General Motors and Lyft are ready to take their two-month-old relationship to the next level, jointly announcing the launch of a short-term vehicle rental for people who want to drive for the ride-hail service but lack the wheels to do so. But this is not your typical car rental program: the more trips drivers complete for Lyft, the less they pay in rental fees. And those who finish 65 trips or more per week will pay for nothing but gas. The program, called "Express Drive," will be available first in Chicago, and then in Baltimore, Boston, and Washington, DC.
In Chicago, 125 Chevy Equinoxes will be made available for the initial roll-out. Vehicles can be rented weekly, but must be returned after eight weeks. Rental fees will correspond to the number of trips completed. Drivers who do less than 40 rides per week will pay $99, plus 20 cents per mile. Those who complete 40 or more rides a week pay $99, but no additional mileage costs. Once they reach 65 trips in a week, drivers are absolved of all rental, maintenance, and insurance fees, said John Zimmer, president and co-founder of Lyft.
"we've now made car ownership optional on both sides of the two-sided market"
GM says Express Drive will be operated under its Maven car-sharing service, which it launched in Ann Arbor, Michigan last January. Maven will pay for the upkeep and maintenance of the rental cars involved in Express Drive, while GM works with Lyft to determine which insurance to use to cover the drivers. The program is the first joint program by GM and Lyft since the two companies announced their plan to join forces to develop a fleet of on-demand, driverless cars. GM invested $500 million in Lyft as part of the deal, which provided the ride-hail service a much needed boost in its ongoing battle with Uber.
In the four cities where Express Drive will be initially available, 150,000 people applied to be Lyft drivers but were rejected, either because their vehicle didn't qualify or because they didn't own one to begin with, Zimmer said. This program is intended to rectify that problem.
"I think one thing that's pretty incredible that's happened here is that we've now made car ownership optional on both sides of the two-sided market," he said. "Historically — at Lyft we've talked about this for a long time — we want to make car ownership optional on the passenger side. But if you look now on the driver side with this program, you also don't need to own a vehicle to earn money on the platform and give rides to passengers."
"We're looking at a different future going forward"
Zimmer said this program was further proof that Lyft treats its drivers "better than everyone else." Both Uber and Lyft face respective class action lawsuits from drivers challenging their classification as independent contractors. Lyft recently settled its lawsuit for $12.25 million, while Uber's will go to trial this June.
Julia Steyn, GM's vice president for urban mobility, said Express Drive will be the foundation on which her company and Lyft will build its autonomous vehicle network down the road. "We're looking at a different future going forward," she said. "But still the vehicles need to be there, they need to be managed, they need to have an infrastructure associated with that."
This is not the first time Lyft has dipped its toe in the rental car world. Last October, the company announced it was renting out SUVs at discounted rates from Hertz for its drivers. Uber has its own rental pilot with Enterprise-Rent-A-Car underway in Denver. Meanwhile, GM recently bought failed ride-share company Sidecar, which was seen as another hedge by the automaker to ensure its business survives in the new sharing economy.