U.S. Government Awards Huge Transportation Contract to Uber, Lyft
The General Services Administration (GSA), responsible for managing services for federal agencies, issued a five-year federal contract to Uber and Lyft. Confirmed by Veronica Juarez, Lyft’s vice president of social enterprise and government, on Monday, the deal estimated to be worth somewhere in the neighborhood of $810 million and allows the ride-hailing firms to offer public agencies a direct line to their transportation services.
While federal employees have always been able to utilize the services, the new arrangement makes them semi-compulsory for some of the millions of government employees involved. Meanwhile, Uber and Lyft can now work directly with officials to promote their services. With the recent passing of California’s Prop 22, which issued special legal protections to ride-hailing companies, the duo seemed to be experiencing a run of good fortune late in the year. That doesn’t guarantee that they’ll suddenly become profitable entities. But they could be with sufficient government support — which seems increasingly likely for reasons we’re about to dive into.
Speaking of politics, the contract decision came hot on the heels of the GSA’s decision to name Joe Biden is the apparent winner of the 2020 presidential election. Interestingly, Lyft hired a lobbyist to help it push through Prop 22 who previously worked as the director of legislative affairs for Biden when he was still vice president. Matt Olsen, the former general counsel of the National Security Agency (NSA) who went on to serve as Uber’s chief security officer, also has a spot on Biden’s transition team.
Lyft’s Juarez said the awarded contract concluded almost four years of negotiations that weren’t being endorsed by the Trump administration. According to Reuters, she declined to state how much revenue her company expects to generate from the deal but noted that the U.S. government spends around $200 million on ground transport per year.
Lyft also hopes the government contract will open doors to further collaboration on public health and equity projects that require transportation.
The GSA did not immediately respond to a request for comment, but the agency in April announced the award to Uber and Lyft tentatively.
At the time, the agency said in a blog post that it had negotiated discounts with the companies of 2-4 percent compared with large commercial customers and that Uber and Lyft had agreed to waive some additional fees.
“The expansion of our customer base to include government is a natural next step for us, and we’re proud to help federal agencies tackle some of the biggest administrative challenges they face,” Ronnie Gurion, head of Uber for Business, said in a prepared statement.
[Image: Jonathan Weiss/Shutterstock]
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