And more on how Lyft is competing with Uber
Ridesharing startup Lyft has a very (very, very, very) deep-pocketed rival in Uber. The behemoth has raised so much money it’s hard to even keep track of it all. (Crunchbase puts the figure at $15.2 billion, including debt.)
It’s expensive to compete. Lyft’s differentiators, according to President John Zimmer, include its treatment of drivers (“better than any other ridesharing company”) and its fast response times (estimated times of arrival averaged three minutes across Lyft’s top cities, he said).
His comments were made on stage Monday at Fortune’s Brainstorm Tech conference in Aspen.
Zimmer also emphasized his background in hospitality, going so far as to say that service will be Lyft’s differentiator when taxis are driven by autonomous robots. “As ETA and price becomes more equal, you can differentiate on experience,” he said. (Read more about Lyft and autonomous vehicles in Fortune’s latest cover story, “Some Assembly Required.”)
But service doesn’t change the cost of competing with Uber. According to reports, Lyft is losing as much as $50 million per month. When asked about that high sum, Zimmer said, “I would use the word ‘investing.’” Lyft believes there is a trillion-dollar opportunity in “transportation-as-a-service” market.
The company has “more than enough money to reach break-even,” according to Zimmer, who declined to name a time frame. He also declined to comment on a report stating that Lyft has hired investment bank Qatalyst Partners to shop itself for a sale.
One key way the company is competing with Uber is by forming an alliance with ridesharing startups around the world, including Ola, the “Uber of India,” and Didi Chuxing, the “Uber of China.” Zimmer explained that Lyft does not see value in spending the money required to navigate China’s uncertain regulatory landscape the way Uber has, but its alliance does not mean the company has given up on international expansion. It is “very likely” that Lyft will do business in other countries, Zimmer said.
Zimmer also discussed Lyft’s decision to implement its own version of Uber’s much-hated “surge pricing,” which increases the cost of a ride depending on demand, called Prime Time. “It’s more important to passengers that they have a car available at a given price that they can decide to pay, than to not have Prime Time pricing,” he said.
This story has been updated to correct John Zimmer’s title. He is President and co-founder of Lyft.