Lyft is venturing into the car rental business. This ride-hailing company made an announcement recently, saying that it will start a rental service. The service will be made available in the Lyft main app for smartphones. It will work just like any other car rental service. Operations will start in Los Angeles, California and San Francisco Bay Area. Renters will receive two $20-ride credits from the company to cater for the cost of driving a Lyft to the pickup point and from the drop-off point.
In addition to the ride credits, Lyft is offering more incentives at launch to attract renters and compete with incumbents. First, the minimum age for a renter will be 22 years old. All they will need is a driver’s license—a valid one. Second, mileage limits will not be a thing. According to Lyft, it plans on charging only the local gas market rate. This means that renters don’t have to fill up the cars before dropping them off. People will be able to rent cars for one day or even two weeks.
At launch, the Volkswagen Atlas SUV and the Volkswagen Passat Sedan will be made available to renters in San Francisco. In Los Angeles, the launch cars will be the Mazda CX-5 SUV and the Mazda 3 Sedan. The pricing set by Lyft is also quite enticing. The Passat in Francisco, for instance, will be priced at $35 per day. However, Lyft says that the pricing is likely to change depending on several factors.
The company has still not specified the model year version of its cars. But it says that each one of the cars features Android Auto and Apple CarPlay. It hopes to bring in hybrid versions soon. The company has also said that it will buy carbon offsets.
With the car rental service, there will be three different categories of coverage. These will be optional. The first one is a tier that will cover personal property and personal injury. Another one will cover any damages done to the car. ($25 for SUVs and $16 for sedans. These are daily rates). The last one is a supplemental liability option. It offers coverage of up to $1 million against third party claims.
Uber tried to get into rental services through partnership with another car-sharing company. Towards the end of 2018, this program was shut down. The two companies, Lyft and Uber, have leased and rented cars to their platform drivers in the past.
However, this is the first time that any of them is making a full-throated attempt at the rental car space. The market is dominated by few players and they are fighting hard not to lose their customers to these ride-hailing services.