Two months after General Motors announced a $500 million investment in transportation startup Lyft to work on autonomous cars, the pair are launching their first service together. No, it’s not a self-driving car fleet (yet); it’s a short-term rental program called Express Drive: GM will provide all-in rental cars to Lyft drivers, who will pay between $99/week plus mileage and nothing at all, depending on how many Lyft rides they provide using the vehicles.
Going live first in Chicago with 500 vehicles, all of a single model — the Chevy Equinox — Express Drive will then roll out to three more cities — Boston, Washington, DC and Baltimore — before expanding elsewhere (and potentially to other car models).
Lyft and GM believe that Express Drive will help the pair lay the infrastructure for fleets of self-driving cars down the road. But one of the more immediate aims of Express Drive is simply to put more Lyft vehicles on the streets today.
In a press call with journalists on Monday, Lyft co-founder John Zimmer said that in the four cities where Lyft and GM are launching Express Drive first, 150,000 people that have signed up to drive for Lyft could not do it because they did not have suitable cars. In Chicago alone, there have been 60,000 applicants, he noted.
“We’ve now made car ownership optional on both sides of the market,” Zimmer said, referring to drivers and passengers. “Now you don’t need to own a vehicle to make money on the platform, or to give rides to passengers.”
Lyft has launched past initiatives like Express Pay to sweeten the deal for drivers to choose Lyft over working for rivals like Uber. Express Drive is also constructed to incentivise drivers to take more Lyft rides.
Those who use the Express Drive car for less than 40 rides per week pay $99/week plus 20 cents per mile. Those who use the car for between 40 and 64 rides per week pay $99/week flat. And those who use the car for 65 or more rides per week pay nothing at all. And while drivers pay for gas, all other services including insurance are thrown into the single price, regardless of whether you are ‘on call’ with a passenger or driving the car for personal use, Lyft tells me. Cars can be rented for between one and eight weeks.
Lyft and GM are not disclosing the specifics of their financial terms for Express Drive but see it as a way of growing new revenue streams in their respective businesses. “We are still assessing the size of the program, but John and I are both hoping for solid financial results,” said Julia Steyn, GM’s VP of urban mobility.
Autonomous cars have been touted as a chief motivation behind GM’s strategic investment in Lyft — and clearly it is a big priority with GM, which just last week acquired driverless car startup Cruise. But it will be years before these vehicles are widely in use. So the connection between this concept and today’s rental news was a bit more tenuous.
Asked how the two were related, Steyn at GM said that Express Drive would help lay the groundwork for future vehicles.
“This is going to build structure for autonomous vehicles,” Steyn said. “To create the infrastructure in many cities is very important, starting with ride sharing with Lyft… We are looking at a different future going forward. Vehicles will… need to be managed. This is about creating better assessment and vehicles on demand.”
Indeed, if self-driving cars in their early days turn out to be cost prohibitive or impractical for the average consumer, you can imagine how a company like GM might consider ways of deploying fleets of them for specific use cases… like transportation services.
GM said it would implement some of the services around Express Drive by way of Maven, its new business unit that includes all the company’s work on car ownership models of the future.
Express Drive services will include access to OnStar — GM’s in-vehicle security, diagnostics, turn-by-turn navigation and calling system — along with maintenance and warranty servicing, and insurance.
This is not the first time that Lyft has offered a short-term leasing program to grow the number of drivers in its fleet. In October last year, it announced a rental deal with Hertz. But that program, which is now live in Las Vegas and Denver, seems to be more expensive — respectively starting at $119 and $139 per week — and it’s also without the other perks that GM and Lyft are throwing into the deal.
Nor is Lyft the only on-demand transport service that has looked to rental and leasing programs to boost its fleet of vehicles on the road. Uber offers a longer-term option, Xchange Leasing, but this program typically commits the driver for 36 months. Uber has also partnered with Enterprise for short-term rentals.
Others further afield, like Lyft’s network partner from India, Ola, also have built out rental programs to equip drivers with better cars. And there are other companies like HyreCar that exist solely to rent vehicles to drivers on these services.
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