Lyft Boosts Car-Share Locations by Two-Thirds to 60 U.S. Cities

Apr 24, 2014 12:00 pm ET

April 24 (Bloomberg) -- Lyft Inc., the car-sharing service that recently raised $250 million of financing, is expanding today into 24 new cities across the U.S., ramping up competition with hometown rival Uber Technologies Inc.

San Francisco-based Lyft will now serve a total of 60 cities, including new locations such as Kansas City, Missouri; Newark, New Jersey; and Albuquerque, New Mexico, where the service will be free for the first two weeks, co-founder and president, John Zimmer said in an interview.

The company will also use this month’s round of financing, led by Alibaba Group Holding Ltd., to expand internationally, Zimmer said, declining to provide further details. Rival Uber said yesterday it’s now operating in a total of 100 cities worldwide, including Beijing. In the U.S., its service is available in 48 cities.

Lyft started its service almost two years ago, recruiting drivers willing to share their commutes for a price volunteered by users. The company, known for its cars adorned with big, pink mustaches, now charges a price per mile and per minute, and as part of a growth push is adding a 10 percent discount to a 20 percent price cut started two weeks ago, Zimmer said.

“The promotion led to a double-digit percentage growth” of the company’s user base, he said.

The deal will run through June 21 and may be extended, said Zimmer. During the promotion, Lyft has waived the 20 percent commission it normally charges drivers.

Uber has a high-end service for limousines and luxury cars as well as lower-priced options for cars driven by ordinary people. In August it raised $258 million, giving it a valuation of about $3.5 billion.

Urban Dwellers

Lyft’s service is typically 10 percent to 20 percent cheaper than the basic ride offered by Uber, according to Zimmer.

Nairi Hourdajian, a spokeswoman for Uber, declined to comment on Lyft’s pricing.

“The question of ‘can Uber be everywhere?’ has been answered and now we’re focused on expanding within those 100 cities and to the next 100,” she said in an e-mailed statement.

Scrutiny of car booking services has increased as they have become popular with urban dwellers. The two rivals face regulatory and legal hurdles in cities including Seattle and Chicago, where existing regulations protect taxi drivers’ turf and Uber is also facing similar challenges overseas.