Currently, all the businesses are carried out online, which makes the operability of businesses easy for an entrepreneur. There was no concept of digitization in the ventures in previous times as the people were part of the conventional business models. The entrepreneurs were also fed up using those models for their ventures.
The people need to visit the local business premises as their time was wasted up to some extent. Hence, they cannot focus on the work they want to perform. The entrepreneurs were also facing the problems of managing their business manually performing every operation. So, this issue of the public and entrepreneurs was later solved by technology.
Digitization was brought into the picture by introducing the apps for performing the business. However, whether it is a food delivery business, grocery delivery, medicine delivery, or insurance business, these mentioned business sectors were not so efficient in the market.
But, when it came to the taxi-sharing business, the apps gained immense popularity as the hard work of going towards the main roads was eliminated. Instead, the user can hire a taxi through an app by performing a few taps on their mobile phones. These apps are Lyft, Uber, Via, BlaBlaCar, etc.
Little Bit Information About Lyft:
The company was founded 9 years ago, on June 9, 2012. The company is based in San Francisco, California. Previously in 2012, the company began with an initiative of serving the rides between the cities with the name of Zimride.
Later, in 2013, the company was renamed Lyft and served the shorter trips within the cities to the customer. The customer receives the mind-blowing app experience of cab-booking through an app, where he can book/schedule the ride, see the driver’s current location, and view the estimated time of reaching the driver at their entered pick-up location.
With such a facility offered to their customers, the firm received a great response from the public in the form of the number of current users, which were 18.73 million according to the analysis of 2021.
Amongst all the apps, Lyft rose much higher in the US taxi-sharing market. Hence, the local taxi business owners were motivated to develop app similar to lyft to initiate their businesses online. Moreover, the platform comes with amazing customization options and enable entrepreneurs to hit the market earliest.
Business Model of Lyft:
Source : FourWeekMBA
Lyft consists of the business model for its major 3 stakeholders – customer, driver, and admin. All of the three users receive certain advantages. For example, as admin can handle the business quickly by sitting at their homes, while the Drivers can work according to their availability, can receive the payments by deducting the commission, & the customer can get the service of booking from an app, and the driver arrives at their pick up point within a few minutes.
The company gives the finest value proposition to its drivers and customers. Following are the value propositions mentioned for both the stakeholders of the company:
- Minimal wait time: The customer can now instantly seek the ride-hailing experience as the taxi arrives rapidly within a few minutes of booking it.
- Multiple payment gateways: The consumer can pay through various payment methods available to them.
- Discount on rides: The user can get the various discounts on the occasions or on their first ride-booking experience.
- Live tracking of taxi: The customer can track the cab they have booked through in-app navigation available.
- SOS panic button: The customers can call emergency help through an SOS panic button provided in an app in dangerous situations if they feel unsafe.
- Additional Income Source: The driver can get a task from an app and can get the payment when the ride finishes as an extra income source.
- Adjustable Working Hours: The driver can set their availability status through an app and can work accordingly.
- Simpler Payments: The firm provides a driver the simpler payments by deducting the 20% of their payments received.
From Where Does The Lyft Earn A Revenue?
The company provides a taxi-sharing service to the customers where they can book their rides according to their suitable time for sharing a ride. Now, let us go through the following aspects through which Lyft generates its revenue:
Various Packages Served:
The platform provides various packages to their customers to get multiple facilities as they need to pay several charges to the firm.
Commission from rides:
With every payment made to the driver on finishing their trips, Lyft deducts 20% of payments as a commission and pays the rest of 80% payment to the drivers.
Charging as per requirements:
The firm has the feature of a heat map being provided in the app. It denotes the density of requirements generated into the map, and Lyft charges fees to the users, which is directly related to a heat map.
Hence, you can establish your venture by implementing the business model of Lyft and can survive in the market as there are enormous demands of automating businesses because it becomes a challenging task for local offline businesses to handle such significant demands.