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Lyft-backed plan to fund electric cars flops in California • ZebethMedia

By zebethcontrolPosted on November 10, 2022Posted in Climate, electric vehicles, Gavin Newsom, Lyft, Michael Moritz, Ron Conway, TransportationNo Comments

California voters shot down a plan to make electric vehicles more affordable for some residents, dealing a blow to Lyft and the EV industry alike. Proposition 30 would have taxed residents making more than $2 million a year to subsidize electric cars and public charging stations as well as funded wildfire prevention programs. Even with just 41% of the votes tallies so far, the defeat was clear. As of Wednesday afternoon, some 59% of voters rejected the proposition. The measure’s defeat comes as several states ready bans on gas-powered vehicles in urgent efforts to cut climate pollution. Prop 30’s primary backer was Lyft, which paid more than $48 million to support the would-be wealth tax. The measure’s opponents — which included Democratic Governor Gavin Newsom and venture capitalists Michael Moritz and Ron Conway — cast Prop 30 as a “Lyft grift,” calling it a “scheme to further line the pockets of Silicon Valley tech billionaires.” Yet, Prop 30 did not include carve-outs for ride-share companies. It would have raised tens of billions of dollars to push down the price of electric cars for individuals, including drivers for ride apps like Lyft and Uber. Both companies have committed to going electric by 2030, and this measure could have helped them hit their targets. Earlier this year, California mandated that nearly all ride-share vehicles go electric by 2030, as part of a broader effort to gradually push combustion engines off roads. Although the state already operates some programs to help cover the cost of going electric, Prop 30 could have provided further assistance. Without it, ride-app companies may be forced to fork up additional cash, one way or another, to incentivize their drivers to switch, so they’ll comply with the state’s mandate. Though more affordable options are gradually coming to market, electric vehicles are generally still in short supply, and most are too pricey up front for most people. This is no good for the climate, because light-duty vehicles like cars and SUVs make up more than half of transportation-related emissions in the U.S., per the EPA. On the NASDAQ, Lyft closed at $10.64, down by almost 2.4% from the prior day. The decline pales in comparison to the nosedive Lyft shareholders suffered on Monday, after disclosing hefty losses in its latest quarterly report. Earlier this month, Lyft laid off 683 employees, or about 13% of its workforce.

Early results show defeat for California Prop 30, a plan to tax the rich and fund EVs • ZebethMedia

By zebethcontrolPosted on November 9, 2022Posted in Climate, electric vehicles, EV charging, Lyft, TransportationNo Comments

Californians seem to be voting against a proposal on the midterm election ballot that would tax the wealthiest Californians to help pay for electric vehicle tax incentives and EV charging infrastructure in the state. With about 53% of the state’s votes counted, Proposition 30 was losing 57.3% to 42.7%, according to California’s Secretary of State. California is already a leader in promoting a shift to electric cars and was the first state to ban the sale of gas-powered cars by 2035. Proposition 30, as the ballot proposal is called, promises to accelerate that shift by adding an additional 1.75% tax on incomes above $2 million. Aside from helping Californians, particularly low-income residents, shift to EVs, 20% of the funds would be used to pay for wildfire prevention and firefighter training. Ride-hailing company Lyft backed Prop. 30, contributing 95% of the campaign’s total funding, or $45 million. Lyft aims to have 100% of the vehicles on its platform be electric by 2030, so making EV incentives more available to low-income drivers would massively benefit the company. Lyft, which recently laid off 13% of workers, didn’t hit revenue and active rider targets in its third quarter earnings, causing its stock to fall and investors to fear the ride-hailing company is ceding too much ground to competitor Uber. Opponents of the ballot, including California’s Governor Gavin Newsom, claim Lyft just wants to benefit itself at the expense of the rich. They argue it requires taxpayers to pay for EV subsidies that Lyft, as well as Uber, would have to pay on their own come 2030, when California law stipulates rideshare companies need EVs to account for 90% of their vehicle miles traveled. Curiously, Uber has stayed quiet on the matter. “Prop. 30 is being advertised as a climate initiative,” Newsom says in an advertisement slating the proposal. “But in reality, it was devised by a single corporation to funnel state income taxes to benefit their company. Put simply, Prop. 30 is a Trojan Horse that puts corporate welfare above the fiscal welfare of our entire state.” The California Democratic party, of which Newsom is a member, endorsed the ballot proposal. Newsom has teamed up with the Chamber of Commerce and other billionaires to oppose a proposal that they think will cause wealthy Californians to leave the state. Labor groups and environmentalists are defending the measure.

Lyft takes $135.7 million hit on Argo AI shutdown • ZebethMedia

By zebethcontrolPosted on November 8, 2022Posted in Argo AI, autonomous vehicles, Lyft, ridehailing, TransportationNo Comments

Ride-hailing company Lyft lost $135.7 million in the third quarter due to the shutdown of autonomous vehicle company Argo AI, in which Lyft had a small stake. Late last month, Argo AI closed its doors as its main backers, Ford and Volkswagen, pulled their investments in order to focus on more near-term goals like advanced driver assistance systems in passenger vehicles. Lyft and Argo were working together to test autonomous ride-hailing using Argo’s tech on the Lyft platform. The two companies had launched public robotaxi services in Austin, Texas in September and Miami, Florida in December of last year. Both of those services have now been discontinued, a Lyft spokesperson told ZebethMedia. Lyft did not say how it will adjust its AV strategy in the future, but the company has also partnered with Motional, another AV tech company, to launch robotaxis in Las Vegas in August. Lyft’s losses incurred by the Argo shutdown only account for about a third of the company’s total losses for the quarter. In Q2, Lyft lost $422.2 million, which is a larger cost than the $99.7 million in the same period of 2021 and a net loss of $377.2 million in the second quarter of this year. A bigger portion of Lyft’s losses are attributable to $224.1 million in stock-based compensation and related payroll expenses, an increase from $179.1 million in the second quarter. The uptick is related to the top-up that Lyft issued to employees when its stock price declined earlier in the year, according to a Lyft spokesperson. Lyft said the increase isn’t yet related to the rounds of layoffs from the company, the first of which occurred in July and the second just last week as Lyft tries to cut down on operating expenses. In regards to that reduction in workforce, Lyft expects to “incur a charge of between $27 million and $32 million” in Q4, as well as “a stock-based compensation charge and corresponding payroll tax expense related to affected team members, as well as restructuring charges related to a decision to exit and sublease, or cease use, of certain facilities,” said Elaine Paul, Lyft’s chief financial officer, during Monday’s earnings call. “However, we aren’t able to estimate these charges at this time because they depend in part on our future stock price.” Paul also said Lyft has been working to reduce stock-based compensation next quarter by ceasing new hires in the U.S. and shifting the nexus of hiring away from the U.S. and toward international markets like Canada and Eastern Europe where “there’s a different compensation model with low or no equity.” Lyft misses Q3 estimates For the third quarter, Lyft reported revenue of $1.05 billion, which is slightly less than Wall Street expectations of $1.06 billion. The company’s earnings per share hit -$1.18 versus the $0.09 that was expected. Even active riders, which saw an improvement quarter over quarter, only topped 20.3 million, and the Street had hoped for 21.1 million. That said, Lyft’s revenue per active rider beat expectations of $49.94 at $51.88. Lyft’s stock, which had started to climb after Uber reported strong earnings last week, fell 14.36% Monday in after-hours trading. The company’s shares have slid 69.29% since the start of the year. Lyft closed the quarter with $143.7 million in cash. Looking forward, Lyft expects revenue to be between $1.145 billion and $1.165 billion in the fourth quarter, with revenue growth reaching between 9% and 11% quarter over quarter and 18% to 20% year over year. Part of that growth will come from increased revenue per rider, which is backed by Lyft’s recent decision to increase service fees for riders. Paul said Lyft intends to cut its operating expenses by roughly $20 million in Q4 versus Q3, which is in part due to the reduction in force. John Zimmer, Lyft’s president, said he was confident that Lyft would be able to achieve its Q4 goals regardless of the macro environment. “We’ve been using internally two main cases. One is the growth case, which assumes market bookings grow in the low to mid 20% year over year, and that the labor market stays as tight as it currently is,” said Zimmer during the Q3 earnings call. “And then, internally what we call a recession case where the market growth slows and we see operating leverage through lower driver engagement and acquisition costs if unemployment rises. So in both cases, we have a very confident path to the billion dollars, and in both cases, we’ll continue to focus our R&D spend on marketplace innovation that helps improve the cost basis of the business.”

Lyft lays off 13% of workforce as it tries to slash operating expenses • ZebethMedia

By zebethcontrolPosted on November 3, 2022Posted in Lyft, ride hailing, TransportationNo Comments

Lyft said Thursday it is laying off 13% of its workforce as it tries to reduce operating expenses, according to a securities filing. The ride-hailing company described the cuts as proactive step to ensure it “is set up to accelerate execution and deliver strong business results in Q4 of 2022 and in 2023.” Lyft also reiterated Thursday it is sticking with its previously stated guidance on third quarter 2022 revenues, contribution margin and adjusted EBITDA. It has targeted $1 billion in Adjusted EBITDA with more than $700 million in free cash flow for 2024. Lyft said terminating these 683 employees will cost between $27 million to $32 million in severance and benefits. The company said it expects to record a stock-based compensation charge and payroll tax expense related to restructuring in the fourth quarter and the first quarter of 2023. The notice comes a few months after Lyft established a hiring freeze, laid off about 60 people and dropped its in-house car rental service. The hiring freeze, which went into effect in August, affects all departments in the U.S. and is expected to last into next year as the ride-hail giant continues to face economic unpredictability. Lyft slow hiring in May in order to bring down costs and drive profitability as its stock continues to take a hit. Lyft’s share price has sunk more than 73% since the start of the year at the time of this writing. Lyft is scheduled to report its third quarter 2022 financial results November 7.

Arrival restructures (again), Bird shrinks and highlights from Disrupt • ZebethMedia

By zebethcontrolPosted on October 24, 2022Posted in Lyft, Rivian, The Station, TransportationNo Comments

The Station is a weekly newsletter dedicated to all things transportation. Sign up here — just click The Station — to receive the full edition of the newsletter every weekend in your inbox. This is a shorter version of The Station newsletter that is emailed to subscribers. Want all the deals, news roundups and commentary? Subscribe for free. Welcome back to The Station, your central hub for all past, present and future means of moving people and packages from Point A to Point B. Wow, what a week over here at ZebethMedia! Our annual tech bonanza (I can’t even call it a conference) was a flurry of activity. Our expo floor was packed, the roundtables were oversubscribed and the two stages showcased some of the most interesting people in tech. The event culminated as it always does: naming the Startup Battlefield winner. That process started with the Startup Battlefield 200, handpicked companies (from thousands of applications) that were vetted and chosen to exhibit on the expo floor. From here, 20 startups were selected to compete in Startup Battlefield, where founders pitched before judges for a chance to win $100,000 and the coveted Battlefield Cup. We winnowed it down to five finalists: Advanced Ionics, AppMap, Intropic Materials, Minerva Lithium and Swap Robotics. The judges who reviewed the final five were Mar Hershenson (Pear VC), Yahoo CEO Jim Lanzone, Aileen Lee (Cowboy Ventures), ZebethMedia editor in chief Matthew Panzarino, David Tisch (BoxGroup) and Richard Wong (Accel). In the end, the crown went to Minerva Lithium, a company co-founded by Sheeba Dawood and Hemali Rathnayake that wants to change the way we extract lithium. Minerva has come up with a coordinated polymer framework that extracts critical materials from salt water in just three days and without all the harmful effects on the environment. Minerva can not only extract lithium, which it can sell at battery-grade to battery makers, it can also capture other minerals and possibly purify the leftover water for drinking purposes. Congrats to Minerva Lithium! Oh, before I forget: we’ve opened up pre-registration for 2-for-1 tickets so sign up and we’ll let you know when you can secure your seat at next year’s event. You can always email me at kirsten.korosec@techcrunch.com to share thoughts, criticisms, opinions or tips. You also can send a direct message to @kirstenkorosec Rivian and Lyft at Disrupt RJ Scaringe, CEO at Rivian, and Kirsten Korosec from ZebethMedia at ZebethMedia Disrupt in San Francisco on October 19, 2022. Image Credit: Haje Kamps / ZebethMedia During Disrupt, I interviewed Rivian founder and CEO RJ Scaringe and Lyft co-founder and president Jon Zimmer. Both interviews provided some interesting insights on the challenges of founding and growing a company. There was even a little news in there. Here are some highlights from both. Lyft, Jon Zimmer On past challenges:• It wasn’t Covid, but the sustained and early fight with Uber that Zimmer believes was the hardest challenge that company has faced to date.On autonomous vehicles:“I think it’s too early to pick you know, one winner and so today, it’s about having multiple partners. Ten years from now? It’s too hard to predict.”On Tesla FSD and whether Lyft should tell drivers not to use while shuttling riders:“We do not have have a policy currently. You know, we think that the regulatory bodies are best, you know, when it comes to that level of safety.”On the Biden Administration proposal:“The recent Biden Administration proposal that you’re talking about basically just returns things to the way they were in the Obama administration where all our drivers were independent contractors. Typically, we are governed at a state level. Federal Government is important and matters for all industries, but it’s really interpreted at the state level, of which I would argue we’ve made significant progress over the last few years, California being one example.” Rivian, RJ Scaringe On the future product front:• More than half of Rivian’s 15,000 employees are working on future product pipeline, including the R2 platform, which will focus on smaller and cheaper vehicles• Yes, there will be 400-mile “Max Pack.” Scaringe didn’t provide a timeline.• Micromobility, specifically an e-bike will be part of the lineup On the recall:• A “significant majority” of the more than 12,000 vehicles that were recalled earlier this month.• “It was really powerful for us to respond so quickly, and I think what we saw from customers — of course, there’s frustration on anything like this — but that we were trying to do the best possible job we could. We were authentic about it. We didn’t we didn’t sugarcoat it. We said we’re gonna go fix this. And so it actually has been really quite positive.”On the supply chain:• Think the semiconductor chip shortage was bad? Scaringe said that shortage is “an appetizer to the degree of the sort of supply chain constraint we’re likely to see across the battery supply chain over the next 15 years.” Woof. (that’s my reaction)• “The battery supply chain as we know it for lithium-ion batteries, whether you’re looking at lithium hydroxide or lithium carbonate was built largely around consumer electronics and so it’s very small. It’s not a huge supply chain. And so it has to grow by 20x or on the order of 20x over the next 10 to 15 years. And so the level of investment needed to go build that is is staggering. And moreover, I think the level of risk concentration given that it hasn’t been built in the United States is a real thing.” Micromobbin’ The big micromobbin’ news this week fell squarely into the gloomy category. I’m talking about Bird and its plans to exit several markets across the world, including Germany, Sweden, Norway and “several dozen additional, primarily small to mid-sized markets” across the US, Europe and the Middle East. Deliveroo is partnering with Volt to trial the use of e-bikes for food delivery in the UK. You’re reading an abbreviated version of micromobbin’. Subscribe for free to the newsletter and you’ll get a lot more. Deal of the week ZebethMedia Disrupt kept me pretty busy, but a few

Lyft co-founder says autonomous vehicles won’t replace drivers for at least a decade • ZebethMedia

By zebethcontrolPosted on October 20, 2022Posted in autonomous vehicles, Disrupt 2022, John Zimmer, Lyft, TechCrunch Disrupt 2022, TransportationNo Comments

Human drivers on the Lyft platform aren’t going to be replaced by autonomous vehicles anytime soon, company co-founder and president John Zimmer told the audience today at ZebethMedia Disrupt. “I can’t imagine anytime in the next decade-plus where we would need any less drivers,” he said. While Zimmer envisions autonomous vehicles handling some percentage of rides — anywhere from 1% to 10%, he said — the reality is that trips taken using Lyft represent a tiny fraction of all miles traveled. “What we do in our industry represents maybe 1% of vehicle miles traveled,” he said. “There’s much more room for growth of our overall business.” Over the past decade, more than 112 million Lyft riders have taken over 3 billion rides, and 5 million drivers — “3% of the U.S. workforce,” Zimmer said — had earned tens of billions of dollars. In his talk with transportation editor Kirsten Korosec, Zimmer was hesitant to commit to a timeline on which he thinks autonomous vehicles will enter into broader commercial service. “I always think it’s just a couple years away,” he said, “but it’s super hard to predict. It’s this last percent of a technical problem, and then you have to get the cost down for autonomous vehicles. So it will happen. I strongly believe it’s not a matter of if, but obviously when.” Should it happen, Zimmer thinks that the initial rollout is likely to occur on platforms like Lyft. The best way to commercialize autonomous vehicles, he said, is on a “hybrid network.” Though autonomous vehicles have progressed in their capabilities, they’re still unable to handle every condition they’ll encounter on the roads. Even if they are able to safely navigate 10% of trips, that’s not a sufficient number to bring riders on board en masse. “Imagine being on AT&T or Verizon and making one out of 10 calls. That would not be a good network to be on. Being on the Lyft network, you’ll be able to get ten out of 10 rides. One might be an autonomous vehicle with one of our partners, nine are going to be from our driver community. And so I think what we do is super important and can flex as that technology is ready.” Lyft’s autonomous vehicle strategy has changed significantly in the last year or so. In April 2021, the company sold its self-driving unit to Toyota’s Woven Planet subsidiary for $550 million, saving the company $100 million annually in operating expenses. In place of that, Zimmer said the company has been prioritizing partnerships over internal development. “I think it’s too early to pick one winner,” he said. “Today, it’s about having multiple partners. Ten years from now? Too hard to predict.” While the Lyft network may not have fully autonomous vehicles anytime soon, many of its drivers today are potentially augmented by Level 2 advanced driver assistance systems, known as ADAS, including Tesla’s Autopilot and possibly its Full Self Driving software. While these systems can help drivers in some ways, in some cases, over reliance on them has created perilous, even deadly, situations. When Korosec asked him asked whether Lyft had considered prohibiting the use of Level 2 ADAS like Autopilot or FSD, Zimmer said that Lyft “think[s] that the regulatory bodies are our best regulators when it comes to that level of safety.” Of course, in its terms of service, Lyft already regulates its drivers in some respects, including saying that drivers cannot “engage in reckless behavior while driving” or “operate a vehicle that is unsafe to drive.” When pressed, Zimmer said that Lyft would “continue to assess” its policy regarding driver use of Level 2 autonomous assistants. “Obviously, driver and rider safety is our top priority. And so to your point, it’s something that will continue to be looked at.”

Lyft increases service fees for riders amid rising insurance costs • ZebethMedia

By zebethcontrolPosted on October 17, 2022Posted in Lyft, ridehail, TransportationNo Comments

Lyft is increasing the service fees its riders in the U.S. pay for each ride. The rise in cost, which will go directly to Lyft, aims to cover the higher costs of insurance, reports Reuters. Lyft’s service fees pay for overhead costs like driver insurance and security background checks. The company expected a rise in insurance costs to affect Q3 margins, according to Lyft’s Q2 earnings call, which is one of the reasons it lowered full year guidance. At the time, Lyft hinted at changing its pricing structure to accommodate — the company really needs to increase its per-rider revenue, which actually decreased from Q4 2021 to Q1 2022, and remained flat from Q1 to Q2 despite a slight rise in active riders. But will this service fee increase be enough to help Lyft inch closer to traditional profitability, or will it only help offset the costs of rising insurance? Or worse, will the slight price increases send would-be Lyft riders into Uber’s cushioned seats? Uber told ZebethMedia that it has not increased its service fees, and according to data from YipitData, Uber’s service fee has stayed at $2.87 since 2020. “Lyft is facing insurance inflation pressures and we’ve nominally increased service fees to help offset these costs,” according to a statement shared with Reuters by a Lyft spokesperson. The spokesperson said the increase averages less than $0.50 per trip nationally, but YipitData’s numbers showed the service fee went up by an average of about $0.60, or an 18% increase, which implies a 3% increase in the cost of an average ride. The data also showed Lyft increased its service fee for riders in almost all 150 U.S. markets, except New York, in the first week of October. In San Francisco, Lyft’s service fee on a standard ride increased from $3.00 in January to $3.60 this week, according to data from web archiver Wayback Machine. For Lyft XL and Lux, the service fee increased from $2.75 to $3.35, and for Lux Black and Lux Black XL, it went from $2.05 to $2.65. In March, Lyft added a $0.55 surcharge that went directly to drivers to help cover the rising cost of fuel, which has since been dropped. Uber issued a similar surcharge at the time. While it shouldn’t affect riders too much, the current price hike might mean that Lyft takes a larger share of each fare in proportion to Lyft drivers, YipitData analysts said, according to Reuters. Lyft did not respond to ZebethMedia in time to comment.

Federal gig worker proposal tanks Uber, Lyft and DoorDash stocks • ZebethMedia

By zebethcontrolPosted on October 11, 2022Posted in Apps, DoorDash, Lyft, Transportation, UberNo Comments

The stock prices of Uber, Lyft and DoorDash slid on Tuesday after the Department of Labor announced proposed changes to how workers should be classified. The prospective guidance is intended to “combat employee misclassification,” the federal agency said. Investors swiftly drove Uber’s share price down by more than 10% to $24.61, while Lyft’s tanked more than 12% to $11.22 and DoorDash’s slid more than 5% to $44.98 at the time of writing. The change could make it easier for contractors to gain full employment status if they are “economically dependent” on the company, although the scope of the rule would be limited to areas such as minimum wage enforcement. The proposal is subject to a public comment period, which runs from from October 13 to November 28. Uber, Lyft and DoorDash depend extensively upon so-called gig workers, who haul people and meals around on their behalf but do not receive many hard-won benefits of employment — such as employer contributions towards their Social Security and Medicare taxes. Despite pressure from labor organizers and some lawmakers, tech firms have fought to continue classifying their workers as independent contractors, arguing the status benefits their businesses, other local businesses and workers themselves. Efforts to alter gig worker classification in the U.S. include a recently rejected ballot measure in Massachusetts, which could have explicitly defined such workers as independent contractors. In California, an effort to secure benefits for gig workers — AB-5 — passed in 2019. A year later, app-based gig workers in California were excluded from the law via Proposition 22, which itself was deemed unconstitutional in the state in 2021. However, app-based gig companies have appealed that ruling and continue to operate in California under the guidance of Prop 22. (Every day is a winding road.) In a statement, Lyft claimed the proposal had “no immediate or direct impact on the Lyft business at this time.” The firm then reiterated its argument that classifying gig workers as employees would deny them independence and flexibility. DoorDash published a similar statement on its blog earlier today. Uber also cited flexibility in an email to ZebethMedia, saying the “proposed rule takes a measured approach, essentially returning us to the Obama era, during which our industry grew exponentially.” In stark contrast, groups such as Gig Workers Rising have long argued that independent classification denies gig workers “basic worker protections and rights,” such as unionization, living wages and benefits such as paid time off. While ride-hail and meal-delivery companies argue that changes to how workers are classified would threaten their business models, these firms aren’t profitable. Uber, Lyft and DoorDash have posted hefty net losses under the status quo.