The ride-sevice underdog hopes for competitive advantage against Uber in a deal with nation’s largest mobile phone carrier.
In its battle with Uber for passengers — and relevancy — Lyft has formed a national partnership with Verizon Wireless that the pair hope will steer more customers their way.
Beginning Thursday, Lyft’s app, which connects private-car drivers with passengers, will come preloaded on Verizon devices running Google’sAndroid operating system. Also, Verizon will offer Lyft drivers incentives to use it as a mobile carrier, including 15 percent discounts on their monthly wireless bills.
Without offering further details, the two companies also said they would “work closely on future creative campaigns and product integrations,” according to a statement by the San Francisco-based ride-hailing company.
“This partnership is a natural fit that will not only save customers time and money, but also enhance the Lyft ride experience for both passengers and drivers,” Russ Preite, a regional president at Verizon Wireless, said in a statement.
The partnership comes amid increasing competition in both the ride-sharing and mobile carrier businesses. And this deal could offer something to each of them.
Lyft is hoping that having its app preloaded on Android devices sold by Verizon Wireless — the nation’s largest mobile phone carrier — will translate into more riders using its service. But Verizon’s share of the mobile business has been shrinking as rivals T-Mobile and Sprint have aggressively lured away subscribers. Verizon lost 138,000 mobile customers between January and April of this year. By offering Lyft drivers who use its mobile service a discount, Verizon hopes to stem those losses.
So far, Lyft’s efforts to grow ridership amid an acrimonious battle with Uber have been successful but costly. Leaked internal Lyft documents show that the privately held company earned $130 million in revenue last year, but it spent more than half of that on marketing.
Still, investors don’t seem to be worried about the fact that Lyft is burning through cash. The company received a $530 million vote of confidence in March during a funding round led by Japanese online retailer Rakuten that valued Lyft at $2.5 billion.
But despite its increasing fortunes, Lyft is still the underdog, with a presence in more than 60 US cities compared with Uber’s roughly 250 cities worldwide. In December, Uber investors valued the company at $41 billion, dwarfing Lyft’s $2.5 billion.