Verizon Wireless may have just helped Lyft continue to be competitive with rival Uber in getting more passengers to use its mobile app. Lyft has forged a partnership with the Big Red, which as the largest wireless carrier in the United States, should help Lyft reach more potential users.
Starting Thursday, May 7th, the Lyft mobile app, which allows users to book transport services from private car owners, will come pre-installed on all Android mobile devices offered by Verizon Wireless. On top of that, the carrier will be offering Lyft drivers various incentives, including discounts on their monthly phone bills for as high as 15 percent.
Although no further details have been made public yet regarding the specifics of the Verizon-Lyft partnership, both parties have expressed excitement in working closely in integrating their products and services.
Just like the wireless industry, the ride sharing business has grown very competitive lately. As more consumers become more appreciative of the benefits of ride sharing, the more providers of this service are now competing to get passengers' attention. As for wireless carriers, partnering with ride sharing providers could also boost wireless service usage.
In Lyft's case, having Verizon Wireless pre-load its mobile app to the carrier's Android devices should allow it to have access to a broader audience. Also, it gives them some leverage in battling Uber for usage. Lyft has certainly scored some success in that area, but at some cost. Based on leaked internal Lyft documents, the privately held company generated a revenue of $130 million in 2014, but it spent over one half of that amount promoting its business. Interestingly, Lyft's investors do not appear to mind the fact that the company is spending so much money. The evidence: during a funding round last March, Lyft managed to receive a cash infusion in the amount of $530 million.
However, in spite of its success, Lyft still lags behind Uber, at least in terms of presence. Uber has presence in about 250 cities around the world, while Lyft can only claim over 60 cities all within the US. It goes without saying that its partnership with Verizon Wireless really does play a crucial part in allowing Lyft to keep up with Uber.
For Verizon, by luring Lyft drivers to its fold, it could add more subscribers to its current customer base, which is unfortunately shrinking due to aggressive efforts by Sprint and T-Mobile to grab away its existing customers (the Big Red lost 138,000 mobile customers in the first quarter of this year).
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