Self driving cars increase the demand for drivers – Cofounder of Lyft

The online ridesharing companies partner with the automakers to build the next generation autonomous cars that will reduce the number of accidents caused by the drivers.


Self driving cars

John Zimmer and Logan Green on July 2012 launched the car hailing company in the United States with San Francisco as its headquarters. The transportation company uses the mobile and internet technology to connect the passengers who are in need of a ride with the drivers who are willing to trip with their own vehicle. The ridesharing company operates in around two hundred cities in the United States, including New York, San Francisco and Los Angeles offers short trips within the city. Both the drivers and riders rate each other on the basis of the 5 star rating so as build efficient driver- rider relationship and maintain the company’s reputation.

The payments are made using the cards, so the passengers have to include the debit card or PayPal account in their account for direct transaction. The company collects twenty to twenty five percent of the drivers as the business revenue. The transportation company altered its business model because of the regulatory issues faced by the company in New York and established on the East Coast.

Investors and Funds

The venture capital firm Andreessen Horowitz led the Series C funding in which the ridesharing company bagged sixty million dollars in May 2013. It also includes investors like Floodgate, Mayfield Fund, Founders Fund and K9 Ventures. The company sold Zimride (car hailing company that trips long distance rides between the cities) in July 2013 to Enterprise Holdings (parent company of Rent-A-Car) and planned to exclusively to work towards developing Lyft. The company completed two hundred and fifty million dollars Series D funding in April 2014 led by Coatue and other investments led by Andreessen Horowitz and thus the company raised an overall of $332.5 million.

In March 2015, the company received five hundred and thirty million dollar fund that was led by Rakuten, the Japanese online retailer. And in May the ridesharing company made one hundred and fifty million dollars led by Carl Ichan and on the whole the company raised one billion dollar, making the company’s valuation to be $2.5 billion by the end of 2015.

Self driving cars

The General Motors is the automaker based in the United Sates has invested five hundred million dollars and they have partnered with the ridesharing company to design the self driving cars and to accelerate both the companies in the transportation market.



The company planned t rollout the autonomous cars in 3 phases. The company officials announced that the first phase of the rollout of the autonomous cars will be available for the next year in which the semi autonomous cars will be available for the riders. However, the semi autonomous cars will drive only in fixed routes. And in the second phase, the autonomous cars will be available in many other places where the navigation tech is enabled in many other routes. In this phase the cars will drive only twenty five miles, an hour because the increase in the technology leads the software to face complex situations.

The last and final phase, the third phase will be sometime in-between 2021 and 2022 and according to the project all the Lyft vehicles will become autonomous.

People will stop owning cars

The number of cars bought by an individual has reduced in the past seven to eight years and this is because of the rise of the on demand transportation companies. The online ridesharing company, Lyft’s cofounder John Zimmer said that the people in the country will no longer invest in buying cars because of the launch of the self driving cars. Similarly, General Motors CEO Mary Barra said that the ownership of cars might decrease because of the availability of the peer to peer transportation facility. She said that the autonomous technology will be first introduced in the ridesharing vehicles and they will later introduce the technology in the individual cars.

Tesla is considered as the biggest competitor for General Motors and the company announced in 2016 that they have plans to operate a shared network and they would allow the vehicle owners can allow the strangers to use the autonomous cars and pay for the ride. The Lyft cofounder said that the company people will opt for their service because owners do not wish to rent their vehicle to someone and at the same time the riders expect to hail in well maintained and clean cars. The main reason behind the company’s possibilities of offering affordable rides is because of the management of the rides during the peak hours and its expertise in maximizing the utilization.

Lyft’s strategic plans

Many drivers fear that the launch of the self driving cars will reduce the number of drivers driving the car and eventually they will become jobless. But Zimmer said that the need for more drivers will increase in the next 5 years and will not reduce the demand. The idea is simple,                when the company launches the autonomous cars it will definitely reduce the cost of the ride which in turn increases the demand. And the self driving cars cover only a part of the trip and thus the need for drivers increase in the growing market. These kinds of strategic plans has earlier worked for the company, an example is that when the company once subsidized their rides and the cost of the rides were only five dollars to ten dollars, and this increased the demand.

The future of Lyft

The company has prepared few plans for the next generation on demand service that includes many changes in the way people hailed a cab. In the future the riders can see different kinds of Lyft vehicles, like a bar car that have bar facilities in it, so the rider can have fun while riding back home. The riders can watch movies and enjoy their ride with their friends and family if they chose the entertainment car, riders can experience comfort with the virgin American cabins, there are sleeper cars where people can take a nap and there are also private version of the vehicle that offers a comfort space for the riders to do office work, etc.

While enjoying all the luxury and comfort in these vehicles, people need not worry about cleaning and maintaining the vehicle or dealing with the parking lots. The company envisions that they operate in a hybrid network, where the self driving cars are used by the drivers and they have a calculation that by 2025 with the advancement of the technology there are chances for the vehicles to be built without steering and pedals. However, there are still more factors that has to be dealt regarding the driverless cars, like who will take responsibility of the fleet of the self driving car, how the federal government and the state government can act towards the process and what will be the state of the drivers after the full establishment of the autonomous cars.

The on demand car hailing company and its automobile partner, General Motors is testing their self driving cars in Arizona and San Francisco in a private area, they have not yet decided about the dates of the public testing of the vehicle.
Author Bio :- 

Anand Rajendran is the CEO and Co founder of RUTAPP Infosystems, a company that provides customizable app development services for IOS and Android users.He has been in the digital marketing industry for more than 5 years who assist organizations to enhance their online business with the latest strategies. Ridecy script  mobile app mainly designed for the taxi owners to focus more on their business with advanced features.