Lyft has not been shy about its intent to join the self-driving car bandwagon. Recent pronouncements, however, reveal more details into this ambition, which is widely seen as an aggressive strategy to challenge Uber. The latter currently holds the number one position in the ride-hailing service industry.
The plan, according to John Zimmer, Lyft cofounder and president, is to own a fleet of self-driving cars and these vehicles will supposedly constitute the majority of Lyft's vehicles in the next five years. This statement can immediately be linked to its competition with Uber, which announced that it has began to carry passengers in self-driving cars last Sept. 14 in Pittsburgh.
Certainly, Lyft appears to be playing catch up to its rival. That is why it is now working feverishly on its self-driving vehicles through a $500-million-collaboration with GM and Cruise. The company's partners are involved in developing tangibles such as sensors and the software system behind the wheels.
Lyft's role reportedly covers the solution to problems that include the possible challenge in connecting users to self-driving cars. Zimmer sees this role as crucial since he believes that they could constitute Lyft's competitive advantage in an app-driven industry that is expected to resemble the way consumers choose hotels and airlines.
According to Zimmer, Lyft will work to ensure that it has edge on the interior experience and the quality of service.
The latest move toward self-driving vehicles is not only aimed at strengthening Lyft's position against Uber. Recently, the company vowed to dominate future transportation, one that will expectedly be characterized by the elimination of private car ownership. The company claimed that this phenomenon will transpire by 2025.
"As a country, we've long celebrated cars as symbols of freedom and identity," Zimmer said. "But for many people — especially millennials — this doesn't ring true."
Lyft cited the cost of owning and maintaining a car in the United States today as a critical variable. The company estimates that around $9,000 is spent annually by consumers and it believes that it will be responsible for an uptick in demand for less expensive transportation options.
Lyft expects that the elimination of human drivers in its fleet of self-driving vehicles will significantly drive its fees down, eventually displacing private cars in the process. This emergent business model is radically different than the approach preferred by Tesla, which rents its self-driving car to customers.
"Tesla CEO Elon Musk ... is right that a network of vehicles is critical, but the transition to an autonomous future will not occur primarily through individually owned cars," Zimmer stressed. "It will be both more practical and appealing to access autonomous vehicles when they are part of Lyft's networked fleet."