SAN FRANCISCO — In an Uber echo, ride-hailing startup Lyft will begin offering black-car and SUV rides in an effort to broaden its consumer base.
Lyft Lux and Lyft SUV debut Thursday in five markets — San Francisco, San Jose, Los Angeles, New York and Chicago — with 20 other cities coming on line in mid-June.
Expect the services to cost up to double that of a Lyft Premier ride, and up to five times a basic Lyft fare, says the company’s chief business officer David Baga.
“This has been a persistent request from driver and rider quarters for some time, and the timing is right now,” says Baga. “To help cover our growing demographics, we want to be sure to have rides for that important business meeting or a special date.”
Initially, both services will debut thanks to existing Lyft drivers who happen to have vehicles that meet Lux and SUV guidelines. Baga adds that “it won’t be shocking to soon find other drivers with these vehicles operating on other platforms bringing their cars over to us as well.” Many gig-economy workers drive for both Lyft and Uber.
For Lyft Lux, the vehicles need to be fairly high-end black cars and feature leather or leather-like interiors, while SUVs must seat at least six. Drivers need ratings of at least 4.7 out of 5 to qualify.
When Uber kicked off the ride-hailing phenomenon in 2009, it started with a sole focus on finding extra rides for idle black car drivers, and later expanded to a broader market through services such as UberX and UberPool.
Lyft, which is a fierce battle with market leader Uber for U.S. market share, has a particularly strong Millennial base given that the company grew out of a college ride-share platform.
It’s now in 300 U.S. cities, after adding 100 cities in the past few months. Recent partnerships with Blue Cross Blue Shield as well as a push into corporate travel are efforts to increase the scope of its service.
With a $7 billion valuation, Lyft is one-tenth the size of Uber. But it has been emboldened of late as its better-funded rival faces a series of crises, ranging from accusations of a sexist workplace to an investigation into its practice of manipulating regulators through its app.
In the first quarter of 2017, Lyft logged 70 million rides, more than double its year-ago number.
But despite the billions of dollars raised by Lyft and Uber, investors remain concerned about the ride-hailing business model.
Both companies have used some of their cash to offer driver incentives that cut into the bottom line. And both are pushing ahead — Uber on its own, and Lyft via a partnership with General Motors — in the quest for self-driving cars which would eliminate the costly driver from the financial equation.