SAN FRANCISCO—San Francisco based ride-share company Lyft is considering adding a new food delivery service to their operations. On November 10 John Zimmer, Lyft’s co-founder, announced in a public earnings call that the company has been consulting restaurants to see if they can address some of their complaints with delivery apps. Some problems that restaurants cited include high commission rates, lots of service fees, and a problem with small businesses paying lots of their revenue to large companies such as Uber. Officials from Lyft explained that the pandemic has created a need to support local restaurant businesses, which Lyft believes they can help with.
“And so what we’re hearing from these restaurants and retailers, especially during the pandemic is they want to partner not [with] someone that’s going to be, you know, taking 20% to 30% but they want to just have the delivery capabilities, which obviously the 1 million drivers we have on the platform [can] provide,” said John Zimmer during the call.
Lyft already has a semi-food delivery service; over the summer they partnered with Grubhub, which offers free delivery service from local restaurants to every Lyft Pink member. However, the company is looking to acquire an independent delivery service of their own, similar to Uber Eat’s delivery service. However, unlike Uber Eats, Lyft’s potential new service will not include service fees. The company plans to just allow restaurants to use their drivers for delivery, without reaping any fees from restaurants as payment.
“So not interested in a consumer platform, interested in kind of more of a B2B organization level approach, which we think is differentiated, and where we can say hey, we’re not going to step between you and your customer unlike other platforms,” Zimmer added.
Lyft has reported that their overall revenue during 2020 has increased compared to last year, up by 47% on a quarterly basis. Ride-share rides also increased by 130% compared to a low in April. The company credits their increased revenue to more people using ride-sharing to go about daily activities during the pandemic.
