Lyft Moving Into Delivery Sector As Rideshares Stay Flat
Following a successful pilot program, Lyft is launching a delivery service to stay afloat as a second wave of the COVID-19 pandemic continues to stifle the rideshare industry, according to a report in Benzinga on Wednesday (Nov. 11).
John Zimmer, co-founder and president of Lyft, told investors on the company’s third-quarter earnings call that the company has been “very pleased” with the results of the pilot, which gives drivers a boost as people stay home.
“[The retailers have] told us that current delivery models with their expensive commissions are not working for them. And they’ve emphasized that the overall incentives are not aligned between delivery platforms and individual retailers,” Zimmer said.
“This creates a significant and differentiated white space opportunity to help retailers and local businesses fulfill their organically obtained traffic,” he added.
Once Lyft expands the service, it will be able to adequately compete with competitor Uber Eats and other delivery platforms. Uber’s reported revenues as of last week were down by 18 percent year-on-year.
Uber’s U.S. sales amid the pandemic were mostly due to its food delivery unit. Lyft only provided transportation until this new pivot.
Lyft posted revenues on Tuesday (Nov. 10) that beat forecasts, coming in at $499.7 million. Analysts had predicted estimates of $486.5 million.
“Adjusted loss of $1.46 per share missed the estimate of a loss of 91 cents per share,” according to the article.
Lyft announced in October that it was partnering with Venmo to give riders the option to pay for their trip or split the cost with others.
Uber is Lyft’s biggest rival. Lyft operates in 644 U.S. locations and 12 in Canada.
Lyft’s second quarter earnings plunged 60 percent year over year because of the coronavirus pandemic.