BUSINESS MODEL CANVAS

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Lyft, Inc. is an American company that develops, markets, and operates a mobile app, offering vehicles for hire, motorized scooters, a bicycle-sharing system,
rental cars, and food delivery. It is based in San Francisco, California and operates in 644 cities in the United States and 12 cities in Canada.

Lyft was launched in the summer of 2012 by computer programmers Logan Green and John Zimmer as a service of Zimride, a long-distance
intercity carpooling company they founded in 2007.

Punch line “Affordable transportation solutions, effortless payments, and getting all the right people to all the right places. So you can get work done.”

EXECUTIVE LEADERSHIP
Prashant K. Aggarwal
Independent Chairman of the board

John Patrick Zimmer

President, Vice Chairman of the Board, Co-Founder

Logan D. Green
Chief Executive Officer, Co-Founder, Principal Financial Officer, Director

Lindsay Llewellyn
General Counsel, Company Secretary

John David Risher

Director

Lyft Employees: 5,500

Total Revenue: $ 2,364.68 (Millions, Year ending 31st Dec 2020) (https://www.reuters.com/companies/LYFT.OQ/financials/income-statement-annual)

Lyft went public at a $24 billion valuation

Funding received: $4.9 B (https://www.crunchbase.com/organization/lyft)

Key features about Lyft –

1. Lyft matches customers with nearest drivers to avoid long waiting time and provides a live tracking system for the driver to easily locate the pickup
location.
2. Its business model has a rating system for both the drivers and passengers.
3. It offers free rides and rides at discounted rates on certain occasions and usually the prices are often lesser than normal taxi fares.
4. Drivers are taken care of and have flexible working schedules where they can choose their desired timings and are entitled to 20% share of the total ride
costs.
5. Lyft also has a dynamic pricing model called ‘Heat Maps’ through which it can set flexible prices for its services based on the market demand at that
particular time.
6. Those who are passionate about driving can pursue their hobby, earn money and also expand their network.

Business model

1. Lyft’s key partners- these include drivers with their own cars, company and independent investors, insurance companies, payment and map providers.
2. Key activities- Lyft has an efficient product management system. It provides timely customer support and manages driver payouts. It is also involved in
hiring drivers, background checks and enhancing its marketing strategies.
3. Value propositions for customers and drivers- it tries to ensure minimum waiting time, lesser taxi fares and tracking maps on cabs. It also promotes
cashless and hassle-free payment. It provides additional income to its drivers with flexible working hours and easy payments.
4. Unique cost structure- it gives salary to permanent employees and payouts to drivers. It covers insurance costs and has developed an advanced
technological infrastructure.
5. Revenue streams- it charges customers on a per mile basis and provides 3 taxi options of Lyft, Lyft line and Lyft plus.
Lyft revenue model

Lyft is a car aggregator that matches customers with the nearest available driver. The transactions between driver and customers are handled by their app and
20% of the revenue from each ride goes to the company while 80% is retained by the driver.

1. Lyft heat maps- it is a location and demand specific feature where prices change based on these two factors
2. Lyft car ride- It includes 5-seater car cabs
3. Lyft plus- it includes 7-seater cabs
4. Lyft line- it is a car sharing platform when a passenger does not want to hire an independent taxi and can share a ride with someone.

Key Customers:
The Lyft business model operates around two major sections of customers – the users and the drivers. Lyft users are people who don’t own a car, don’t like to
drive, or want a cost-effective ride at their doorstep. The driver section of Lyft customers includes people who own a car and want to earn some money via it.

Key Partners:
Partners in Lyft business model include people who make Lyft operations easier and smooth. Major partners in Lyft business model are –

1. Drivers with their cars.

2. Payment processors facilitate receiving payments from the customers and making payout to the drivers.
3. Map API providers help in route optimization for drivers and ride tracking for users.
4. Insurance companies share the financial load of the taxi dispatch company by insuring rides.
5. Investors

Primary Expenses:
The primary expenses of Lyft business model are –

1. Technological Infrastructure costs involve expenses incurred on maintaining the taxi dispatching app and website. These costs also include any expenses
related to research and development.
 2. Second major expense in Lyft business model cost structure is the salaries paid to permanent employees such as operations team and customer support
team.
3. The payout to drivers is also an expense as it is made out of the earnings of the company.
4. Insurance costs are the next key expense for the ride hailing company as it is required to provide basic insurance to the drivers as per local laws.
5. Last on the expenses list is marketing cost which includes cost incurred on advertising, rider incentives, compensation costs, driver incentives, etc.

Customer Segment

End-Users

1. Users who don’t have a vehicle to travel

2. Users are people who do not want to drive themselves and prefer to use a cab/taxi
3. People who like to make a new friend while travelling
4. Those who want a cost-efficient ride from their doorstep

Drivers

1. People who own a car and want to earn money

2. People who love to drive
3. Those who like to make new friends and not be treated as cab drivers.

Customer Relationships

1. Social Media - Using social media to reach out to potential users.

2. Customer support – providing exceptional customer support
3. Reviews, ratings and using feedbacks for ride experience.

Channels

1. Website – lyft.com
2. Android mobile App
3. iOS mobile App
4. SMS – discount codes, coupons
Key Activities

1. Product development and management – One of the key activities is to constantly develop the product and the app experience for the users.
2. Connecting riders with drivers – This allows the riders to make a booking via the app and connect with the drivers
3. Marketing & customer acquisition
4. Hiring drivers and backgrounds checks – Background checks are made on the drivers as customer needs to feel safe while going on a ride.
5. Managing driver payouts
6. Customer support

Key Resources

1. Technology Platform
2. Skilled driver

Cost Structure

1. Technological infrastructure
2. Salaries for permanent employees
3. Payouts to drivers – 20% is commissioned to Lyft, rest 80% is for the drivers.
4. Insurance costs
5. Marketing expenses

Revenue Streams

1. Car rides based on per km/basis

2. Different car options – Lyft, Lyft Plus, Lyft Line
3. Heat Maps
4. Improve rider experience by adding personal items to improve comfort level of the customer. E.g., Water, snacks, charging cables and hand sanitizer
Key Partners

1. Drivers with their cars

2. Payment processors
3. Map API Providers such as Google Maps, Apple Maps
4. Insurance companies’
5. Investors

Customer Profile

Customer Jobs

1. Travel with privacy

2. Not worry about driving under influence
3. Reduce anxiety and see where driver is
4. Pickup friends
5. Not to worry about parking

Customer Gains

1. Reliable
2. Good alternative when weather is bad
3. Easy to get around unfamiliar places
4. Time to be productive
5. More privacy than public transport

Customer Pains

1. Difficult to change pick up point once en-route

2. Driver unable to find pickup point
3. Surge pricing
4. GPS taking a slower route than usual
5. Arrival time may be different to the time on the app
Value Proposition Canvas
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Benefits the Taxi- share app brings in -

1. No concern about commuting any time of the hours

2. Expectations of arrival time are better managed
3. More relaxed as the route and direction is not to be directed
4. Potentially reduces the number of cars on the road

Value Proposition: The success of every service is dependent upon the value it adds to its stakeholders including users and drivers, in case of a taxi dispatch
company like Lyft. Lyft offers a solution to the commute problem faced by people in their everyday life and while doing so it creates value proposition for both
riders and drivers.

Value Creation - Lyft Customers-

1. Lyft offers a feeling of safety while booking a ride to its users.

2. Lyft adds financial value to users booking a ride with Lyft as it offers lower ride fare as compared to other taxi dispatching services.
3. Lyft offers multiple ride options to suit the diverse needs of the users. Users can book from options such as –
4. Lyft Standard, Shared, and Shared Saver when looking for affordable ride options.
5. Lyft Lux and Lux Black for luxury rides.
6. Lux XL and Lux Black XL when booking a ride for larger number of riders.
7. Lyft users enjoy different perks such as referral points, free rides, free credits, etc.
8. Cashless rides as users can make payments via Lyft app using multiple payment gateways.
Value Creation - Lyft Drivers-

1. Lyft creates value for its drivers to earn their trust and motivate them to drive for the company.
2. Drivers can work at their convenience as Lyft has a flexible shift model.
3. Lyft has a fast payout system so drivers receive payments immediately.
4. Drivers have an opportunity to earn from different sources including trip charges and tips.
5. Lyft suggests high booking areas to drivers to help them earn more by accepting rides in such areas.
6. The insurance partners of Lyft offer different coverage options to drivers such as liability, injuries and damages to the vehicle.

Value Proposition

Gain Creators
1. Reducing traffic on the road.
2. More pleasant sharing ride experience
3. Can be more productive
4. Save money

Pain Relievers
1. Reduce frustration with other riders
2. Fixed cost at time of booking, no surge pricing
3. Save money while being efficient
4. Takes away stress of booking a ride
5. Takes away uncertainty

Products and Services

1. Book shared ride up to 24h in advance. The idea for this feature is that users would book 24-hours in advance and receive driver and route confirmation
12-hours before their departure time. Lyft would have time to plan the most efficient route whilst adding multiple stops, and the app would not allow
any other users to join the ride after the 24-hour cut-off. A user would be able to cancel their booking, but they would be charged a cancelation fee

2. Rate experience with other riders Passengers could then rate co-riders, and give feedback on things such as being late for pick-up, being inconsiderate in
the car, with the premise being that if a person receives 5 sad face reviews over a 2-week period, they would be temporarily banned from booking
shared services through Lyft (they could still book private rides).

3. Guarantee to get you to destination on time (unless unforeseen circumstances)

As of 2021, Lyft has experienced immense growth in the average number of users and associated drivers which have translated into increase in revenue.

Key Partners
Drivers with their own cars
Insurance Companies
MAP API provider
Payment gateways
Payment processors
Investors
Cost Structure
Technology Infrastructure
Salaries
Pay outs to drivers
Expenditure in Marketing
Insurance costs
BUSINESS MODEL CANVAS
Key Activities Value Propositions Customer Relationships Customer Segments
Product development & Customers: Social Media Users:
management Minimum waiting time Review rating Users who do not own a vehicle
Marketing activities Cashless ride Feedbacks Users who do not want to drive
Hiring drivers Competitive pricing Customer Support Users who use alternate mode of
Background checking of drivers Tracking and ETA both arrival and public transport
Driver pay-outs destination. They are looking for cost efficient
Customer Support ride from doorstep
Drivers:
Addition Income
Flexible working hours
Ease in payment receivables Drivers:
Friendly atmosphere People who own vehicle and
intend to use it for additional
income
Key Resources Channels People who are driving enthusiast
People who are looking for
Technology Platform Website
friendly atmosphere while at work
Skilled Drivers Mobile app for iOS
Mobile app for Android
Revenue Streams
Car rides per Km
Car options – like Lyft, Lyft Plus, Lyft Lux
Surge pricing
 Value Proposition Canvas

Value Proposition Customer Profile

Customer Gains

1. Reliable
Gain Creators
2. An alternate to
1. Hassle free to and fro other mode of
2. Friendly atmosphere Transport
and probability of higher 3. Easy to go
satisfaction around to
3. Save money – Cost unfamiliar places
Products & Services
effective
1. Book shared ride up Customer Jobs
to 24hr in advance.
1. Travel with
2. Rate experience with Privacy
other riders. 2. Hassle free
3. Guarantee to get
driving and
you to destination on
time parking
Customer Pains 3. Share rides
with friends
Pain Relievers 1. Difficult to
change route
1. Fixed cost at booking when started
2. Efficient and cost- 2. Surge Pricing
effective engagement 3. Dependant on
3. Removes un certainty mobile
connectivity
 VALUE PROPOSITION CANVAS
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