John Zimmer, the co-founder of Lyft, has a degree in hotel administration from Cornell University but he soon parlayed it into a different industry – transportation. Along with Logan Green, Zimmer launched Lyft in 2012 as a Zimride service; Zimride is a ridesharing company established in 2007 by the duo.
Lyft, a privately-held American transportation network company based in San Francisco, uses a mobile phone application that facilitates peer-to-peer ridesharing among app users. Basically, passengers connect with drivers who have a car and share rides, with both drivers and passengers rating each other after each ride. The five-star rating scale is used in establishing the reputations of both parties within the ridesharing network.
Today, Lyft has operations in approximately 65 cities across the United States including San Francisco, New York City and Los Angeles. The company also plans to expand its operations to the international stage.
Lyft has so far been successful in its funding efforts. In May 2013, it gained $60 million in Series C venture funding, as led by Andreessen Horowitz with other investors including Mayfield Fund, Founders Fund, Floodgate, and K9 Ventures. In April 2014, it gained another $250 million Series D financing from Coatue, Alibaba, and Andreessen Horowitz. In 2015, it completed another round of financing – $530 million led by Rakuten Inc in March 2015 and $100 million led by Carl Ichan in May 2015.
The company is now valued at $2.5 billion.
In New York City, Lyft has a different business model due to the regulatory requirements. Lyft drivers in the Big Apple should be registered with the Taxi and Limousine Commission (TLC) while their vehicles are decorated with smaller pink mustache mounted on their dashboards.
All drivers in all areas are required to undergo a strict screening process including background checks, in-person interviews, and drug and alcohol testing. Each driver also has a commercial liability insurance policy although drivers with low ratings are dropped from the network.