less per drive as well.

  • avatar
    redapple

    Like you said.
    HEavy urban areas -OK.
    I live in the suburbs. I dont care about this crap.

    Agreed. HOw can they still be losing money. I guess Sr MGMT are hauling down $10 mil/year each and sticking it to the drivers.

    Speaking of the drivers. Pay is really low for what you are doing AND your cost.

  • avatar
    TDIandThen....

    I think most execs are paid mainly in shares. I’d expect them to be getting $250k a year which in the Bay Area is barely upper middle-class. I’m sure there are exceptions. I think the bulk of profit is reinvested into new products, recruitment and advertising. I also assume their cost structure is not quite expensive enough.

    I’m in if they offer it in Montreal but my conditions are the fleet has to be either Porsche 944 turbos, 968s or Saab Aero convertibles in canary yellow with the black top. And I want them to include long-distance road trips in the package of course.

  • avatar
    cicero1

    The “flaw” with this model is that unlike Tesla and other electrics they are not using taxpayer money to subsidize this scheme.

  • avatar
    TMA1

    DC is currently testing scooters. About in 1 every 3 people riding the things can barely do so without teetering on the brink of collapse.

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