Seeking to bolster its community-friendly image while penetrating more deeply into city transportation systems, the ride-sharing giant Lyft (NASDAQ: LYFT) announced a new initiative that will dedicate $50 million to transportation programs around the country. The announcement coincided with Lyft’s public offering; its stock is now trading 4.2 percent below its initial price.
Through the so-called “Lyft City Works” program, Lyft each year “will invest $50 million or 1 percent of profits – whichever is larger – to support locally driven transportation and other initiatives to improve people’s lives in every city where we operate,” the company announced on its blog.
The first beneficiary is the city of Los Angeles, where Lyft will invest $5 million in subsidized rides for low-income residents as well as employees of social service nonprofits, including the YWCA of Greater Los Angeles, PATH and The People Concern. Lyft will also boost electric vehicle charging infrastructure and expand scooter and bike service to low-income neighborhoods.
These programs will help the ride-hailing company reel in more bike, scooter and ride-hailing customers, as well as compete with arch-nemesis Uber as that company also ramps up investments in tech transport services and prepares for its own public offering.
It was unclear at press time if the City Works program will dedicate resources to boosting public transit ridership. Ride-hailing companies have come under fierce attack for increasing traffic congestion and air pollution, and siphoning riders from mass transit systems. The cities of New York and Chicago, along with Massachusetts have implemented fees and taxes or raised existing ones on ride-sharing services to support transit systems.
Lyft did not immediately return requests for comment.
It’s been a busy week for Lyft, whose shares today fell for the second straight day, from $72 to $67.90. On the same day Lyft celebrated its public offering in Los Angeles, Uber and Lyft drivers in the Southern California city were on strike protesting low wages and poor working conditions.
