Lyft is launching a new delivery service aimed at helping drivers earn money during the novel coronavirus pandemic. As demand for ride-hailing collapses, Lyft’s new pilot program will tap drivers to deliver “essential” items like groceries, medical supplies, and home goods.
For years, Lyft has lagged behind its rival, Uber, in delivery, but with the pandemic leaving many drivers out of work and the demand for delivery rising, the company is finally wading in. The initiative, first teased last month, is called Essential Deliveries, and it will be available in 11 cities — including Atlanta, Dallas, and Seattle — to start out.
The delivery service will look a lot different than customer-facing services like Uber Eats, Door Dash, and Instacart. Approved partners, which include government agencies, local nonprofits, businesses, and health care organizations, can schedule customer deliveries through an online portal that will then be picked up by Lyft drivers.
Recipients will include seniors and people with compromised immune systems who are looking to minimize risk of exposure to COVID-19. Lyft says it will also deliver to low-income individuals and families that lack access to reliable transportation. For example, one of Lyft’s approved partners, Dole Packaged Foods, will use the service to deliver fruit products from its warehouses to senior facilities in Seattle.
Lyft says it will expand the program across the country as it signs up more partners. The company is currently only available in North America.
Delivery isn’t the only way Lyft has had to adapt during the pandemic. The company is also providing free and discounted bike-share passes and e-scooter rides to essential workers in half a dozen cities. Free or cheap bike and scooter trips are especially useful as public transportation ridership continues to plummet in most cities and ride-sharing is not seen as a safe alternative. In fact, there has been a surge in cycling in New York City, Philadelphia, and Chicago.
Of course, Lyft’s ride-sharing business has plummeted as health officials instruct people to avoid unnecessary travel. The company’s rides business has been cut in half in recent weeks, according to The Information. Lyft’s revenue after paying drivers is likely to be less than $150 million a month currently, down from about $260 million a month during the first quarter of last year, the publication reports. Uber has also seen a huge drop in demand and sales.
The pandemic has also exacerbated Lyft’s labor problems. Both companies have come under fire for classifying drivers and delivery workers as independent contractors. Sen. Elizabeth Warren (D-MA) wrote a letter to gig companies calling on them to “reclassify your delivery workers as employees, rather than independent contractors, and ensure they are provided a full suite of employee protections and benefits.”