2013-10-31

How One Young Car Sharing Entrepreneur Keeps Disrupting How We Get Around

Before he started pink-mustache-branded Lyft, John Zimmer had already co-founded Zimride. What's next in his quest to figure out how to make better use of our roads?

By now, pretty much everyone has heard of the ride-sharing service Lyft. You know, the one with the pink furry mustaches and the fist-bumping and the riding in the front seat and the tendency to get on the wrong side of local taxi and limo commissions. And, by now, pretty much everyone has formed their opinion. It’s likely you already fall somewhere on the spectrum from “Awesome, where do I click?” to “I’m not sure I want to get in the car with a stranger” to “Our Taxi and Limo commission is preparing to sue your mustache off.”

But whatever your response to his growing business model, Lyft co-founder and president John Zimmer says he hasn’t been surprised by it. “Ours is a new industry,” he says. “We need to communicate to regulators and the general public on how our system operates. I think there are a lot of things that we can do, and we should do, in terms of educating."

Education-wise, let’s start here: Lyft is actually the second ride-sharing service that Zimmer and his team have launched. The first, Zimride, was recently purchased by Enterprise Rent-A-Car, after the five-year-old platform connected drivers and passengers--primarily college students and corporate carpoolers--with over 100 million miles of shared road. Lyft was born out of a desire to reimagine Zimride for the iOS and Android-based smartphones of today. “Thirteen months ago, we had this brainstorm with a few of the designers at the company, and we said, let’s do an exercise where we think about what if we were starting all over today, with the same goals?” Originally called Zimride Instant, the new app took three weeks to develop, and has thus far gone on to connect users with over a million shared rides. Again, you’ve either used it, or you probably aren’t planning to.

So maybe we need to take it back a little farther, to where the aforementioned goals of Zimride started in the first place. For that, we need to hear where Zimmer comes from. A graduate of the Cornell School of Hotel Administration, Zimmer grew up in a Connecticut town where, he says, “people were focused on the corporate ladder, or success being defined by material objects.” As a sophomore in high school, he found a program that would let him spend the summer on the Pine Ridge Indian Reservation in South Dakota, working alongside residents on community projects. “By going to see this other culture, where they valued connection to the people and the nature around them, it really impacted me,” Zimmer says. “I felt more alive and more happy than I’d ever felt in my entire life. I came back, and I was like, ‘What’s wrong with everyone here? Why is everyone so focused on these material things? How come they don’t know about all these other people who are living in poverty?’ I think everyone, myself included prior to that trip, just didn’t have that perspective.”

The result of his new perspective was a new direction for his life. “I decided that whatever I did long term, I wanted to help build real community, genuine people-to-people connection, because I felt like we were all starved for it,” he says. “And if there was a way to use business, which I was really excited and passionate about, if there was a way to use entrepreneurship to help build community, save people money, and reduce our impact on the environment, that would be my dream.”

A class at Cornell called Green Cities not only underscored his beliefs, but set him on a direct path to Zimride. “I had the best professor of my life,” Zimmer says of that course. “His first lecture was the History of the World in 30 Minutes. It’s an incredible, eye-opening lecture. And like five or 10 lectures later, he gave a lecture on transportation, about the evolution from canals, to railroads, to highways. So I start thinking, ‘What’s next?’” To Zimmer, the professor’s zoomed-out slides of roads and rails looked like networks and systems, and when he applied that thinking to his hospitality classwork, he started thinking about occupancy, the main business metric of the hotel industry. “If you measured [transportation] occupancy in seats, 80% of seats are empty,” he says. “Obviously, any hotel would fail with those metrics. I saw a giant opportunity. The easy thing to think is, ‘Oh, what are we going to build? Flying cars? Hyperloops?’ All our cities have been designed around roads, and so we’re probably going to have them for a very long time. The next evolution of transportation, the next slide in my professor’s presentation, it’s not going to be physical infrastructure. I think we’re going to have to do a better job of creating information infrastructure.”

He met Zimride co-founder Logan Green through a mutual friend’s Facebook page, where they bonded over their shared goal of creating an information system for transportation that makes it more efficient, affordable, and social. (Ironically, the name “Zimride” didn’t come from Zimmer’s surname, but rather Green’s experiences in Zimbabwe.) By 2008, they’d moved to Palo Alto, and in 2012, they launched Lyft. Its explosive success led to the sale of Zimride to Enterprise this summer--“it was very tough to give up,” admits Zimmer--and now, it’s all pink mustaches, all the time. “We’re still working on the same thing we’ve always been working on,” Zimmer says. “The exciting thing is the way people are pulling on this product, wanting it in their cities. It’s something we’ve never seen before, the way it’s affecting people’s lives.”

If you’ve already summoned a Lyft driver via their app, maybe you’ve already had a life-changing experience, like the woman who was able to borrow a much-needed pair of shoes from her driver, or the disabled kid who scored front-row tickets to a Giants game thanks to a driver’s generosity. Maybe you’ve already formed a lasting relationship (a la the Zimride wedding) or simply had a delightful trip to wherever you were going. (“Delightful” is a word Zimmer uses a lot.)

But if you’re still a skeptic--and Zimmer does seem aware that there are several--let us try to answer some of your questions: Yes, Lyft has insurance. In fact, says Zimmer, they cover a million dollars per occurance, well above the $750,000 offered by most taxis. Lyft drivers undergo strict criminal background checks and DMV searches, and anything missed on those will likely get caught by the platform’s feedback system. No, the Lyft driver cannot see your cell phone number unless you disclose it, unlike many car services, which require that info for pickup. In response to this summer’s much-shared Valleywag article about a nasty stalking incident, Zimmer responds, “It’s easy to say, ‘Oh, here’s an incident of someone who gave someone their phone number and it didn’t play out well,’ and blame it on the technology. That could happen in a Starbucks. I think it’s fair to hold newer companies accountable. We should be held accountable. But I think it’s worth looking at the larger perspective of the whole thing, and not picking out one incident.”

Ultimately, the biggest question for Zimmer and Lyft is probably the simplest: Is this actually accomplishing something substantial? Are communities being formed? Is carbon being offset? Are drivers making any money? Are there enough pink mustaches to go around? The last problem is solved, at least--the original pink mustache supplier is now a member of Lyft’s creative team--but some of the other questions remain. Zimmer says they’re working with researchers to calculate the environmental impact, and he sure has plenty of anecdotal evidence about everyone from retired grandparents to unemployed actors using, and loving, the Lyft service. He also now has California legislators on his side, which is a big about-face for the Golden State. They’d initially sent Lyft a cease-and-desist letter, but last month, the Public Utilities Commission in San Francisco passed a unanimous decision to create a new category of business, the Transportation Network Company, that will allow services like Lyft (and competitors like Uber and Sidecar) to obtain licenses and be regulated for safety. It’s a huge step that just might mark the end of ride-sharing as a disruptive industry, and the beginning of the next phase of how we as humans get around.

“We sold Zimride so that we could focus on Lyft,” Zimmer says. “And Lyft today is really just the first page of a hundred, or the first chapter of 10 in what we’re hoping to build out in terms of this infrastructure. What we hope is that everyone who can get through the screening can be a Lyft driver, and they can light their seats up--even when those drivers are just on their way to work, or on their way to the grocery store. That’s gonna take a few years to build, but we’re on our way. I see this as a life project. We see this as big as canals, railroads, and highways. We want this to be a new form of transportation. I think we’ll be busy for a long time.”

[Image: Flickr user Spiros Vathis]

Add New Comment

4 Comments

  • laughtiger

    The errors here start with the title itself. Lyft was never a "car-sharing" service, nor did it even pretend to be. Zimride was an actual "ride-sharing" service, but Lyft is a de facto taxi service that has posed as "ridesharing" in the past for legal purposes. The State of California recently created a new category for these called "Transportation Network Carriers" and ruled that they are not "ridesharing."

    So this is not car-sharing.
    And not ride-sharing.
    Get it straight, please.

    Real ridesharing and car-sharing are worthwhile endeavors and should be supported. Confusing them with fake, for-profit taxi services like Lyft does a terrible disservice to the sharing movement.

  • armynod

    Lyft is a "recommended donation" based service. Not so much a for-profit taxi service as it is as mentioned, a Transportation Network Carrier. The app provides a link between passengers and drivers. Payment is optional. It's just like getting a ride from a friend. It's up to you to kick-in for gas, but if you don't it's no big deal. When was the last time a taxi let you skip the fare?

  • laughtiger

    The "recommended donation" thing was a scam that they will probably now drop because the PUC rejected the "ridesharing" claim. If you didn't pay your driver you would (quite reasonably) get kicked out of the system.

    As for riding with a friend, your friend doesn't charge you, doesn't (can't! wouldn't!) take a credit card, isn't waiting around to give you a ride at any time, and you don't "rate" each other after every interaction!

    And if you tried rating or paying your friends, they would probably be insulted!

    Ask the drivers themselves -- they are driving for the income. This is a taxi service. And if you stiff them you are a real Class A jerk.