Lyft Is Racing to Win More Corporate Clients

Only 4 percent of business travelers who hail rides choose Lyft

Lyft Aims for Corporate Travel Market

Apple sent an e-mail to its employees in March, informing them of a change in transportation policy: "We're excited to announce a new partnership with Lyft." The email instructed Apple employees to take the pink mustachioed ride-hailing company for "safe, convenient and affordable rides when traveling for business."

It was a victory for Lyft Chief Business Officer David Baga. He won't talk about the deal, but Apple, the most valuable company in the world, picked Lyft over Uber Technologies Inc. "Please note that Uber is not an Apple-preferred provider at this time," the note to Apple employees read.

Baga, who started at Lyft in August, is working to dig the San Francisco-based ride-hailing company out of a big hole when it comes to corporate travel. Uber, the dominating global force in ride-hailing, got its start with black cars, whisking consultants and bankers to meetings with clients. Today, Uber is also the commanding force in ride-hailing business travel.

In January 2015, just 1 percent of business travelers hailing rides used Lyft, according to Certify, a travel and expense reporting service. Uber represented 46 percent of that market, and taxi cabs dominated at 53 percent. Taxis have seen their share plummet since, and Uber has made the biggest gains. In March 2016, Certify pegged taxis' business travel market share at 27 percent. Uber had 69 percent. Lyft claimed a meager 4 percent.

When it started in 2012, Lyft initially targeted a less buttoned-up crowd. The company came up with the idea that regular people could pick up other people in their personal cars, rather than rely on professional drivers. Lyft's slogan was: "Your friend with a car." Their cars had furry, and too-often dirty, pink mustaches perched on the grill. Drivers greeted riders with a fist bump.

Baga consulted for the first iteration of Lyft, called Zimride, half a decade ago, and he stayed in touch with the company's founders, Logan Green and John Zimmer, in the intervening years. "It did seem crazy to me at the time, but I loved, loved, loved John and Logan's passion," Baga said. "I was, frankly, really blown away by how much thought and consideration and determination they had."

Lyft has since revamped its image. Today, its slogan is: "A ride whenever you need one." That's the message Baga is pitching to potential corporate partners. Baga, who is supported by a team of more than 100 employees, has racked up quite a few new corporate clients. Lyft signed up 100 clients that it works with directly. It said employees of 1,000 additional companies also use Lyft. The company has landed Hewlett Packard Enterprise, Airbnb and Intuit as customers since Baga joined. Airbnb subsidizes some of the cost of a Lyft for employees traveling to and from public transportation. Hewlett Packard Enterprise recommends Lyft for corporate travel.

Arun Sundararajan, a professor at New York University's Stern School of Business, said that gaining corporate clients is an uphill battle for Lyft. "This is the one market which I think is better aligned with Uber's positioning than Lyft in part because Uber has the broader range of options and a larger fraction of the high end vehicles," said Sundararajan, who is the author of the forthcoming book, "The Sharing Economy." 

Baga said Lyft is winning over customers, in part, because of its relationship with drivers. (Like Uber, Lyft's drivers are independent contractors, but many of them have a fierce loyalty to the company, even after fare cuts earlier this year.) Lyft also recently built a scheduling program called "concierge" that lets businesses pre-arrange travel for their customers. The company said it's willing to tailor its services to meet its clients' needs, something many tech companies are reluctant to do.

One example of that customization is a partnership with CareMore, a Medicare program. CareMore, which is owned by Anthem, picks up and drops off non-emergency medical patients at doctor's appointments. Lyft is coordinating with specialized transportation services and tapping its own network of drivers. Wait times are averaging about 8 minutes, which is far faster than CareMore's previous partner, the company said.

"They've been really interested in the broader problem of, 'How do you actually serve patients who may have different needs?' " said  Sachin Jain, CareMore's president.

CareMore said it's a pilot program. The ride-hailing company will have to win over Jain and many more customers before it can rival Uber's size.

"I think having a majority share of the market is the goal," said Zimmer, Lyft's co-founder and president. "The goal has always stayed the same: replacing car ownership."

—With Alex Webb

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