Lyft and the Future of Transportation

On Wednesday, on CNBC’s “Power Lunch,” John Zimmer, co-founder and president of Lyft, made a rather interesting comment regarding the state of transportation: “Every year in the United States, $2-trillion is spent on car ownership and yet we use our cars only four percent of the time.” Two trillion.

On Wednesday, on CNBC’s “Power Lunch,” John Zimmer, co-founder and president of Lyft, made a rather interesting comment regarding the state of transportation: “Every year in the United States, $2-trillion is spent on car ownership and yet we use our cars only four percent of the time.”

Two trillion. That’s a “2” with 12 zeroes after it.

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Zimmer went on to observe that because of this inefficiency (four percent use rate), “over the next 10 to 20 years, that spend will transition from car ownership to people accessing transportation as a service. We think eventually people will be subscribing to Lyft plans instead of owning a car.”

While he cited his own company—for obvious reasons—let’s not lose sight of the fact that there are also ride hailing companies including Uber, Gett, Curb, and many others. In addition to which, there are ride-sharing services like Maven, Car2Go, Zipcar, and others, too.

So the challenge to OEMs going forward may be that there will be a notable reduction in ownership of vehicles as people begin to opt for alternatives.

And as regards OEMs and Lyft, not only does GM have an investment in the company, but it has announced that it will be testing a fleet of autonomous Lyft Bolts next year; Ford announced last month that it is working with Lyft to deploy a fleet of self-driving cars, expected around 2021.

On the subject of its strategy for self-driving vehicles, Zimmer told CNBC: “We’re creating an open platform. So think of Lyft as a network, maybe like AT&T, where people launch different devices on it. So that open network has allowed us to sign up multiple partners that will be launching their—testing their autonomous vehicles over the next, let’s say 12 to 24 months.

“In addition, we are also building our own self-driving system so that we learn about how to build that system and we ensure we have access when it comes to full fruition.”

With the serious money that Zimmer is talking about, with all of the momentum being put behind self-driving by global automakers and technology companies, it seems that this is the space that people need to be in.