As the demand for ride-hailing takes a beating because of the Coronavirus Pandemic, President of Lyft Inc., John Zimmer, has announced expanding their business by introducing food delivery services to their customer base.
Pushed By COVID-19
Lyft only provided transportation until it witnessed society being reformed by the pandemic to offer them an alternative way to multiply their revenue with food delivery services. Post lockdown, there has been a constant demand for delivery, which has finally pushed Lyft into the food delivery industry.
Lyft has claimed that their delivery services will be available in Austin, Atlanta, Texas, Houston, Dallas, Orlando, Indianapolis, Phoenix, San Francisco, Florida, San Antonio, Seattle, and San Diego. It is also said that the company is in talks to find additional partners so that the range of their delivery services can increase its expansion to a broader consumer range.
After the announcement of this new opportunity on March 20, around 120,000 drivers from all across the United States have signed up for the delivery service.
Satisfactory results from their pilot programs have allowed Lyft to enlarge its market range, permitting drivers to deliver essential items such as groceries, home goods, and medical supplies to the masses.
How Is It Going To Stand Out?
The food delivery space is very crowded with names like GrubHub, DoorDash, Postmates, etc. But Lyft does see an opportunity.
In a Q3 earnings conference call transcript posted by The Motley Fool, Lyft’s President John Zimmer shared that current industry models call for high commissions, which is something all retailers struggle with. This creates a door of opportunity for Lyft to introduce an innovative approach and a more incentivized model.
Competing Against Uber Eats
The act of expansion has also given way for Lyft to compete against its most significant competition Uber. Last week, Uber reported it generated $3.1 billion in Q3. Down 18% from a year ago for the same period. The bulk of Uber’s revenues in 2020 has been from its food delivery services, Uber Eats.
