Just before its initial public offering, ride-hailing giant Lyft announced a nationwide initiative that will funnel $50 million—or 1 percent of profits, whichever is larger—to support local transportation initiatives in U.S. cities.
The announcement included some plans that might be surprising to Lyft’s new investors—and potentially difficult for an automobile-centric company to deliver—cities with fewer cars.
City Works, as Lyft’s program is called, was announced early Friday morning at a pink confetti-laden event held at a former car dealership in downtown Los Angeles. Former U.S. transportation secretary and chief policy officer Anthony Foxx said Lyft is partnering with local advocacy groups that are working to improve transportation equity and reduce emissions.
“At Lyft, we know that working together we can do more to make cities people-focused and not car-focused,” said Foxx. “And, in nearly every city, there are grassroots leaders, non-profits, activists and drivers who are making city life better, more inclusive, more equitable and more sustainable. We want to lift up this heroic work.”
At at 5:15 am (!) press conference for @lyft timed to today’s IPO. That’s @anthonyfoxx announcing City Works, a plan to invest $50M or 1% of profits into local transportation efforts, starting with LA. pic.twitter.com/nc9320tItm— Alissa Walker (@awalkerinLA) March 29, 2019
Lyft did not specify which of its 300 cities would get the money, but Foxx noted in this morning’s remarks that $5 million will go to LA in 2019. Among the efforts to be funded are providing free ride-hailing services for the city’s homelessness programs and the establishment of community centers for drivers. More partnerships will be announced, according to a Lyft spokesperson.
In addition to free or subsidized rides for people without access to cars, City Works investments will include the deployment of more e-scooters and e-bikes in a way that will help connect people from low-income or underserved communities to last-mile transit connections, Caroline Samponaro, Lyft’s head of bike, scooter, and pedestrian policy, tells Curbed.
“We have an opportunity where we can challenge that idea that streets are built for cars,” says Samponaro, who came to Lyft from the transportation advocacy world. “We can challenge the assumption that the car needs to be at the center of every transportation solution.”
City Works will also fund collaborations with local groups to figure out more ways to share rides and lessen Lyft’s impact on urban congestion. Last year, Lyft became carbon neutral, offsetting all its emissions in a quest to eventually eliminate them, and set a goal for 50 percent of all rides to be shared by 2020.
Mike Masserman, Lyft’s head of social impact, points to Denver, where Lyft is working closely with transit agencies to subsidize last-mile rides to bus and rail. Denver is also one of a handful of cities where Lyft includes a Shared Saver option, which incentivizes carpooling by offering lower prices for pickups that occur on certain dedicated routes.
“It’s making it even more affordable for people, who might have to walk a few blocks,” Masserman tells Curbed. “But it’s also great for the driver working along the same route.”
Part of Lyft’s challenge will be how the company will move towards this multimodality when its core business model was built around cars—and differentiating itself from the flood of ride-summoning startups offering a wider range of transportation options.
Most ride-hailing and micromobility companies already offer programs that subsidize rides for low-income communities, or are required to by the U.S. cities they operate in. Some companies have offered to help pay for infrastructure, like scooter company Bird’s previous commitment to pay for bike lanes in the cities in which it operates. And Lyft rival Uber, which is also prepping for an IPO in April, has proposed a similar multimodal strategy as part of its goal to become the “Amazon of transportation.”
But, as confirmed by many studies, just offering more transportation options hasn’t equaled fewer cars—yet. As Aaron Gordon writes at Jalopnik, “Lyft wants to appear ‘anti-car’ while missing the point on why reducing car usage in crowded cities can be a worthy goal.”
While Lyft’s announcement proposes cities designed “around people instead of cars,” the inclusion of driver-focused community centers in today’s announcement speaks to how the company must continue working to ease the burden on present-day drivers, who are classified not as employees, but independent contractors.
More than 2,800 Lyft and Uber drivers went on strike in LA earlier this week to protest wage restructuring that lowered their pay. An estimated 40 percent of LA drivers are struggling to pay for vehicle-related costs like gas and maintenance, according to a UCLA study. In a statement through Rideshare Drivers United, LA-based driver Sinakhone Keodora said low wages and high overhead have forced him to live in the vehicle that he rents from Lyft for $242 a week.
Self-driving technology, promoted by Lyft, gives boosters a reason to ignore the needs of drivers, writes Andrew J. Hawkins at The Verge. “Investors don’t seem too worried about the upheaval among drivers, perhaps because they assume such workers will soon be obsolete.”
What remains to be seen is how Lyft’s localized support will go beyond offering free rides and promoting advocacy work to help fund on-the-ground improvements that actually reduce traffic and promote transit equity. And, now that the company has gone public, if the market—which is rallying around Lyft’s car-based past, not necessarily its car-free future—will reward that vision.