Lyft Co-Founder John Zimmer Drives And Dishes On Automation, Car Subscriptions, And Cash
Lyft Co-founder John Zimmer John Sciulli / Getty Images
Zimmer’s final pickup was Siaga, an American Airlines flight crew member in town for New Year’s who needed to get to H&M for an emergency New Year’s outfit. Siaga could splurge a bit since his ride was on Zimmer, placing him in a growing group of people who have had their rides subsidized by Lyft.
Lyft, according to Bloomberg, has promised investors to keep its losses below $150 million per quarter. And in December, a Bloomberg report stated that although Uber would make more than $5.5 billion in net revenue in 2016, it could lose $3 billion in the process. These reports led some to question whether ride hailing companies were real businesses, so I asked Zimmer if they were. He responded affirmatively.
“On a per-ride basis, rides are profitable,” Zimmer explained. The losses, he said, come from trying to win over new passengers (you may have seen people handing out $50 Lyft credits on a street near you — this is part of that effort). “Having a certain amount of scale is the early part of the business, but doing 17 million+ rides every month will lead us to a profitable business.” Lyft, he said, has tripled its number of rides since we met last year.
So when will Lyft be profitable? Zimmer wouldn’t say. But he said the company has a plan to use less money than it’s raised to get to profitability. “When you look at the unit economics per ride, there is a comfortable margin there that will allow us to cover all our expenses and become profitable.”
With that, it was my turn to be dropped off. Seems like Lyft is in good shape to be around next New Year’s Eve too, so we’ll pick this up then.