Lyft, car2go Head Towards The Same Future For Ridesharing

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【Summary】Lyft’s Chief Business Officer and car2go’s President and CEO provide insight into the future of the companies at CES.

Original   Vineeth Joel Patel  ·  Jan 04, 2017 12:25 PM PT

This year's Consumer Electronics Show (CES) promises to hit three aspects of the automotive industry that have recently exploded – autonomous vehicles, electrification and ridesharing. At a conference labeled "Exploring Evolving Mobility Choices," Paul DeLong, President and CEO of car2go, and David Baga, Chief Business Officer of Lyft, provided some insight into what mobility services will look like in the near future. 

As DeLong put it, ridesharing and mobility services have rapidly flourished in the past few years at an unbelievable pace. Car2go, which is a car-sharing service that operates in approximately nine different locations in the United States, has seen a resurgence of people moving back to urban environments. The move, as DeLong points out, is due to increasing travel times to jobs that are predominantly located in major cities. 

To help create a ride-sharing service that can cut the amount of time individuals spend in a car driving from point a to b, which DeLong claims should be simpler, Daimler started car2go back in 2008. DeLong claims the "m" in Daimler stands for "mobility," which the automaker will display at its booth at the show. Working closely with Daimler, car2go looks to transform mobility into something entirely different. 

Daimler, according to DeLong, manufacturers roughly 400,000 vehicles in North America, and nearly 800,000 people drive one of the automaker's vehicles. With numbers like that, one would assume that autonomous vehicles and ride-sharing companies like car2go would hurt the company's sales figures. And when asked if these two concepts would take cars off the road, DeLong claimed that it would, but getting from one point to another needs to be simplified. 

In keeping with the idea of simplifying things, Daimler announced a delivery service that would include its autonomous vehicles and DHL that could be incorporated into its car2go ride-sharing service. DeLong also hinted towards another partnership with UPS, as well, that would allow vehicles to be used for shipping purposes. 

With the roles of cars continuing to change, DeLong was questioned on whether car-sharing services like car2go are being used by customers as a way to completely replace the need for a vehicle or to supplement car ownership. According to DeLong, individuals in urban areas are using ride-sharing services, like car2go, to completely replace the need to own a vehicle. This, as DeLong points out, is due to parking restrictions in highly-populated cities and the price of living. As more ride-sharing services emerge, people in urban areas have more options, giving them the ability to get around without having to own a vehicle. 

On the other hand, drivers in suburban areas are required to own a vehicle, since public transport still has a long way to go. Individuals living in areas that are outside of cities still require a vehicle, but are using ride-sharing purposes as methods of getting around owning a second or third vehicle. 

As DeLong revealed, ride-sharing services are focusing on ways to provide individuals who don't want the hassle of car ownership. Ride-sharing services, as hinted at by DeLong, will thrive in urban areas as more individuals move to cities. 

David Baga from Lyft addressed the audience after DeLong. Baga was questioned about Lyft's partnership with General Motors and how it would change with the rise of autonomous vehicles. 

Early last year, General Motors and Lyft announced a partnership to work on autonomous vehicles. The initial plan saw General Motors invest $500 million into the ride-sharing company with key elements including, a network of on-demand self-driving cars, General Motors becoming a preferred provider of cars to Lyft drivers, Lyft drivers and users having access to General Motor's OnStar services, as well as joint mobility offerings. 

Since then, General Motors and Lyft have created an Express Drive program that allows Lyft drivers to rent vehicles from General Motors weekly instead of having to use their own car. 

In regard to how Lyft and General Motors' partnership will change with the increase in autonomous cars, Baga stated that the future for the two companies is clear and will be driverless, connected and electric. In other words, Lyft and General Motors aren't looking to transform the ride-sharing industry, but build upon it. 

Baga believes that younger individuals, pointing towards his daughters, won't have a driver's license or a vehicle when they become of age to drive. "The worst asset utilization of any class is the automobile," states Baga. On average, an American household spends approximately $9,000 a year on an automobile, which as Baga claims, sits idly by 23 hours of the day.  

Together, Lyft and General Motors are betting on autonomous vehicles. "In the next five years, half of the rides we provide to our customer base will be deliver autonomously," claims Baga. That number, unbelievably, will increase as time goes on. By 10 years, Baga believes that every ride Lyft gives will done in a self-driving vehicle. 

Clearly, the partnership between Lyft and General Motors hinges heavily on self-driving vehicles in the near future. 

When asked about which company, General Motors or Lyft, would own the fleet of self-driving, connected and electric vehicles, Baga quickly evaded the answer by claiming that was up to both finance departments. As Baga put it, the consumer isn't really worried about that. What the consumer is concerned about, according to Baga, is having a flexible plan that allows them to get the most out of the ride-sharing service. 

Lyft will expand well beyond offering users with a way to get from point a to b with a driver, as the ride-sharing company hopes to evolve to being able to offer services in a manner that's similar to a subscription service, similar to Netflix or Spotify. By utilizing a subscription-like service, Lyft will be able to offer flexible plans to users. Users will be able to select a vehicle based on their usage. Baga, for instance, explains how drivers can choose to have a plan that aids them in commuting to and from work or one that allows them to get a family car to take a long trip in. 

With the information from car2go and Lyft, it's clear to see that ride-sharing and mobility services are heading towards the same goal, autonomous vehicles that allow individuals to bypass owning a vehicle. 

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