The partnership Lyft and General Motors sprouted first thing this year is bearing fruit.
In a release Monday, Lyft and GM announced the expansion of their joint vehicle-rental program, which allows Lyft drivers to rent a nearly-new GM vehicle for the short- (or, occasionally, long-) term.
The renting program, called Express Drive, is already operating in Baltimore, Boston, Chicago, and Washington, D.C. Now, it is expanding over the next couple of weeks to San Francisco--Lyft's hometown--and by fall will also be an option for drivers in Denver and Los Angeles. Drivers in California will have access to GM's all-electric vehicles, in addition to standard cars such as Buick Regal or Chevrolet Impala.
The Express Drive program, which we'll see expand rapidly around the country through 2017, takes aim at recruiting and retaining drivers for Lyft, Uber's biggest rival. Currently, with its $51 billion valuation, Uber reigns supreme as the most valuable startup in the world. But Lyft's reputation as a friendlier company goes a long way toward wooing drivers--and this GM partnership would only seem to help.
"For Lyft, it's putting a great new driver on the road, and rewarding them to drive effectively full time," says David Rust, Lyft's director of operations strategy. "For GM it's a great thing, because they are able to monetize their vehicles, and get great brand exposure in the meantime."
Express Drive is an option especially geared at new drivers, because many potential drivers in the past may have been turned down by the company for not having a new-enough, or large enough vehicle (nope, two doors are not enough for a Lyft).
The program's success in its existing four cities is difficult to gauge, though it does seem reasonably popular with new drivers in particular. Thirty percent of new drivers who applied this year in Chicago have requested to rent a GM vehicle, according to Lyft. And when the program launched in Boston, with a "few hundred" new or almost-new GM cars, they were each spoken for within four days," according to Rust.
Lyft's Express Drive program offers GM cars to Lyft drivers for lease by the week--on a tiered basis. Drivers who take the most rides, more than 65 per week, don't need to pay for the car. Drivers who take more than 40 rides per week pay a weekly fee--say, $89 for a Chevolet Trax. And those who take the least number of rides--fewer than 40--pay the $89 per week plus mileage.
Drivers at all tiers must pay for mileage when using the car for personal use.
The GM partnership, which was announced in January, was stated to be primarily to "build a network of on-demand autonomous vehicles." This will obviously take more time. Immediately, though, the companies are focusing on expanding a national grid of rental hubs.
Uber, the dominant player in the ride-hailing space, also has a short-term rental program for drivers. It has come under scrutiny for operating squarely in the subprime auto lease space, and targeting individuals who have been rejected by other lenders. In other words, for many drivers, taking the loan via Uber through its Delaware-based subsidiary, Xchange Leasing, is their only option.
"You can buy the car for what they're charging you in weekly payments," Greg McBride, chief financial analyst at personal-finance website Bankrate.com, told Bloomberg.