Tag: Lyft

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Gig workers in California to receive millions for unpaid vehicle expenses

Uber, Lyft, DoorDash and other app-based ride-hail and delivery companies will have to reimburse California gig workers potentially millions of dollars for unpaid vehicle expenses between 2022 and 2023.

The back payments come from a provision in Proposition 22, the controversial law that classifies gig workers as independent contractors rather than employees and promises them halfhearted protections and benefits. For example, gig workers get a minimum earnings guarantee, rather than a guaranteed minimum wage, for the time they spend “engaged” in a gig, and not the time spent between rides.

Part of Prop 22 stipulates that drivers making the bare minimum get a reimbursement for vehicle expenses. Starting in 2021, when Prop 22 went into effect in California, drivers began receiving $0.30 per mile driven while “actively engaged.” The law also states that the rate should be raised to keep up with the pace of inflation. So, 2022’s 6.8% inflation raise should have bumped those payments to $0.32 per mile; and in 2023 it should have gone up another $0.02 to $0.34 per mile.

A couple of cents may not seem like a big deal, but drivers clock thousands of miles every year, so it can really add up. Especially when you consider that there are roughly 1.3 million gig drivers in California, according to industry reports.

(By the way, in line with the lackluster benefits afforded to gig workers under Prop 22, their vehicle mileage deduction rate is half the standard rate for business owners and employees, which in 2023 is $0.655 per mile.)

Pablo Gomez, a full-time Uber driver since 2019, noticed that his payments never went up past $0.30, according to The Los Angeles Times, which first reported the discrepancy. Now we know that no drivers received the increased payments, because none of the app-based companies implemented the adjustment.

Uber, DoorDash, Lyft and Grubhub all told TechCrunch that they didn’t adjust driver reimbursement fees because they were waiting for the California treasurer’s office to publish adjusted rates. According to Prop 22, the treasury is indeed tasked with calculating and publishing the adjusted rate each year and failed to do so in a timely manner.

After studying the language of Prop 22, Gomez tried reaching out to the state treasurer’s office on April 13 and was brushed off. He then tweeted directly at Fiona Ma, the California treasurer, asking why the rate hadn’t been changed yet. Sergio Avedian, a gig worker and senior contributor at The Rideshare Guy, boosted the tweet. On May 10, Ma replied saying the rate adjustment had finally been published. Uber and DoorDash immediately started sending backpay to drivers, lest they face a class-action lawsuit.

For his part, Avedian said he was ready to file suit if the companies didn’t agree to retroactively pay. “I had the law firm ready, and I was gonna be the lead plaintiff,” he told TechCrunch.

Lyft told TechCrunch it has now begun issuing backpay. Grubhub said it will start retroactively paying drivers, and Instacart didn’t reply in time to comment.

The state’s treasury did not respond in time to explain why it took so long — 18 months for 2022’s rates — to provide adjusted vehicle reimbursement rates. According to Avedian, the treasury had been holding off due to the uncertain status of Prop 22. The ballot measure had been ruled unconstitutional in August 2021, but in March, a California appeals court overturned that decision. Industry experts say that despite the lower court ruling saying Prop 22 unconstitutional, it was still the law of the land, and the treasury should have treated it as such.

I asked the app-based companies if they had reached out to the department in the past year and a half to push for an updated rate. Uber said it reached out once in January 2022, and DoorDash said it had made repeated requests for updated mileage rates “dating back to January 2022.” Lyft also said it reached out to the treasury for information, but didn’t specify when or how many times. I also asked the companies if they had alerted gig workers to the treasury’s delay to reassure them that they’d be reimbursed eventually. None of them had.

And that’s not surprising. App-based gig companies have yet to achieve true measures of profitability, even as they find new and exciting ways to extract as much work for as little pay as possible from workers. (See: algorithmic wage discrimination, tip hiding and tip stealing.) When I asked an Uber spokesperson why the company didn’t just make its own calculations for workers, he responded that “it’s up to the treasurer’s office to mandate that rate.”

It’s not quite a “better to ask for forgiveness than permission” argument, but it’s along the same lines. Better to hope that no one notices you’re not paying workers properly, than to proactively pay them properly.

Not every driver will end up receiving backpay. Many ride-hail drivers exceed the minimum rate, so they aren’t eligible for vehicle reimbursement fees. However, those who mainly drive for Uber Eats, DoorDash and other food delivery platforms tend to rely more on tips for income, so they should begin to see payments show up in their accounts.

Avedian, who drives part-time and cherry picks his gigs, said he got around $85 from Uber. His wife, who also works part-time, got more than $200 from DoorDash.

But what about the workers who drive full-time?

“If you’re a full-time DoorDash, Uber Eats, GrubHub driver, you’re driving a solid 5,000 miles a month. There’s no doubt about that,” he said. “They’re gonna end up owing a few hundred million. It’s gonna be a lot of money.”

None of the companies I spoke to shared how much money they expect to doll out to drivers, but some back of the envelope math suggests that, collectively, companies could end up paying in the millions.

Aside from Uber, Lyft, DoorDash, Grubhub and Instacart, other relevant companies that employ gig workers include Amazon Flex, Target’s Shipt and Walmart’s Spark.

Lack of transparency

Avedian has gathered screenshots of his own, his wife’s, and his podcast listeners’ backpay reimbursements. One of his major gripes is the complete lack of transparency from the companies regarding the calculation of these amounts. None of the companies provide drivers with a mileage breakdown.

Uber is the only company to even stipulate that the payment is a result of California Prop 22 benefits. DoorDash drivers just see a random payment appear.

“Everybody’s getting money, and these drivers are like, ‘Oh, I got 400 bucks. I got 800 bucks,’ but they don’t all know what it’s for.”

Avedian actually keeps a spreadsheet where he logs all his net earnings, miles driven, number of trips and Prop 22 adjustments. Per his calculations, Uber’s back payment to him was actually off by $3.

“I call this nickel and diming of the gig economy,” said Avedian. “$3 times a million people is 3 million more dollars. I mean, I’m not bitching and moaning that people are getting money, but all I’m saying is, why not be transparent?”

In May, a bill in Colorado that aimed to make gig worker platforms more transparent for workers was shut down.

“Millions of people are driving for these companies, and while they’re doing it, they’re getting ripped off because of a lack of transparency,” said Avedian. “You must have something to hide, otherwise you wouldn’t be afraid of transparency.”

Gig workers in California to receive millions for unpaid vehicle expenses by Rebecca Bellan originally published on TechCrunch

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Tepid investor reaction clouds Lyft’s new strategy

Shares of Lyft are off sharply this morning, falling nearly 20% in early trading. The company’s equity is selling off in the wake of the U.S. ride-hailing giant’s first quarter results and its comments regarding the current quarter, and how its new strategic posture will affect its growth and economics in the coming quarters.

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In the wake of Lyft’s decision to remove its founders from day-to-day control, dramatically cut staffing, and bring in an external CEO, the company is now a leaner organization under new management. However, while Lyft saw its valuation slashed after it reported its results and updated strategic posture, shares of Uber have risen sharply in the wake of its own earnings update.

Here’s why Uber investors are cheering its Q1 earnings results

You could argue that Lyft waited too long to shake up its operations, given the tough comparison to Uber after both company’s Q1 earnings reports. But Lyft is taking a new tack now, which we need to understand.

While Uber and Lyft are among the best-known on-demand companies in the U.S. market, countless startups have tried to use similar models to build businesses of their own in the last half-decade. So, as Uber and Lyft do, so perhaps do the surviving startups that tried to mimic their meteoric rise.

This Friday morning we’re parsing Lyft’s Q1 results and Q2 guidance, the latter of which we’ll place in context of its strategic choices moving forward. Notably there’s quite a lot of what Lyft is doing that nests neatly into other corporate choices that we’ve seen recently. Many other tech and tech-enabled companies are looking to reduce their headcount, remove layers of management and hone their product focus. From that perspective, Lyft is part of a larger trend. Let’s see how those choices fit into its future product and pricing choices.

Tepid investor reaction clouds Lyft’s new strategy by Anna Heim originally published on TechCrunch

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Lyft shares tumble as investors react to dim outlook

Lyft shares tanked as much as 12% moments after the company reported first-quarter earnings as investors placed more weight on a dim outlook and lower quarter-over-quarter revenue than other financial gains. 

Shares have since stabilized in after-hours trading, now trading down about 10%.  

Lyft beat both its own revenue expectations and Wall Street’s, but it wasn’t enough to assuage investors focused on the ride-hailing company’s future. 

The company closed the first quarter of the year with $1 billion in revenue, up 14% from the same quarter last year. It should be noted that its Q1 revenue is lower than $1.2 billion it generated in Q4. Analysts had expected $977 million for the first quarter, and the company promised $975 million in February. 

That revenue gain is on top of a net loss of $187.6 million, a 4.7% improvement from the $196.9 million it lost in the same period last year. It’s also significantly better than the $588.1 million in net losses posted in the fourth quarter of 2022. Lyft attributed much of that loss in Q4 to $201.3 million of stock-based compensation and related payroll tax expenses.

On an adjusted basis, Lyft earned $22.7 million, compared to $54.9 million a year ago. It is an improvement from the adjusted loss of $248.3 million in the fourth quarter of 2022. 

The company’s operating cash flow was in negative territory for the quarter with a loss of  $188 million. Lyft closed out the quarter with cash and cash equivalents of $509.6 million, an increase from $281 million last quarter.

Lyft issued guidance for the second quarter of about $1 billion to $1.02 billion, an indication that the company is not expecting much growth in the coming quarter. On an adjusted EBITDA basis, Lyft expects to earn between $20 million and $30 million, with an adjusted margin of 2% to 3%. 

Notably, the company did not issue guidance for the full year, a move that can suggest the company is uncertain about its future or an expectation of changes to come. 

The first quarter has been a tumultuous one for Lyft as the company brought on a new CEO and president, issued layoffs for 26% of its staff and dropped certain offerings like shared rides. David Risher, the former Amazon executive who took over for co-founders Logan Green and John Zimmer, said he wanted Lyft to focus on the basics of ride-hail. Given these cost cutting measures and the coming of warmer seasons, which are usually a boon for the ride-hail industry, investors might be put off by second quarter revenue guidance that mirrors the first quarter. 

During Lyft’s earnings call Thursday, analysts and investors will want to know how the new leader will help Lyft continue to compete with Uber. The ride-hail competitor beat analysts’ expectations and demonstrated strong financial footing due to its business model that spans across ride-hail and delivery. 

Meanwhile, Lyft has been cutting away the extra fat of its business since last year when it closed down its car rental scheme. This quarter, the company is also shutting down its Fleet products focused on personal car ownership. 

Lyft shares tumble as investors react to dim outlook by Rebecca Bellan originally published on TechCrunch

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Lyft layoffs arrive, GM kills off the Chevy Bolt and Tesla makes a ‘deep fake’ defense

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Welcome back to The Station, your central hub for all past, present and future means of moving people and packages from Point A to Point B. 

We knew it was coming, and welp it did. I’m talking about Lyft and the layoffs that newly appointed CEO David Risher said would occur this week.

Here’s the breakdown: 26% of its workforce, or about 1,072 people, will be cut as part of a restructuring plan aimed at rebuilding its core ride-hailing product and boosting profits. The company is also scaling back hiring plans and will eliminate 250 open job positions.

Risher previously said the restructuring would be part of Lyft’s plan to “better meeting the needs of riders and drivers.”

That doesn’t sound great for other programs at Lyft; The bike-share service seems to be in a particularly precarious position. However, we still don’t know exactly where these cuts will occur. I’ve been told that they will be across the company.

We will hopefully find out more at 1:30 pm PT May 4 when Lyft holds its first-quarter earnings call with analysts.

Want to reach out with a tip, comment or complaint? Email me at kirsten.korosec@techcrunch.com. You also can send a direct message to @kirstenkorosec

Reminder that you can drop us a note at tips@techcrunch.com. If you prefer to remain anonymous, click here to contact us, which includes SecureDrop (instructions here) and various encrypted messaging apps.

Micromobbin’

the station scooter1a

Aventon launched a foldable fat tire e-bike, the Aventon Sinch.2. Aside from the obviously appealing features of being foldable and having fat tires, the Sinch.2 also comes with a new torque sensor that gives users responsive pedal assist. Meaning it can tell how much power to give based on how hard the user is pedaling.

Cake announced the full production launch of their new electric utility platform, the Cake Bukk. Bukk is designed to enable a range of configurations for electric utility vehicles used for delivery, maintenance and agriculture. The company also dropped their updated Jante motor system, which brings 60mph speeds and 500 Nm of torque to upcoming models.

Gogoro launched its Smartscooters and battery swapping in the Philippines, following an initial pilot.

Garmin has built a vehicle detection system for e-bikes that uses the bike’s battery to power. It costs about $300, attaches to your seat post, and delivers audible alerts to your smartphone.

Heybike has officially unveiled its new Ranger S e-bike, a foldable step-thru frame that’s designed to be robust enough to handle any terrain. And at $1,500, it’s also seriously affordable.

Joco is partnering with Grubhub to give 500 NYC delivery workers free access to its network of docked e-bikes.

Lyft saw more layoffs this week, and what I’d like to know is, how is this going to affect the company’s micromobility offerings? If you have any tips, send them to rebecca.techcrunch@gmail.com.

The new Mercedes Benz EQS 580 4Matic City Edition comes with *checks notes* a free one-year Unagi scooter subscription for owners in SoCal.

Is NYC becoming a biking city? The NYC DOT is on track to install a record number of protected bike lanes this year, to harden more than 10 miles of existing lanes, and to use sturdier materials in the new lanes. All of these moves, plus a public awareness campaign on the safe operation of e-bikes, come as cycling in the Big Apple is at an all-time high.

Taiwanese company OKGO (not to be confused with my middle school pop punk band obsession OK Go) revealed a “smart” e-bike that crams tech into a carbon fiber frame. Tech like fingerprint-scanning, voice command, and radar that alerts riders of rear-approaching vehicles. The prototype is mainly a demo so the company can sell the tech to other companies.

Rad Power Bikes has partnered with battery materials startup Redwood Materials to launch an ebike battery recycling program. Consumers looking to recycle their ebike batteries can participate in the program by bringing their battery to any U.S. Rad Retail location.

— Rebecca Bellan

Deal of the week

money the station

VinFast‘s ambitious plan to grab EV market share in the United States with a bevy of electric SUVs and crossovers— a feat for any automaker, let alone a newcomer from Vietnam — has captured my attention for awhile now. I have no idea how it’s going to shake out, although if recent reviews of the EVs offer any insight, I would say its not going to be smooth.

The company does have one trick — or more accurately 2.5 billion — up its EV sleeves that will certainly give it a boost. VinFast announced it will receive a $2.5 billion injection of capital. About $1 billion is coming from billionaire Pham Nhat Vuong, who founded VinFast’s parent company Vingroup. Another $500 million will come from Vingroup, the country’s largest conglomerate. The parent company has also agreed to loan VinFast an additional $1 billion with a maturity of up to five years.

Other deals that got my attention …

Bosch will acquire the assets of U.S. chipmaker TSI Semiconductors to expand its semiconductor business with silicon carbide chips. Following the acquisition, Bosch plans to invest $1.5 billion over the next few years to upgrade TSI Semiconductors’ manufacturing facilities in Roseville, California.

CorrActions, an Israeli startup that developed a driver monitoring system that can understand a driver’s cognitive state, raised a strategic investment from Volvo Cars Tech Fund. The target for this round is $6 million, according to the company.

Cyclic Materials, a circular supply chain company focused on recycling rare earth elements, raised $27 million in a Series A funding led by BMW i Ventures and Energy Impact Partners. Fifth Wall, Bioindustrial Innovation Canada (BIC), and existing investor Planetary Technologies also participated. The financing will be used to establish a hub and spoke network for the company’s commercial scale operations, according to BMW i Ventures.

Daimler Truck North America, NextEra Energy Resources and BlackRock Alternatives announced a $650 million joint venture called Greenlane that aims to design, develop, install and operate a U.S. nationwide high performance public charging and hydrogen fueling network for medium and heavy duty electric and hydrogen fuel cell vehicles. The first site will be in SoCal.

Luup, the Japanese shared micromobility startup, raised $30 million (4.5 billion yen) in a Series D financing round led by Spiral Capital. Existing investors ANRI, SMBC Venture Capital and Mori Trust and new investors including 31 Ventures, Mitsubishi UFJ Trust and Banking Corporation also participated. Luup has now amassed a total of $68 million in equity, debt and asset financing to date.

PreAct Technologies, a near-field lidar company, raised $20 million in a Series B funding round led by I Squared Capital. Previous investors State Farm Ventures, Luminate and Traylor Capital also participated. PreAct, which acquired earlier this year computer vision and gesture recognition company Gestoos, also announced it has established its new European headquarters in Barcelona, Spain.

Virta, an EV charging startup, raised €85 million ($94.6 million), money that will be used to grow charging transactions by more than fivefold in APAC and Europe by 2025. Virta said it plans to expand into Malaysia, Indonesia and Vietnam in the next 24 months.

Notable reads and other tidbits

ADAS

Tesla CEO Elon Musk has been tentatively ordered to testify under oath in a lawsuit that blames Autopilot for a fatal crash in 2018. Plaintiff attorneys want question Musk about recordings of him talking about the capabilities of Autopilot. His lawyers offered up an odd defense in their opposition to the request. They claim that Musk can’t recall the details of statements plaintiffs want to question him on, and that he is often the subject of “deepfake” videos. One of the recordings that plaintiffs are interested in is high-profile tech journalist Kara Swisher’s very real interview of Musk in front of a packed audience of real people in 2016.

Autonomous vehicles

Aurora has navigated through a number of obstacles on the road to commercial self-driving trucks. Contributor Tim Stevens interviews CEO and co-founder Chris Urmson about the past, present and what future challenges, including regulations, remain.

Cruise continues to ramp up operations. Its fleet of robotaxis are now operating 24 hours a day throughout all of San Francisco, but only employees can access the expanded hours and service area for now. Like its previous rollouts, Cruise will first make this newly expanded service available to employees before opening it up to its so-called “power users” and then the general public.

May Mobility is launching an on-demand public transit service using AVs in Arizona in the retirement community of Sun City. Via, the transit tech company, is a partner in the venture and will provide its software to introduce dynamically-routed, shared AVs.

The Uber ATG safety driver who was involved in the first fatality connected to an autonomous vehicle will be tried in June on a negligent homicide charge. Rafaela Vasquez has pleaded not guilty to the charge. The March 2018 crash killed 49-year-old Elaine Herzberg as she walked a bicycle outside the lines of a crosswalk in Tempe, Arizona.

Electric vehicles, charging & batteries

Is it me or is everyone announcing plans to build new battery factories. This week, Hyundai Motor Group and GM made separate announcements about plans to build electric vehicle battery plants in the U.S. in partnership with South Korean battery manufacturing firms. Hyundai will set up a $5 billion battery cell production joint venture in the U.S. with SK On. GM will partner with Samsung SDI to jointly invest $3 billion in an EV battery plant.

Faraday Future — yeah, remember that company? — said it expects to receive a second 180-day extension  to meet NASDAQ’s $1 minimum bid price requirement for 10 consecutive trading days if it continues to meet the continued listing requirement for market value of publicly held shares.

GM said it will stop producing its two top-selling EVs: the Chevy Bolt and its larger sibling, the Bolt EUV, by the end of 2023. Chair and CEO Mary Barra told investors during the company’s earnings call that its Orion Michigan factory, which currently assembles the Bolt, will be retooled for electric truck production. That also means the Chevy Bolt AV, the autonomous vehicle version used by Cruise, will not be produced either.

Honda plans to release its first e:Architecture-based electric vehicle in North America in 2025, a year earlier than the Japanese automaker originally said it would introduce EVs based on its in-house vehicle platform.

Lucid Group has started testing pre-production versions of its all-electric Gravity SUV on public roads in the United States.

Tesla has started producing a version of the Model Y at its Shanghai factory that will be exported and sold in Canada. Speaking of China, certain non-Tesla vehicles in the country can now charge at selected Superchargers.

Future of flight

Joby Aviation secured a $55 million contract from the U.S. Department of Defense, a deal that will allow the company to put its aircraft into customers’ hands and start generating revenue before it has achieved Federal Aviation Administration certification. Separately, Joby also signed a new long-term agreement with Toyota to supply key components for Joby’s eVTOL aircraft.

In-car tech

GM created its own open-source software protocol called uProtocol to speed up development and notably, it wants other automakers to use it. GM also announced plans to join the open source software organization, Eclipse Foundation.

Mercedes-Benz has found another way to generate revenue via software updates. The company is giving owners of the new Mercedes-Benz EQE and EQS the option to unlock additional performance in their cars through an software updated called “Acceleration Increase,” which can be accessed via its Mercedes Me Connect Store online. The cost is $60 a month or $2,950 for the lifetime of the vehicle.

People

GM nominated Vice Admiral Jan Tighe, former U.S. Navy deputy chief of naval operations for information warfare and director of naval intelligence, for a board seat. Tighe will stand for election at the company’s annual shareholder meeting on June 20, 2023.

Revel has hired Robert Familiar, formerly of Stu Loeser & Co. Strategy, as senior communications manager and Jake Potent, formerly of Constantinople & Vallone Consulting, as director of policy and governmental relations.

Surf Air Mobility named Tyrone D. Bland to its board of directors. Bland currently serves as the head of government Aafairs for Creative Artists Agency.

Vroom, the online used car marketplace, is restructuring and laying off more people. This time (the company cut staff in January too) 120 employees were laid off, per a regulatory filing.

Lyft layoffs arrive, GM kills off the Chevy Bolt and Tesla makes a ‘deep fake’ defense by Kirsten Korosec originally published on TechCrunch

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Lyft layoffs to affect 26% of workforce

Lyft said Thursday it will cut 26% of its workforce, or about 1,072 people, as part of a restructuring plan aimed at rebuilding its core ride-hailing product and boosting profits.

The company also said in a regulatory filing Thursday that it decided scale back hiring plans and will eliminate 250 open job positions.

Lyft estimates that it will incur a cost of about $41 million to $47 million related to severance and employee benefits in the second quarter of 2023. The ride-hailing company also said it expects additional costs related to stock-based compensation and the corresponding payroll tax expense related to employees who were impacted by this restructuring.

Last week, Lyft’s newly appointed CEO David Risher told employees in an email that the company would significantly reduce its workforce as part of a restructuring effort. Risher said the restructuring would be part of Lyft’s plan to “better meeting the needs of riders and drivers.”

With an emphasis on ride-hailing, workers and industry watchers have speculated other departments such as its bike-sharing service will sustain the deepest cuts. Lyft did not disclose if the layoffs would focus on certain departments.

Lyft is scheduled to release its first-quarter earnings results May 4.

Lyft layoffs to affect 26% of workforce by Kirsten Korosec originally published on TechCrunch

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Honey, I shrunk the revenue multiple

With new leadership and a soon-to-be-thinned employee base, Lyft is going to look a heck of a lot different at the end of 2023 than it did at the start. After its co-founders said they’d relinquish their roles as CEO and president in March, the company last week said it intends to dramatically cut its staffing by as much as 30%.

The changes were probably necessary. Lyft, as it turns out, is not nearly as valuable a company as its founders and backers once expected. And that’s an odd thing to realize if your startup was able to raise billions while private and eventually price its public offering at $72 per share, raising more than $2 billion and commanding a fully-diluted market cap of around $24 billion.

Things have changed, though. Lyft’s shares ended last week at $10.44, up a solid 6% on the news of the impending layoffs. That helped it recoup some of its lost value, but the company is worth just $3.9 billion this morning.

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It’s somewhat strange to consider, but the ride-sharing company’s stock is trading near historic lows despite it reporting revenue of $1.18 billion in Q4 2022, its best single-quarter revenue result ever. The company lost around a third of its value after it forecast revenue for its first fiscal quarter below what analysts had estimated. 

The lesson here is that quick revenue growth can make companies look like they’re excellent investments when capital is cheap, but it’s often hard for any firm to outrun the relative valuation range for its industry, even if it is tech-enabled.

Lyft is only the latest to join the group of public-market duds that have spent time as venture darlings. To pick only two examples: Allbirds has given up most of its historical value, and Warby Parker has shed around 80% of its peak valuation. The list is long and some of the most beat-up recent venture-backed IPOs share a quality today: Impressively low revenue multiples.

The squeeze

We talk a lot on The Exchange about revenue multiples, mostly discussing what the value of one dollar of recurring, hosted software revenue is worth. We use this perspective frequently because software is the most common startup product and software-as-a-service (hosted software, that is) is the most common business model.

Honey, I shrunk the revenue multiple by Alex Wilhelm originally published on TechCrunch

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Lyft to make ‘significant’ cuts across ride-hailing company

Lyft’s newly appointed CEO David Risher told employees in an email Friday that the company is significantly reducing its workforce as part of a restructuring effort.

Risher said the restructuring is part of Lyft’s plan to “better meeting the needs of riders and drivers.” The company confirmed that it has not changed its guidance for the first quarter in spite of the upcoming layoffs.

Lyft doesn’t employ drivers who use the ride-hailing app to pick up and drop off riders. Instead, the layoffs will be directed at the company’s more than 4,000 full-time employees. Employees will learn whether they have a job or not via an email that will be sent out April 27.

Lyft wouldn’t disclose the number of people who will be cut. A WSJ report, citing unnamed sources, said about 1,200 workers, 30% of its total workforce, would be affected.

Risher, a former retail executive at Amazon, took over the CEO position at Lyft after co-founders Logan Green and John Zimmer stepped down last month.

Risher explained in the email that he made the decision to help the company achieve its two core purposes.

Lyft has two purposes that are linked to each other: We help riders get out and about so they can live their lives together, and we provide drivers a way to work that gives them control over their time and money.

We need to be a faster, flatter company where everyone is closer to our riders and drivers so we can deliver on this purpose, and we need to bring our costs down to deliver affordable rides, compelling earnings for drivers, and profitable growth. We intend to use these savings to invest in competitive pricing, faster pick-up times, and better driver earnings. All of these require us to reduce our size and restructure how we’re organized.

The move may come as no surprise to those who closely follow Lyft and its struggles to keep apace of rival Uber.

Risher told TechCrunch in a late March interview that Lyft might drop its shared rides offering and make other changes to its business model in a bid to focus on its core ride-hailing business and become profitable.

He listed a number of other products and services that could disappear, including Wait & Save, which allows riders in certain regions to pay a lower fare if they wait for the best-located driver.

“It’s possible that maybe we don’t need both of those anymore and that we can focus all our resources on doing a fewer number of things better,” Risher told TechCrunch at the time. “Maybe it’s time for us to say the shared rides were great for a time, but it’s time to let that go.”

What’s less clear is how this might affect programs outside of ride-hailing such as its bike-sharing service.

Lyft to make ‘significant’ cuts across ride-hailing company by Kirsten Korosec originally published on TechCrunch

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Washington Uber and Lyft drivers win paid family and medical leave

Washington’s Senate unanimously passed a bill this week that would make the state the first in the nation to grant ride-hail drivers the right to paid family and medical leave.

The bill, HB 1570, builds on driver rights won in 2022’s Expand Fairness Act, which set a high statewide wage floor for drivers and established a right to protections against unjustified deactivation, worker’s compensation insurance and paid sick time.

The win in Washington comes a month after drivers in California were dealt a blow when the state upheld Proposition 22, the ballot measure passed in November 2020 that classified Uber and Lyft drivers as independent contractors rather than employees. A lower court had previously ruled Prop 22 unconstitutional.

Washington’s ruling could have ripple effects in other states fighting to grant gig workers employment benefits.

“Today is a landmark in the fight for worker rights nationwide” said Peter Kuel, president of Drivers Union, an association of ride-hail drivers, in a statement. Kuel started driving for Uber and Lyft in 2014. “In the State of Washington, drivers must no longer choose between caring for unwell loved ones and putting food on the table. This victory is a demonstration of what drivers can achieve when they organize together to fight for the rights that every worker deserves.”

The bill will head to Governor Jay Inslee’s desk to be signed into law. Access to the program is expected to come online for drivers in July 2024. It’ll grant ride-hail drivers access to the same program as other workers in the state, which offers up to 12 weeks of paid leave if a serious health condition prevents them from working or if they need to take time off to care for a family member or a new child.

The cost of a driver’s premiums for the program will be fully paid by the app-based companies, like Uber and Lyft, for which the driver works, according to the union.  It’s not clear how the ride-hail companies intend to fund the program or whether they’ll increase rider fares in Washington to compensate.

Washington has more than 30,000 Uber and Lyft drivers, most of whom are immigrants and people of color, according to a 2022 study. The report also found that about a third of drivers and their families rely on food stamps in King County, with a quarter living in federal poverty.

“This is another historic win for drivers in Washington state and is a continuation of the progress made last year with the passage of HB 2076, first-in-the-nation legislation to provide drivers in Washington with numerous benefits,” said Lyft in a statement. “HB 1570 would add paid family medical leave and unemployment insurance benefits to that list. These new benefits and protections are the result of legislators, app-based companies, and labor organizations listening to drivers and working together.

Uber did not immediately respond to a request for comment.

Washington Uber and Lyft drivers win paid family and medical leave by Rebecca Bellan originally published on TechCrunch

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Lyft re-launches EV service, starting with business travelers

Lyft is re-launching a feature that will allow riders to request an electric or hybrid vehicle for their next pickup. The service, Lyft Green, will initially only be available to business travelers in select cities when it begins April 17.

Lyft had originally launched Lyft Green in 2019 in Seattle, with plans to scale across other cities, but rolled it back in 2021. A spokesperson told TechCrunch the service was “initially a bit ahead of its time” and that Lyft didn’t see a lot of demand. Now riders have had more exposure to EVs and are more excited about them, so the expansion is Lyft’s first step towards broadly offering the option again in the market, the company said.

The re-launch comes a week after Uber expanded its Comfort Electric option, which allows riders to choose a luxury electric vehicle like a Tesla or Audi, to 14 new cities. Comfort Electric is currently available in 40 cities, and Uber also has a more budget-friendly version called Uber Green, where riders can request a hybrid or less flashy EV.

Lyft Green is in line with the ride-hailing company’s goal to reach 100% electric vehicles on its platform by 2030, a goal that is partly charged by California’s 2021 ruling that ride-hail trips must be done in EVs by that same year. Lyft will have to make some aggressive changes if it intends to meet that goal. While hybrids have grown in popularity among Lyft drivers, EVs have remained somewhat stagnant. In 2021, the share of vehicle miles driven in an EV was only 0.56%, according to Lyft’s 2022 ESG report.

The spokesperson said that Lyft Green wasn’t popular enough back in 2019 to be successful, but it’s possible that there simply weren’t enough EVs on the platform to make it a viable service. For comparison, 4.1% of Uber’s trip miles have been completed with electric vehicles in the U.S. and Canada.

Last December, Lyft introduced options to help drivers switch to EVs, including discounts on charging and expanded EV inventory for the company’s so-called Express Drive rental program. The company also offered California drivers an extra $150 per week if they give 50 rides in their personal EVs until the end of 2024.

A Lyft spokesperson said that Lyft Green rides cost $1 more than standard rides, and that dollar is split between the driver and Lyft.

To get drivers to make the switch to EVs, Uber has been offering drivers $1 per trip completed with an EV, capping out at $4,000, and works with rental companies to give its drivers discounts on EVs.

As Lyft works to get more drivers on its platform driving EVs, it will trial the Lyft Green program initially with business travelers, who will need to sign up for a Lyft business profile using their work email. This is the second of Lyft’s business-focused initiatives this year. In January, the company launched a new reporting tool to help businesses track their emissions using the platform.

Lyft Green is currently available in Portland and will expand into 14 markets, including San Francisco, Seattle, Los Angeles, Silicon Valley, Boston, New York City, Chicago, San Diego, Washington, D.C., Austin, Denver, Orange County, Sacramento and Phoenix. As the company improves the service, it expects to open the service up beyond just business travelers.

Lyft recently announced a new CEO, David Risher, who will take over on April 17, the same day Lyft Green launches. Lyft’s co-founders Logan Green and John Zimmer, stepped down from their positions of CEO and president, respectively. Risher’s plan for Lyft is to focus on the core ride-hailing business in an attempt to gain back more market share from Uber.

Lyft re-launches EV service, starting with business travelers by Rebecca Bellan originally published on TechCrunch

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Lyft might drop shared rides, stay focused on basics under new CEO

Lyft might once again drop its shared rides offering, just one of several changes the company’s newly appointed CEO could make in a bid to focus on its core ride-hailing business and become profitable.

David Risher, who is taking over as Lyft’s CEO in mid-April, told TechCrunch in a wide ranging interview that other features may also be axed. For instance, the Wait & See feature, which allows riders in certain regions to pay a lower fare if they wait for the best-located driver, may end, he said.

“It’s possible that maybe we don’t need both of those anymore and that we can focus all our resources on doing a fewer number of things better,” Risher, the former Amazon executive, told TechCrunch. “Maybe it’s time for us to say the shared rides were great for a time, but it’s time to let that go.”

Lyft, co-founded by Logan Green and John Zimmer, launched shared rides in 2014 on a small scale before expanding the service. Uber launched Uber Pool the same year. Both companies dropped their carpooling services during the pandemic before reinstating new versions later. For Uber and Lyft, carpooling has historically been a money pit, a loss-generating ploy to attract riders with cheap fares.

While nothing is yet decided, the potential move is an example of how Lyft’s new management hopes to stem its losses and, eventually, pry some market share back from its main competitor and oft-described big brother Uber. Instead of adding new products like delivery or even selling the company (both of which Risher says aren’t going to happen), Lyft is going back to basics.

“The first order of business here is to focus on the basics of rideshare,” Risher said. “The reason I say that is because in this type of marketplace where you have competitors, you can’t be losing share to the other guy if you want to be around long term. And I think this duopoly is a good thing. In so many other markets, you really want, as a customer, some choice, and I think as a driver, you want choice. It keeps us honest and allows us to play off one another a bit.”

Uber, already a larger company, has taken more U.S. market share from Lyft in recent years, through an all-of-the-above approach that includes food delivery and even transit services. Today Uber’s market share has grown from 62% at the start of 2020 to about 74% today, versus Lyft’s 26%, according to YipitData.

Another study from Similarweb shows that Uber leads in monthly active users (MAUs), and that lead has grown over time. In February 2023 alone, Uber had 9.4 million MAUs, a 62% lead over Lyft’s MAU of 5.8 million. This time last year, Uber only had a 48% advantage over Lyft. Similarweb’s data also shows that Uber outranks Lyft on both Apple’s and Google’s app stores, and that over the past 12 months, its Android downloads were 22% higher than Lyft’s.

Uber has taken a different approach to Lyft in pursuit of profits. While Lyft has stuck with ride-hailing, Uber has expanded into delivery through its UberEats platform and added a a slew of new products as it aims to own to attract users, but also create a closed business loop wherein each product feeds customers back into other Uber channels.

“We are actively cross-selling food delivery consumers into grocery, grocery consumers into alcohol, and actually back now to mobility,” said Uber CEO Dara Khosrowshahi during the company’s third quarter 2022 earnings call held November 1. “All of the cross-sell that we have across the platform continues to increase, drive new customers and drive retention, as well.”

Risher said Lyft won’t try to compete with Uber by introducing a delivery product to the app, in part because he doesn’t consider delivery to be either a customer or driver-driven decision.

“From a driver’s perspective, they’re now shuttling in their mind between picking up a person versus picking up a pizza,” said Risher. “And when I pick up a pizza, I have to double park at the restaurant with seven other people, then I get a ticket once every couple of weeks, then I gotta get in my car again and drive, then get out and ring the doorbell. It’s a very different cycle than, ‘I’m picking people up and I’m just transporting them.'”

He also said riders might not want to be in a car that just dropped off a couple of pizzas.

The first order of business

“I think for a lot of people, Lyft has gone from top of mind to a little bit on the side, so it’s our job to remind people we exist and really give them a great experience,” said Risher.

That might mean ensuring Lyft doesn’t charge more than the competition and that its drivers pick up and drop off customers on time. In the past, Lyft was an attractive option because it offered cheaper rides than Uber. Now, after the post-COVID driver shortage, Lyft’s average price per mile is on par with Uber’s, according to more research from YipitData.

Risher didn’t say if Lyft will cut its workforce in an effort to rein in costs. However, CFO Elaine Paul hinted at taking such measures during the company’s fourth quarter 2022 earnings call. Paul also suggested Lyft shift to hiring workers outside the U.S. who are less likely to expect equity as part of compensation.

Risher seems most focused on creating more demand for the services, while making operations more efficient. Those efforts extend to increasing demand for Lyft’s micromobility business through some method of cross pollination between the two verticals, according to Risher.

“I don’t think we’ve given riders or bikers enough of a good reason to come and try us out on ride-share, as an example,” he said, noting that he is an avid cyclist. “If we have both of these ways for people to get around, how can they reinforce each other, because right now they’re a little too parallel.”

Lyft currently offers the Lyft Pink membership program that provide riders with ride-hail perks like free priority pickup upgrades and relaxed cancellations, as well as bike and scooter discounts. The membership also includes free Grubhub+ for a year and SIXT car rental upgrades, which represent a half-hearted attempt to capture more of the transportation market through partnerships.

Analysts are still wary on Lyft’s recovery

Lyft went public in March 2019 at a value of $24 billion. Today, Lyft’s market capitalization is around $3.35 billion. Uber’s market cap is $60.44 billion. Investors initially reacted favorably to Risher’s appointment, pushing its share price to $10.14 immediately following the announcement. But the positive reaction has been short-lived.  Lyft’s share price has fallen 11.4% from Tuesday’s high to close Wednesday at $8.98.

Tom White, senior research analyst at D.A. Davidson, told TechCrunch he remains neutral on the company with a $12.50 price target.

“We’ll admit the news came as somewhat of a surprise to us, but perhaps it shouldn’t have given the relative underperformance of LYFT shares and in Lyft’s core ridesharing business in recent quarters,” said White.

Lyft’s Q1 2023 revenue outlook remained unchanged by Risher’s appointment, but analysts recall that Lyft’s target ($975 million) was lower than what they had expected ($1.09 billion).

Lyft attributed the reduced outlook to colder weather, which leads to fewer ride-hail rides, shorter trips and a major dip in micromobility usage. Since Lyft is only active in North America, the company lacks the ability to balance poor ridership in one wintry part of the world with increase usage in other, warmer places.

Although Lyft’s strategy so far lacks the dazzle of shiny new products that might directly compete with Uber, Risher has some pretty good incentives to turn the company around (that is, aside from the pride of a job well done).

“As part of his equity compensation, [new CEO John Risher] received 12.25M performance-based restricted stock units, broken into nine tranches, each vesting separately at LYFT price hurdles from $15.00 to $80.00,” said Ben Silverman, director of research at investment research management firm VerityData. “The vesting schedule is vastly different from the founders’ awards received by Logan [Green] and [John] Zimmer in 2021 and 2022 which only vest if LYFT hits or exceeds $100.00. Clearly, that aspirational view has been muted. Regardless, Risher is tasked with a massive turnaround and if fully successful, can earn $980M.”

Lyft might drop shared rides, stay focused on basics under new CEO by Rebecca Bellan originally published on TechCrunch