The company currently has a presence in 40 countries and five continentsRead more...
No financial terms disclosed, Lyft will now put focus entirely on its ride-sharing service
Ride-sharing company Lyft has finally shed the last of its old legacy by selling its peer-to-peer ride-matching service Zimride to Enterprise Holdings, it was announced Friday.
Financial terms of the acquisition, which on closed July 10, have not been disclosed. Lyft will help Enterprise expand Zimride's services through a transition period.
It should be noted that Lyft itself is not being sold to Enterprise, only the Zimride product. And by selling off its carpooling service, Lyft will be able put greater focus on the ride-sharing part of the business, which is growing faster and expanding into new markets.
The company now known as Lyft was originally named Zimride, and it was launched by Logan Green and John Zimmer in 2007.
Zimride was an online service that connected passengers and drivers via their Facebook profiles to share the cost of a road trip. The service became especially popular with college students, and was able to raise $7.5 million by September 2011, including $1.2 million in seed funding from Floodgate, K9 Ventures, and various angels and then another $6 million in a Series A round of funding led by The Mayfield Fund, with participation from Floodgate and K9 Ventures.
As Zimride grew, the company then decided to launch a ride-sharing service, called Lyft, in May 2012. That proved to be the turning point, as Lyft turned out to be more popular than Zimride. Lyft quickly became where the company put its focus and Zimride officially changing its name to Lyft in May, the same month it raised $60 million from Andreessen Horowitz.
While the company changed its focus, and eventually had little use for its original service, there is actually great upside for Enterprise to acquire the Zimride assets.
Enterprise Holdings, which operates Enterprise Rent-A-Car brand as well as the National Car Rental and Alamo Rent A Car brands, already has two products in the car-sharing and carpooling space: Enterprise CarShare, a suite of products and policies specifically geared to the car-sharing customer experience; and Enterprise Rideshare, a carpooling and vanpooling program for commuters.
Zimride is currently the largest ride-matching program in the United States with more than 350,000 users on 130 universities, and Enterprise will now be able to leverage its userbase, and technology, into its own products.
“This acquisition is the perfect complement to our existing car-sharing, vanpooling and car rental services,” Ryan Johnson, assistant vice president overseeing Enterprise CarShare and Rideshare operations, said in a statement. “With Zimride’s industry-leading technology, we will be able to even further enhance our offerings and provide a total transportation solution to our partners and customers worldwide.”
This deal will also help Lyft focus on expanding to new cities, and dealing with the legal problems that inevitably come with that.
The company recently received a cease and desist letter from Los Angeles Department of Transportation, despite the California Public Utilities Commission agreeing to allow the company to operate legally in California last year.
Vator has reached out to both Lyft and Zimride for comment, and we will update if we hear more.
(Image source: https://online.wsj.com)
Read more from our "Trends and news" series
The company will fold all three startups into its existing products, including its Brex CardRead more...
The company wants to simplify commercial insurance for both small businesses and freelancersRead more...