July 8 (Bloomberg) -- Lyft Inc. is taking its ride-sharing service into New York this week and is abandoning its trademark pink mustaches in the process, taking on rival Uber Technologies Inc. in one of the biggest U.S. markets.
The startup will begin with 500 drivers in the most populous city in the U.S. at 7 p.m. on July 11, Lyft co-founder John Zimmer said in a phone interview. The San Francisco-based company has seen strong demand from potential drivers and users in New York, where Lyft’s mobile application was downloaded 75,000 times, he said. To challenge Uber, which operates an unadorned fleet of vehicles, Lyft is giving up in New York the big pink mustaches that usually grace its drivers’ cars.
Moving into New York is “something we wanted to do for a long time, especially in the outer boroughs, building into a vision of creating a personal transit network at the lowest possible cost,” Zimmer said.
Lyft’s debut in the mecca of urban transportation offers more competition to Uber in the booming market for new ways to move people and cars more efficiently through cities. By disrupting local taxi industries, Uber and other car-booking and ride-sharing apps have faced lawsuits in the U.S. and demonstrations in cities from London and Madrid to Berlin and Paris. Uber was valued at $17 billion last month in a new financing round, making it worth more than public companies such as Hertz Global Holdings Inc. and retailer Best Buy Co.
Lyft’s move boosts New York’s profile as a key car-service battleground. Uber yesterday temporarily cut the price of its UberX service by 20 percent in New York, striving to become cheaper than taxis. Lyft’s service in New York will also be more affordable than a taxi, Zimmer said, declining to compare fares to Uber’s.
Lyft and Uber are both working to upend urban transportation and have amassed stockpiles of cash to expand operations. Uber raised $1.2 billion in the funding round last month. In April, Lyft received $250 million from investors including Alibaba Group Holding Ltd. and has been rolling out its service in new cities. New York is the 68th city where Lyft will operate, Zimmer said.
Zimmer said Lyft has an opportunity in New York because 95 percent of the city’s transportation covers Manhattan and the airports, leaving boroughs such as Brooklyn and Queens underserved.
To stoke demand, Lyft will offer its service in New York for free for at least the first two weeks. The company, which makes revenue by taking a 20 percent commission from drivers for each trip, will waive that fee for now. Lyft has also temporarily waived its commission in all of its markets. Lyft said it discussed its service with the city government, as well as the New York City Taxi & Limousine Commission.
New York Debut
Lyft doesn’t anticipate any protests as it begins operating in New York, Zimmer said. Lyft’s service in New York will also be a pure ride-sharing one, he said. While UberX is a ride-sharing service in the other 74 U.S. cities where it operates, UberX drivers in New York have a taxi license and follow a more traditional commercial model.
Uber also offers luxury car-booking and other services in New York, including providing helicopter transport to the Hamptons from Manhattan for $2,500 for five people over the Fourth of July weekend.
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