Business First Look

Lyft cuts staff: Does it have a new business strategy?

The country’s second largest ride-hailing company Lyft just dismissed or reassigned 17 employees.

A smartphone displays the Lyft app. The ride-hailing company dismissed or reassigned more than a dozen employees on Friday.
Paul Sancya/AP/File
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The country’s second largest ride-hailing company Lyft dismissed or reassigned 17 employees in its sales support and business operation.

Seeking to carve a niche in a market dominated by Uber, Lyft said it will continue providing a complement or replacement for public transit in some cities and expanding its scheduling program “concierge,” which allows businesses to pre-arrange travel for their customers.

“We are optimizing our team to better match what we need in the market,” David Baga, Lyft’s chief business officer, told Bloomberg.

The ride-hailing company has also seen some success. Last August, it successfully struck its first deal with the local government in Centennial, Colo., to offer rides subsidized by the city to a light rail station. Boston followed, as the city’s transit agency Massachusetts Bay Transportation Authority partnered with Lyft to provide an on-demand transit alternative for riders with disabilities, The Christian Science Monitor reported in September.

“This is an area that has the potential to be a very significant part of Lyft’s work in the future,” Emily Castor, director of transportation policy at Lyft, told Bloomberg in August.

According to Baga, these business initiatives are growing, with a 50 percent increase in quarterly revenue from business-related projects over the past three periods.

“We’re making tremendous progress in the businesses that have the highest propensity to travel,” Baga told Bloomberg. “We’re continuing to grow and are one of the fastest-growing initiatives.”

The startup received a $500 million investment from General Motors last January, betting its future on developing a network of self-driving cars.

The news comes a day after a report, compiled from business travel expenses reported on software provider Certify, shows that Uber is winning over business travelers, accounting for 52 percent of the ground transport market. While doubling its share from 2015, Lyft claims a meager 4.2 percent.

Mr. Baga’s team, which includes sales, has been responsible for Lyft’s recent push for business travels. Despite its initial branding as a personal peer-to-peer car booking service, with slogan “Your friend with a car,” Lyft last year landed some major corporate clients such as Apple and Airbnb, who prefer to use Lyft for its business travels.

Despite Lyft’s hope to differentiate itself from Uber through branding itself as the friendlier service, experts say Lyft’s sales efforts seems scanty considering Uber’s advantages in the field. Uber says more than 50,000 companies use its Uber Enterprise service and expects the number to at least double by mid-year.

"This is the one market which I think is better aligned with Uber's positioning than Lyft in part because Uber has the broader range of options and a larger fraction of the high-end vehicles," Arun Sundararajan, a professor at New York University's Stern School of Business, told Bloomberg on Thursday.

But no matter which approach Lyft takes, it all seems to align with the firm’s goal set when it was founded.

“I wanted to absorb all the alternatives to car ownership,” John Zimmer, the startup’s founder and president, wrote in blog post in September. “My hope was to come up with a transportation solution that didn’t require everybody to own a car like L.A. does.”