Lyft Gets Into The Car Rental Game
Ride-sharing company to compete in a far different industry
Ride sharing-competitors have long been a burr in the saddle of the car rental industry, taking a bite reportedly as large as $3.2 billion out of the market. Now Lyft, one of those businesses, is bringing a new strategy to compete with the rentals head-on.
On Thursday, Lyft announced it will be launching Lyft Rentals, an offshoot of the company that for now, is only available in San Francisco, enabling customers to rent vehicles for as long as two weeks. On launch day, sedan rentals were up for grabs for a daily fee of $35, but depending on booking circumstance, may jump as high as $149 a day on weekends. Rider credit incentives are available for $20 on one-way trips between lots in San Francisco, Los Angeles and Oakland, with no add-on mileage or refueling charges.
Lyft Rentals hasn’t made its fleet size public although it did reveal that customers can currently choose between a Mazda 3 sedan, a Mazda CX-5 SUV, a Volkswagen Passat and a Volkswagen Atlas SUV. For longer trips, Lyft has rider credit incentives up to $20 for one-way trips. The company added it had been testing the rental business model in San Francisco for several months.
While the company plans to continue its ride-sharing service, it didn’t reveal any motives for getting into the car-rental market, although decision-makers probably smelled an opportunity. Stats issued earlier in December revealed that despite the threat of ride-sharing competitors, all the major players performed well financially in 2019. The industry raked in a record $31 billion worldwide this year, a 5.3 percent jump over the 2018 sum of $30 billion.
While conglomerates Enterprise, Hertz and Avis Budget Group led the charge in revenue, it may have been encouraging to Lyft that a few independents also did well. In particular, Sixt reported 2019 earnings were at $365 million followed very closely behind by Advantage at $360 million.
Meanwhile, fellow ride-sharing competitor Uber has not announced plans to follow Lyft’s lead. The company has been preoccupied with its other ventures, including Uber Eats which hit the one-billion mark in deliveries in 2019. It’s also been pushing its other revenue stream of electric bike and scooter rentals, which recorded a global total of 24 million miles this year, five times what was reported in 2018.