Lyft is raising the stakes in its mission to dominate all modes of transportation in major cities. Starting in August, the ride-hailing company will offer 100 residents of Chicago $550 each in credit to Lyft and several other mobility services if they ditch their personal vehicles for a month. It’s a bold, if slightly gimmicky, way to highlight the high costs associated with car ownership, while also promoting cheaper alternatives of getting around.
To be sure, Lyft isn’t handing over $550 checks to people and then sending them on their way. The money will come with strings attached. Those who accept the challenge to put away their car keys for 30 days will get $300 in Lyft shared ride credit (for use in carpool trips only), $45 for a monthly Divvy bike-share pass, $100 in Zipcar credit, and $105 for “L” train and bus service.
“We are literally asking people to get rid of their cars.”
“We are literally asking people to get rid of their cars,” said David Katcher, Lyft’s general manager for the Midwest. “Basically, we’re giving people this opportunity to park their cars for 30 days, and here’s everything you need to get around this city.”
Those interested in participating will need to prove to Lyft that they own a vehicle in order to qualify. And if they accept, Katcher says Lyft will be relying on the honor system to make sure people live up to their end of the bargain. Participants are encouraged to post about their 30-day multimodal experience on social media. And Lyft will conduct pre- and post-challenge interviews to gauge reactions.
“We want to follow them. We want to hear their stories,” he said. “We want to see how their feelings about driving have changed. We want to see if they’re saving money. We want to see if they’re having less stress. We want to see if they got more work done or were able to read a book because they didn’t have to drive.”
This isn’t just a one-off promotional event, mind you. Katcher says the company is eyeing an expanded “ditch your car” challenge in Portland later this year, where participants will be asked to commit to not driving their cars for an entire year rather than just one month.
The promotion gives Lyft an opportunity to talk about the high costs of personal car ownership, a pet cause for the company’s co-founders, Logan Green and John Zimmer. For years now, Green and Zimmer have used their platform as CEO and president of Lyft, respectively, to promote big ideas about the future of transportation. They have released policy papers predicting the end of personal car ownership in major cities by 2025, calling for more people to carpool by charging a fee to those who don’t and encouraging US households to sell their second cars to save money and reduce congestion. Lyft recently set the goal for shared rides (carpooling, bike / scooter / car-sharing, etc.) to account for 50 percent of the trips on its platform by 2020.
Owning a car may be convenient, but in a big city, it can also be expensive
Owning a car may be convenient, but in a big city, it can also be prohibitively expensive. Owning a car in Chicago can cost as much as $13,000 a year, or over $1,000 a month, for fuel, parking, maintenance, and general upkeep. Katcher says the goal of the “ditch your car” challenge is to prove that other mobility options exist — and, more often than not, they’re cheaper.
Lyft and its much larger rival Uber are in a mad dash to become one-stop shops for all urban mobility needs. Uber bought dockless bike-share company Jump, invested in electric scooter startup Lime, and is integrating Lime’s scooters onto its app for users to rent. Uber’s CEO has said he wants to find a way to integrate public transportation like subways and buses into the app as well.
Lyft has been hard at work on its own multimodal strategy. The company hired a head of bike and scooter policy back in April, and it shelled out $250 million to acquire Motivate, the largest bike-share operator in the US (including Chicago’s Divvy bike-share system). It’s been beta-testing in-app bike and scooter options since last June. Lyft is also reportedly in talks with another scooter startup, Spin, about adding electric two-wheelers to its app. More recently, the company said it would offer steep discounts to customers who use its bikes and scooters to get to and from mass transit hubs. And the company recently unveiled its first app redesign in three years, with a spotlight on shared rides and public transportation.
Lyft has been hard at work on its own multimodal strategy
The economic argument for Uber and Lyft to expand into personal, electric-powered vehicles seems clear: riders can use them to supplement ride-hailing trips or to zoom by stalled cars traffic in congested cities. Recently, Uber released data that suggests some of its customers are replacing short-distance car trips with bike rides.
This all allows these companies to tell a compelling story: ride-hailing complements public transportation, and it can help get personally owned vehicles off the road for good. But that often flies in the face of published research, which frequently suggests that the opposite is true.
While ride-hailing companies are adding non-car options for people to get around, they are also adding to congestion problems in major cities. A recent study by transportation expert Bruce Schaller found that transportation network companies like Uber and Lyft added 5.7 billion miles of driving in the nation’s nine largest metro areas at the same time that car ownership grew more rapidly than the population.
Uber and Lyft added 5.7 billion miles of driving in the nation’s nine largest metro areas
Shared ride services such as UberPool, Uber Express Pool, and Lyft Shared Rides, while touted as reducing traffic, actually add mileage to city streets, Schaller concluded. Even with these shared services, ride-hailing apps put 2.6 new vehicle miles on the road for each mile of personal driving removed, for an overall 160 percent increase in driving on city streets.
To counter this research, Katcher cites internal surveys that found almost 42 percent of Chicago drivers are using their cars less because of Lyft, and 29 percent see car ownership as less important.
“Congestion is an incredibly complex topic, and there’s been a lot of studies to come out showing both aspects of that,” he said. “There are plenty that are out there, and more coming, that actually show Lyft is not contributing to congestion as much you see from these other reports.”
That said, Katcher says transportation network companies are still only a fraction of the total number of vehicle miles traveled in the US — less than 2 percent — and therefore, they can’t be blamed for all of its problems.
“We know that Lyft is not the only answer,” he said. “We cannot physically put enough cars on the road to satisfy the transportation needs of everyone. We need public transit. We need rail. We need shared mobility options like Lyft. We need biking and walking and everything else to make that a no-brainer for folks. That’s what we’re trying to achieve.”