On the occasion of the presentation of its quarterly results Tuesday, November 10, 2020, Lyft explained that it is considering the deployment of a new service to appropriate a share of the growing home food delivery sector. The service could help it offset its loss of 48% of its revenue compared to the same period last year, as it stood at $ 499.7 million in this quarter, reports Reuters.
A different delivery service?
“What we are hearing from restaurateurs is that they are looking for a partner who does not take 30% commission, but still offers a delivery service”Lyft CEO John Zimmer told Reuters. The company, present only in North America, is therefore seeking to enter an untapped market, according to it, by offering a delivery service to restaurateurs without deploying a fully-fledged platform. An approach that differs from those of DoorDash or Uber Eats, which are aimed directly at consumers.
“Lyft has the infrastructure and technological capabilities to become a major player in the meal delivery industry”, assured Haris Anwar, an analyst. If Lyft ensures that it is still at the beginning of its reflection, such an offer could force players in this sector like Uber and GrubHub to lower their prices. The latter bill restaurants for each order placed, which arouses opposition from certain restaurateurs.
Results affected by Covid-19
This new service would also benefit drivers working on its platform, since they could diversify their sources of income. The passenger transport sector is strongly affected by the Covid-19 pandemic. Lyft does the same, if it assures that the requests for races continued to increase between July and September compared to previous months, while noting significant variations by city. And unlike Uber, Lyft cannot compensate for the downfall of its VTC entity with its delivery business.
However, Lyft reiterated its ambition: to be profitable at the end of 2021. An objective that the firm thinks it can achieve even if the gross amount of reservations (the money received for races and deliveries before remuneration of drivers and other expenses) remains 5-10% below pre-pandemic levels. To achieve this result, the VTC company mentioned a rigorous budget and cost reductions. But also, why not, the launch of this delivery service.