Lyft, GM partner on car rental service(Read article summary)
Lyft and GM are teaming up to bring a car-rental service to Chicago and other major metropolitan hubs.
Can those without suitable cars become Lyft drivers? A car-rental program created by General Motors and the ride-sharing program aims to let people do just that.
The service, called Express Drive, will cater specifically to Lyft drivers. Express Drive will let them rent cars for $99 per week, and 20 cents per mile. It will start in Chicago but eventually roll out to other cities, including Boston, Washington, and Baltimore. Uber has a similar program through a partnership with Enterprise Rent-a-Car in Denver and Cox Automotive's Flexdrive.
The goal of these programs is to attract and retain driving talent. Many people who apply to be drivers on Lyft’s platform want to be able to drive with the service, but their vehicles are either too old or don’t have four doors. According to Lyft President John Zimmer, there are more than 150,000 people across the US who have applied to be a Lyft driver but haven’t qualified because of their cars, and 60,000 of them in Chicago alone.
“Express Drive solves this problem and offers millions of potential drivers a dynamic way to earn money while driving on the Lyft platform,” a post on the official Lyft blog reads.
Current Lyft drivers will not be required to pay a weekly rental cost, provided they give a certain number of rides. After the 40-ride threshold, the 20-cent mileage fee is waived; after 65 or more rides, the $99 weekly fee is also waived.
Lyft’s announcement regarding Express Drive comes two months after GM invested $500 million in the ride-hailing startup, during Lyft’s $1 billion Series F funding round. GM has been betting big on the world of ride-hailing, car-sharing, and self-driving vehicles, and its investment in Lyft illustrates the automaker’s commitment to developing these innovations. As part of that $500 million deal, GM gained a seat on Lyft’s board of directors. In exchange, GM is providing its vehicle portfolio and OnStar services to Lyft drivers and customers.
The deal also included a provision for GM to participate in a Lyft rental program. According to the terms of the deal, GM is the preferred provider of short-term use vehicles for Lyft drivers through rental hubs in various metropolitan locations. In the Express Drive program, Lyft retains all revenue from the rides, minus the portion that the driver receives. GM doesn’t take a cut from any transactions made.
The Express Drive program falls under the "Maven" umbrella, the name for GM’s car-sharing programs that was announced in late January and brought in industry professionals from Google, former Uber rival Sidecar, and Zipcar. Billed as a "personal mobility brand," Maven includes several concepts. These include a car-sharing program that is currently being piloted in Ann Arbor, Mich., but is set to be introduced into other cities over the course of the year; a residential car-sharing program currently under operation in Chicago and New York with partner apartment buildings; and a peer-to-peer car-sharing service that for now operates only in Europe.