Lyft’s John Zimmer sees cities transformed by ride-sharing and self-driving cars

It’s hard to overestimate the potential impact of sweeping technologies such as artificial intelligence and sharing economy platforms. But John Zimmer, co-founder and president of U.S. on-demand transport firm Lyft, says ride-sharing is helping societies rethink both car ownership and how cities are designed.

Zimmer was speaking at the New Economy Summit (NEST) 2018 conference in Tokyo, and talked about Lyft’s rapid growth and its plans for the future. Founded as Zimride in 2012, the San Francisco-based company saw big gains in 2017. Rides grew 130% to 375 million and passengers jumped 92% to 23 million, with revenue topping $1 billion.

“Our mission is to improve people’s lives with the world’s best transportation,” said Zimmer. “If you look at how broken transportation is – the average American spends $9,000 a year on owning and operating a car and uses it only 4% of the time. So Americans spend more money on a car they don’t use 96% of the time than on food. So we can bring the equivalent of a $5,000 tax credit to every American household if we cut these costs in half. There’s a huge opportunity and I’d say we’re just at day one.”

Car ownership: A thing of the past?

Last year Lyft expanded into Canada, its first foreign foray, while bringing in new funding of $1.5 billion, raising its valuation to $11.5 billion. In a conversation with moderator Akiko Fujita of CNBC, Zimmer said Lyft “would love to be in Japan” and would look at the possibility of working with regulators as well as local partners to offer services that could compete with Japan’s high-quality taxis.

Zimmer also discussed his broader vision for urban transportation, in which people living in big cities will have no need to own cars by 2025. The firm aims to keep introducing services that make vehicle ownership harder to justify. One example is Lyft Line, a service through which users share the ride with others on the same route, allowing them to save up to 60% on fares. Another is a subscription service that Lyft is experimenting with. Users will get a certain number of miles every month, just like minutes in a smartphone calling plan.

“We just don’t think it makes sense economically, environmentally and socially for most people to own a car outright,” Zimmer said.

Zimmer shared his views on how customers are seeing Lyft as a replacement for car ownership instead of a replacement for traditional taxis. Last year, 250,000 Lyft users got rid of a car, he said, adding that many of those were probably secondary vehicles.

Meanwhile, Lyft services can be complimentary to public transit, biking and walking. In 2016, Lyft joined forces with the city of Centennial, a suburb of Denver, to offer free rides to and from Dry Creek rail station. It was one way to help address the “first mile-last mile” problem of getting riders to and from public transit points.

Partnering for self-driving cars  

Another force that’s widely expected to change transportation is self-driving cars. In the race to develop that market, Lyft teamed up last year with Waymo, the autonomous car unit under Alphabet, Google’s parent company. Lyft has also entered a partnership with Ford Motor, forming a plan to deploy large numbers of self-driving Ford vehicles on the Lyft network.

Zimmer said that self-driving cars are an important part of the solution that Lyft wants to offer, emphasizing that the technology can save lives, but he added that ride-sharing is just as crucial in the overall goal of transforming the way people get around. He compared these big socioeconomic changes to the historic effects of transportation systems such as canals and highways.

“If the product is a city, and we think of how to best serve people living in that city, we should design it for people to breathe clean air, walk where they want to go, see natural beauty and interact with others,” said Zimmer. “It’s going to be difficult and it’s going to require a partnership between governments and companies. I don’t think there’s a more important change that we’re going to see in the physical environment of our cities than what’s about to happen in transportation.”

Read more reports on NEST 2018 here.