Can Pink Mustaches Be a 100-Year Company?
A strange thing happened on American roadways over the past two years: Tens of thousands of skateboard-size stuffed mustaches made of pink faux fur have been strapped to automobile hoods. And there's a lot more fist-bumping between strangers, in cars.
This is the culture of Lyft, and, yes, it's whimsical. But it's a particular strain of deliberately engineered, almost emotionally mature, whimsy. It's a cultural compass that's helped the company expand from the San Francisco Bay Area to 58 cities total, and that's been the catalyst in recruiting tens of thousands of drivers to share their front seats of their personal vehicles with millions of passengers. It's a whimsy that, in part, attracted millions in venture funding, including one of the largest funding rounds of last year (and, well, in history).
Behind all this is John Zimmer, a former Lehman Brothers analyst who studied hospitality at Cornell, and Logan Green, a former transit-system manager with a business degree from the University of California, Santa Barbara. They say they knew that 80 percent of vehicle seats on U.S. roads are empty, and that this costs $80 billion a year in lost economic productivity. The pair got to work to find a solution.
"We thought this would be carpooling," Zimmer says about the service called Zimride, which they launched at 130 universities and corporations to match individuals who needed transportation to the same places. But it never caught on for a general audience. (Zimride still operates, although Green and Zimmer sold it to rental-car giant Enterprise Holdings last year.)
In early 2012, Green and Zimmer decided to reimagine their project as something that could hit those "aspirational" and "popular" notes that Zimride bombed. They pulled three people from the 25-person Zimride team to build an app to automate the ride-sharing-bulletin-board idea--something that would function like a cross between a taxi and getting into a friend's car. And safe. They acquired the name Lyft. "Everything was clicking," Zimmer says. "And then it just took off from there."
Over the past 22 months, the company has grown to 250 people spread across two San Francisco offices, and recently it raised a massive fourth round of funding--$250 million--bringing total backing to a whopping $333 million. Until very recently, that was more funding than that of Lyft's hulkish competitor, Uber, which this month took $1.2 billion in additional venture capital funding at a valuation of $18.2 billion.
There's no clear winner in the space; the $11 billion limousine and taxi industry is notoriously fragmented globally, and there is no dominant player in the U.S. market. Lyft's differentiating factor is certainly in part its inherent whimsy, which translates to customers culturally as accessibility and kindness--no small thing. It's also price: Payments work on what's billed as a "donation" system, which generally makes taking a Lyft cheaper than a cab. Riders can sit in drivers' front seats, making the transaction feel a little more voluntary--though both the driver and the passenger are rated by each other in the app, so paying less than the suggested donation isn't exactly a strong move.
Zimmer and Green hold fast to their high-minded ideal of reshaping urban transportation and making more than a small dent in its inefficiencies. They're also out to build a 100-year company. Zimmer says he doesn't know what that will look like in 50 years, but jokes that it'd be just fine with him if Lyft becomes a social network of self-driving cars--give or take the mustaches--as long as it doesn't lose its superfriendly vibe.
"Whenever someone is wanting to get from A to B, we want to be their best option for price, availability, friendliness, and experience," Zimmer says. "But we want to have an impact beyond A to B. The times in my life I've felt the most alive is when I'm having a connection with people. We need to hack cities in a way to bring back that community culture."
Investor Scott Weiss, a general partner at venture capital firm Andreessen Horowitz, says the company's strength in fostering its brand as insanely friendly while cost aware reminds him of iconic companies such as Target or Southwest Airlines. "It's the low-cost, high-experience: In a service business, it doesn't get any better than that."
CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer
Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.