On the Lyft (NASDAQ: LYFT) earnings call Feb. 9, co-founder and CEO Logan Green spoke a bit about the future of transportation, a future he sees Lyft being perfectly situated to thrive in. He was talking about autonomous vehicles (AV) and business-to-business (B2B) deliveries.
“We believe the future of transportation is as-a-service, and we are the only company in North America that has a seamless multimodal transportation platform that can replace car ownership,” he said. “We expect autonomous vehicles to accelerate this transition. They will transform the ridesharing industry and their business.”
Green went on to say that he believed AVs would first be deployed on rideshare networks.
“Given the expected vehicle cost, one key issue will be getting first-wave vehicles to break even, which will depend on utilization,” he said. “This will be tricky because these vehicles will only be able to serve a subset of trips due to likely domain and weather restrictions. It’ll take time for AV technology to advance to the point where AVs are able to accommodate every ride under every condition.”
Lyft has already conducted 100,000 paid AV rides since 2018, Green said. The company has been working with Motional, an Aptiv-Hyundai joint venture, on the AV project, and it expects to deploy fully autonomous Motional vehicles in several cities by 2023.
“We’ve spent nine years building a business that is uniquely capable of supporting and scaling AVs,” Green said. “Our level 5 data-driven autonomy program taps into our greatest asset — our rideshare network — to help tackle some of the hardest problems in self-driving. And our open platform partners will be able to leverage our rideshare technology stack, including our dispatching and routing algorithms, our shared rides platform and our pricing capabilities.”
Lyft co-founder and President John Zimmer emphasized that Lyft has followed three key elements in developing the AV program: human drivers, an efficiency engine powered by technology and fleet management capabilities.
“Each of these elements creates a competitive moat that reflects the fundamental value of all the work we do across our business,” Zimmer said.
“We believe the future of transportation is as-a-service, and we are the only company in North America that has a seamless multimodal transportation platform that can replace car ownership. We expect autonomous vehicles to accelerate this transition. They will transform the ridesharing industry and their business.”Logan Green, Lyft CEO
Zimmer highlighted the already robust fleet management platform Lyft employs that will enhance the ability to schedule and route AVs.
“Our fleet management offerings can deliver strong cash flows in advance of AVs. And with AVs, our competitive advantages will become even more clear. For partners, we expect our hybrid AV network will support the highest revenue per mile, while our fleet operations will drive the lowest cost per mile,” Zimmer said.
Green said the AV program is being tested in multiple cities and the knowledge gained from these pilots will guide the eventual rollout of the program.
“We’re not saying that we expect multiple cities to launch on the same day, but we think we’ll get together with Motional [and] have the capability to launch multiple cities in 2023,” Green said. “So we’re quite excited about that. Again, this is going to start very small. It’s going to be about the learnings that we’re doing together. And the technology will have to prove itself and win the trust of consumers and regulators, of course, before we’re able to scale it up.”
One other area the executives touched on, but refused to go into great detail, is Lyft’s plans to expand into B2B delivery for retailers.
“We’re quite excited about the inbound interest we’re getting, and on the ‘tiger’ team we’ve put together on delivery, we’re excited about their performance,” Zimmer said. “We have a handful of pilot markets live [but] we’re not planning to disclose specifics.”
What Zimmer did say was that businesses are interested in “broadly scaled logistics capability that doesn’t compete with them for the direct-to-consumer relationship.”
“I think what COVID taught everyone is that the world is moving, obviously, even faster to e-commerce and local delivery,” Zimmer added. “Many of these retailers didn’t have time to set up their own systems and form these type of partnerships like the ones that we’re forming with them and instead had to jump on these third-party marketplaces.”
He noted that more information would be forthcoming midyear.