Lyft launches default tipping, rating protections and more to keep drivers happy

Until autonomous vehicles are here, ride-hailing companies like Lyft and Uber have to attract and retain human drivers if they hope to sustain their businesses.

Lyft announced Thursday a half dozen new driver-friendly features, from default tipping and in-trip tipping to ways to protect their ratings and an events planner. Lyft also committed to rolling out at least one new feature or enhancement from its driver community each month.

All of these new features came out of Lyft’s Driver Advisory Council, which was formed in 2016.

Lyft has allowed tipping through its ride-hailing app for years. It’s a feature that has helped Lyft drivers earn $1 billion in tips, according to Lyft. Now it’s expanding tipping to help boost earnings.

Beginning next month, Lyft will add a default tipping option and in-ride tipping for select riders. There will be a broader roll out after the New Year. If riders select default tipping in the app’s settings, Lyft will automatically apply their pre-set tip percentage to the driver’s earnings when they don’t proactively rate a trip and add a tip themselves.

Meanwhile, the in-ride tipping option allows riders to give a tip during their ride. These days, the ride has to end before a rider can issue a tip. Lyft found that riders open the app during 53 percent of trips, a data point that suggests an in-ride tipping option might boost earnings for drivers.

Lyft is also going to start dropping the single-lowest rating for every driver, exclude low ratings for the stuff like heavy traffic outside their control, and default to a five-star rating if riders don’t rate their drivers.

The single-lowest rating will be dropped every 100 rides the driver completes.

The rating policy will work the same way for passengers and drivers: if a ride is left unrated, the rating will default to five stars, Lyft said.

Finally, Lyft is rolling out an event planner of sorts. This feature is designed to give drivers insight into upcoming local events. It will also display a demand graph that shows the busiest hours of the day.

Uber continues to lose money as it scales scooters, bikes and other newer businesses

Uber, which is expected to go public sometime next year, just released its Q3 2018 financial results. Uber’s net losses increased 32 percent quarter over quarter to $939 million on a pro forma basis, though Uber expected these losses as it continues to invest in future growth areas.

On an earnings before interest, taxes, depreciation and amortization basis (EBIDTA), Uber’s losses were $527 million, up about 21 percent quarter over quarter. And as Uber prepares to go public, the company has started presenting the income statements with stock-based compensation.

Ten years from now, Uber CEO Dara Khosrowshahi envisions its core ride-hailing business accounting for less than 50 percent of Uber’s overall business, Khosrowshahi told me at TechCrunch Disrupt SF 2018. That means Uber expects businesses like Eats, scooters, bikes and freight to contribute to be more of Uber’s business, which requires Uber to invest heavily in those businesses.

Revenue for Q3 was up five percent quarter over quarter at $2.95 billion and up 38 percent year over year. Meanwhile, gross bookings were up six percent quarter over quarter and 34 percent year over year at $12.7 billion.

Uber, for the first time, has also broken out Eats specific gross bookings, which the company says accounted for $2.1 billion of overall gross bookings and is growing over 150 percent year over year. Last month, Uber announced its intention to expand Eats to cover 70 percent of the U.S. population by the end of this year.

Other key stats for Uber’s Q3 2018:

  • Adjusted EBITDA margin: 4.1 percent of gross bookings (In Q3 2017, that was 6.4 percent)
  • Gross cash: $6.55 billion, not including the $500 million from Toyota or the $2 billion from debt offering

This is Uber’s first quarterly earnings report under CFO Nelson Chai. Uber, which had been without a CFO for more than three years, brought on Chai just three months ago.

“We had another strong quarter for a business of our size and global scope,” Uber Chief Financial Officer Nelson Chai said in a statement. “As we look ahead to an IPO and beyond, we are investing in future growth across our platform, including in food, freight, electric bikes and scooters, and high-potential markets in India and the Middle East where we continue to solidify our leadership position.”

Bombardier investors spurn CEO optimism as bonds, stock drop

Bombardier Inc. bonds are joining the company’s stock plunge on fresh concern over cash-flow prospects at the manufacturer of planes and trains.

The market swoon underscored investor anxiety about Bombardier’s prospects despite Chief Executive Officer Alain Bellemare’s upbeat 2020 outlook at an investor conference Tuesday — his first public comments since the company lost a quarter of its market value after reporting earnings last week.

Canada’s largest aerospace company surprised investors Nov. 8 by saying it would need to tap proceeds from the sale of its Downsview facility in Toronto to meet a goal of breaking even on a cash-flow basis this year, plus or minus $150 million. Next year’s goal of break-even cash flow, plus or minus $250 million, fell short of analyst estimates.

“A lot of people are still scratching their heads about the cash-flow forecast,” David Tyerman, a Cormark Securities analyst, said by telephone from Toronto. “They have a fair bit of debt so anything that negatively affects cash flow would be a drag.”

The cost of insuring Bombardier’s five-year notes against default widened 57 basis points to 514 basis points, the highest since December 2016, according to data provider CMA. Bombardier’s Class B stock also plunged, falling 10 per cent Tuesday to the lowest in a year.

Investors and analysts focus on free cash flow because of the company’s need to pay its debt. Bombardier, based in Montreal, had about US$9.5 billion of adjusted debt as of Sept. 30, with its next major maturity coming in March 2020, when US$850 million comes due.

“We’re disappointed” about the cash flow miss, Bellemare said at a Scotiabank conference in Toronto, citing “a little bit of a setback” in the company’s train unit. But he insisted that the company was on track for longer-term targets.

“We have clear line of sight to delivering on our 2020 goal” and generating US$750 million to US$1 billion of cash that year, he said. Analysts expect free cash flow of about US$781 million for 2020, according to the average estimate compiled by Bloomberg.

Separately, Quebec’s financial markets regulator, Autorite des Marches Financiers, will look at the recent movements in Bombardier’s share price as part of a customary review, spokesman Sylvain Theberge said. Bombardier is based in Montreal, the largest city in the province of Quebec.

“This is not a formal investigation,” Theberge said Tuesday in a telephone interview. “We are not on the Bombardier case. Our teams do these kinds of systematic checks anytime a stock has an unusual move. If we have to go further, we will.”

Bloomberg News

Lime is debuting its line of shareable vehicles in Seattle this week

Lime, the well-funded startup known for its fleet of brightly colored dockless bicycles and electric scooters, has a new way for its customers to get around: cars.

Beginning this week, Lime users in Seattle will be able to reserve a “LimePod,” a Lime-branded 2018 Fiat 500, within the Lime mobile app. There will be 50 cars available to start as part of the company’s initial rollout. Lime plans to increase that number at the end of the month.

“LimePods, Lime’s car-sharing product line, a convenient, affordable, weather-resistant mobility solution for communities,” a spokesperson for Lime said in a statement provided to TechCrunch. “The ease of use of finding, unlocking, and paying for cars will be consistent with how riders use Lime scooters and e-bikes today.”

Lime will roll out 50 “LimePods” in Seattle this week.

Rides in the LimePod will cost $1 to unlock the car and 40 cents per minute of use. The company plans to unleash additional shareable cars in California early next year. Its scooters and e-bikes, for reference, are $1 to unlock and 15 cents per minute and regular pedal bikes are $1 to unlock and 5 cents per minute.

Founded in 2017 by Berkeley graduates Toby Sun and Brad Bao, the startup has raised a total of $467 million to date from GV, Andreessen Horowitz, IVP, Section 32, GGV Capital and more. Reports indicate that Lime is on the fundraising circuit now, targeting a $3 billion valuation, or nearly 3x its latest valuation.

LimePods will be available to order in the Lime mobile app.

The company is expanding rapidly, most recently releasing a fleet of e-scooters and bikes in Australia, as well as making notable hires on what seems like a weekly basis. In the last month, Lime has tapped Joe Kraus, a general partner at Alphabet’s venture arm GV and an existing member of the startup’s board of directors, as its first chief operating officer. Before that, it brought on Uber’s former chief business officer David Richter as its first-ever chief business officer and interim chief financial officer.

In July, the company hired Peter Dempster from ReachNow to lead the LimePod initiative out of Seattle.

Tesla, GM and Nissan are all part of a new coalition aiming to extend the EV tax credit

Tesla, GM and Nissan are among a group of 15 companies that launched a new coalition aimed at reforming the electric vehicle tax credit.

The group, called EV Drive Coalition, brings together a mix of automakers, industry giant ABB, climate change and energy lobbying organizations and EV infrastructure companies, including ChargePoint.

The coalition, which officially launched Tuesday, wants to pass legislation that would tweak the federal electric vehicle tax credit to “ensure that it works better for more consumers for a longer time frame and spurs increased growth of the U.S. EV market.”

The federal electric vehicle tax credit gives consumers a $7,500 credit when they buy an all-electric vehicle. The incentive has been credited with spurring adoption of EVs. However, once an automaker has sold 200,000 electric vehicles, the credit begins to wind down.

Tesla is already in this position and GM is closing in. Earlier this year, the electric automaker delivered its 200,000th electric vehicle. The achievement activated a countdown for the $7,500 federal tax credit offered to consumers who buy new electric vehicles. Under these rules, Tesla customers must take delivery of their new Model S, Model X or Model 3 by December 31 to get the full credit.

Tesla vehicles delivered between January 1 and June 30, 2019, will get a reduced $3,750 federal tax credit. After that, the credit drops to $1,875 before ending altogether. As of October, GM has sold nearly 197,000 electric vehicles.
Tesla GM electric vehicle tax credit

The EV Drive Coalition wants to lift the current cap on the number of consumers who can take advantage of the credit through each manufacturer.

“Arbitrary constraints with the federal credit limit consumer options and make it harder for consumers to purchase the cars they want,” Joel Levin, executive director of Plug In America said in a statement. “Lifting the cap would create a more level playing field for all manufacturers, giving consumers the freedom to decide which car they want in a free and fair market. Increased competition spurs more American innovation and technology.”

The coalition says it supports the eventual phase-out of the credit once the EV industry has had additional time to mature and grow.

GM is going to allow Ford vehicles and other competitors on its Maven car-sharing platform

GM’s car-sharing subsidiary Maven is undergoing another expansion. This time, it’s not just to a new city.

Maven plans to open up its new peer-to-peer car rental service to allow owners to rent out non-GM vehicles.

It is also setting its sights on bigger changes in the future, according to Julia Steyn, vice president of GM Urban Mobility and Maven, said Monday during a presentation at the UBS Global Technology Conference in San Francisco.

By mid-2019, Maven will allow non-GM branded vehicles on the platform, Steyn said. That means a Maven member with a Tesla Model S or a Ford F-150 will be able to rent their vehicle out via the peer-to-peer car-sharing platform.

Steyn said Maven plans to open up the platform to micro-fleet entrepreneurs and add more services and expand its geographic footprint, including in Canada and other international markets.

Maven, which launched in January 2016 and has undergone a number of changes in its two-and-a-half years of existence. The mobility division initially launched as a car-sharing service akin to Zipcar. The company owns a fleet of GM vehicles and developed an app that lets customers rent the cars when they want and for short periods of time. In 2017, the company launched Maven Reserve in Los Angeles and San Francisco to allow customers to rent its GM-branded vehicles for a month at a time. It also has a program called Maven Gig that rents out vehicles to rideshare and delivery drivers who use apps like Instacart, Uber, Lyft and UberEATS.

Earlier this year, Maven launched a peer-to-peer car rental service, which operates similarly to how Turo and Getaround work, in Chicago, Detroit and Ann Arbor, Mich. At the time of the launch, the program only allowed owners to rent out their personal Chevrolet, Buick, GMC or Cadillac cars or trucks. To qualify, the vehicles have to be a GM model year 2015 and newer.

Unlike competitors, Maven is maintaining this dual car-sharing approach. It will continue to offer its own fleet of GM-branded cars for rent on the platform and expand the peer-to-peer option to more cities. In short, Maven, which has 170,000 members, is using the peer-to-peer car-sharing option to diversify its supply and to expand its market reach.

“Cars is where our heritage is, but I’ll tell you where else it’s going to go, Steyn said, before noting that there are a lot of assets out their such as boats that are under-utilized and could be monetized on a platform like Maven.

“If, at some point, there’s a UFO that you want shared and you want to be on the platform and it’s going to do a job for somebody, we’ll be able to put it on the platform,” Steyn said, emphasizing the flexibility of the Maven.

BlaBlaCar to acquire Ouibus and offer bus service

French startup BlaBlaCar is announcing plans to acquire Ouibus, the bus division of France’s national railway company SNCF. For the first time, BlaBlaCar is moving beyond carpooling and plans to offer both long-distance carpooling rides and bus rides.

BlaBlaCar already ran a test with Ouibus for the past six months on popular corridors. It looks like both companies are happy with this test, as SNCF is willing to let BlaBlaCar run Ouibus from now on.

As part of this deal, BlaBlaCar is announcing a new $114 million investment (€101 million) from SNCF and existing BlaBlaCar investors. I’d guess that this isn’t just cash but probably cash and shares as part of the move with SNCF. Yes, you read that correctly, SNCF is now an investor in BlaBlaCar.

Ouibus has transported more than 12 million passengers over the past few years in France and Europe. Many thought that buses would hurt BlaBlaCar over the long run. By offering buses on BlaBlaCar directly, the company can capitalize on its brand and huge community to counter that trend. BlaBlaCar is now a marketplace for road travel.

BlaBlaCar is taking a risk, as Ouibus has been relentlessly losing money. Just like other bus companies, Ouibus relies heavily on contractors, which means that BlaBlaCar could quickly adjust the offering. It’ll also depend on product integrations on BlaBlaCar, OUI.sncf and other platforms.

BlaBlaCar currently has 65 million users in 22 countries and is about to reach profitability. And you can expect to find ridesharing offers on OUI.sncf in the coming months.

Lyft is launching a rider loyalty program in December

Ridesharing service Lyft is today announcing its new plan to encourage repeat use: the launch of Lyft Rewards, a loyalty program for riders. The program, which will begin rolling out next month to select riders across the U.S., will let riders earn points for each dollar spent, which can then be used for upgrades to nicer cars or savings on future rides, among other things.

The company already caters to its regular riders in several ways, including through its recently launched subscription service, a program that rewards business users, and its partnership with Delta that allows riders to earn Delta airline miles with Lyft.

The new rewards program will aim for everyday riders, in order to better retain their business as a part of Lyft’s larger battle with Uber .

According to Lyft, riders will soon be able to earn points as they ride with Lyft, which can be accumulated over time and then used for upgrades. Initially, this includes getting upgraded to Lyft Lux or getting discounts on future rides. The company says it’s considering how to offer other passenger perks, like access to more experienced drivers and double-points days, for example. It’s also listening to customer feedback to hear about other rewards people may want.

The company says the program will launch in December 2018 and be available to select riders in various cities to start, before rolling out to more riders in 2019. If invited to join, riders will have an email or a notification from Lyft with the offer. Once enrolled in the program, riders will be able to check their points progress in the app.

The launch of Lyft’s loyalty program comes shortly after the company announced its “1 billion rides” milestone in September, a couple of months after Uber hit 10 billion trips.

Uber, meanwhile, has also been working on ways to better cater to its most frequent customers, including with last year’s launch of an Uber credit card that offers cash back on rides and UberEats dining. It has also dabbled with merchant offers, and rolled out its own subscription program.