Monday, June 13, 2016

"Lyft’s $5.5 Billion Plan for World Domination"

Well that is certainly cheaper than the $12.5 billion that Uber has raised (so far)
From Vanity Fair:

The founders of Lyft talk about Uber, Carl Icahn, and driverless cars
When Logan Green visited Zimbabwe, in 2005, he was taken aback by the country’s widespread use of minivan taxis, or kombis, that ferried groups of people around with staggering efficiency. What if a groundbreaking technology could be applied to this phenomenon, he wondered, and the service operated at scale? So he decided to start a ride-sharing company of his own, Zimride, and by some coincidence or fate (O.K., it was a Facebook post that a mutual friend had shared), he was introduced to a guy who could have named the start-up after himself: John Zimmer. Zimride eventually rebranded and pivoted to be what’s now known as Lyft.

Lyft, once considered Uber’s little nemesis, is now trying to eat the the $62.5 billion start-up’s lunch. Starting with a $100 million capital infusion by Carl Icahn in 2015, Lyft has become a major global competitor and tormentor. Now valued at $5.5 billion, Lyft has partnered with China’s Didi Chuxing, India’s Ola, and Southeast Asia’s Grab, and indirectly forced Uber to keep up in those markets. (Hence the company’s announcement of a recent $3.5 billion investment from Saudi Arabia’s sovereign wealth fund.) Lyft also took on a major investment from General Motors earlier this year, and has taken steps toward self-driving cars.

Here, Green and Zimmer speak about a future without car ownership, autonomous driving, gender issues, and their theory about treating drivers right, among other topics. What’s your ultimate vision for the future of transportation?
Logan Green: The experience we’re seeing today is just the tip of the iceberg. And as autonomous vehicles come to market and become more of a mature technology, the majority of the population, we believe, will stop choosing to own a car. When you imagine the experience of being able to open up the app and choosing whatever type of car you want, the car is 30 seconds away, waiting for you, picks you up in an instant—when you’re going to work you can have the cheap commuter car, when you’re going on a family trip you can have a family Lyft, a big S.U.V., a nice car for date night.

You’ll have whatever car you want whenever you want. All the hassles of car ownership go away. You’re never missing a day of work to take your car to the shop. You’re never spending time at a gas station. Parking lots go away. Look at any street and you see cars parked on both sides. That all changes. Ultimately, cities evolve to be built more around people than cars.

John Zimmer: That’s what’s most exciting to us. By rebuilding transportation so that you’re not owning this thing that just sits there all the time, you get to rebuild cities in the process. If we do this right as a country, we have a chance to re-create our cities with the people, rather than cars, at the center. Our cities today have been built for the car. They’ve been built for car ownership. Imagine walking around in the city where you don’t see any parking lots and you don’t need that many roads.

How did Lyft’s partnership with GM come about?
Zimmer: Dan Ammann, the president of General Motors, came to our office toward the end of last year. They, too, believe that car ownership will change dramatically in the near term, specifically in the urban environment. And they were excited to be part of that. Then I gave a speech at the L.A. Auto Show, titled “The end of car ownership,” about how millennials don’t care about cars and don’t want a $9,000 ball and chain. We had already scheduled a meeting with General Motors for after the talk, and had this second strategic meeting with them about an investment. The investment was made, and it focuses on two areas.

Green: The first element is Express Drive, which provides vehicles to drivers. With Express Drive we have 160,000 people who have applied to be Lyft drivers who didn’t have cars that qualified, and Express Drive is about providing a vehicle for them. We launched that three months after we kicked off the partnership in Chicago.

The second piece, which is longer term, is about autonomous. We’re working closely with GM on planning out what the future of autonomous looks like, with the concept that you’d be requesting those vehicles through the Lyft network.

When do you think we’ll see driverless cars?
Green: I think they’re going to happen both sooner and longer than a lot of people think. In the next few years you’re going to start seeing autonomous vehicles on the road, but they’ll have limited capabilities. They won’t be able to drive on every street. They won’t be able to drive above 25 miles an hour. They won’t be able to drive in all-weather conditions. It’ll take those cars a number of years to be able to evolve to handle all conditions. It’ll be a while longer before you’re seeing completely capable autonomous vehicles.

Is there any tension between Lyft having this fleet of drivers and this future where cars don’t need drivers?
Zimmer: Autonomous vehicles, because they’ll be able to operate at a lower cost, will be able to pull more consumers into the Lyft network. And as you have more people switching from using their own car, they’ll be taking more rides that still require a person behind the wheel. We think that in the foreseeable future of the next five-plus years, the number of human drivers we need on the road is going to keep going up. Longer term, of course, when the cars are fully autonomous, there will be a big shift....