nav
Business Operations Business Models

How Does Lyft Make Money (Business and Revenue Model)

The Lyft business model

How Does Lyft Make Money?
Here’s what you should know:
  • What is Lyft, and how does Lyft work?
  • How does Lyft make money?
  • Service and Commission Fees
  • Rental Revenue (Light Vehicles, Express Drive, and Lyft Rentals)
  • Lyft Pink (Subscription Fees)
  • Lyft’s Subsidiaries, Acquisitions, and Exits
  • Lyft’s profit and revenue
  • What is the Lyft business and revenue model?
  • Lyft’s funding and market cap

How does Lyft make money? Here is a full, in depth, breakdown of their three (3) revenue streams and the different products and services they offer, as well as the Lyft business model, their profit and revenue, and how Lyft works.

What is Lyft, and how does Lyft work?

Lyft is a rideshare company that has expanded its transportation service into bike and scooter rentals, car rentals, and food delivery services.

Founded in 2012 by Logan Green and John Zimmer, Lyft began trading on the NASDAQ on March 29, 2019, under the ticker symbol “LYFT”.

Now, Lyft has more than 18 million active riders using the service. Giving the company a 32% market share of the rideshare industry, second only to Uber with roughly 68% of the market share.

Some of Lyft’s competitors include Uber and other rideshare companies.

Lyft App in Apple App Store | Lyft Business Model | How Does Lyft Make Money? | How Does Lyft Work?
Source: Apple App Store | Lyft

How does Lyft make money?

According to pages 57 and 58 of Lyft’s 2021 Form-10K, Lyft has more than 18 million active riders using Lyft with an average revenue per active rider of $46.80 in 2021.

So how does Lyft make money off of all their active riders and drivers?

Below is a breakdown of how much money Lyft makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 3 ways of how Lyft makes money (in 2022):

Lyft has a revenue model that makes money in three (3) ways – service and commission fees, rental revenue, and Lift Pink subscription fees.

#1. Service and Commission Fees

Lyft makes the majority of its money by collecting service and commission fees from its drivers after every completed trip. In fact, according to page 86 of Lyft’s 2021 Form-10K, more than $2.9 billion or 92.2% of Lyft’s total revenue came from these rideshare fees in 2021.

As noted above, Lyft has more than 18 million active riders taking hundreds of millions of trips per year. Of which, Lyft collects a service and commission fee from each of those rides.

Lyft Service and Commission Fees:

  • Service Fees: flat fee is based on the region
  • Commission Fees: 20% of the gross fare
Lyft Service and Commission Fees | Lyft Business Model | How Does Lyft Make Money? | How Does Lyft Work?
Source: Lyft

Note: 92.2% of Lyft’s total revenue came from rideshare fees in 2021.

#2. Rental Revenue (Light Vehicles, Express Drive, and Lyft Rentals)

Lyft also makes money through its car, bike, and scooter rental programs – Light Vehicles, Express Drive, and Lyft Rentals. Which, in 2021, generated $250.3 million or 7.8% of Lyft’s total revenue.

To make this all possible, Lyft has partnered with rental companies like Hertz, SIXT, and Spin Scooter.

Lyft Rentals Cost:

  • Light Vehicles: scooters cost $1 to unlock and $.30 per minute. While bikes cost $1 – $3.99 to unlock and $0.05 – $0.34 per minute; or $9 – $29 per month for a bike membership (prices vary by region)
  • Express Drive: starting at $219 per week
  • Lyft Rentals: starting at $48 per day (prices vary by region, see the pricing here)
Lyft Rentals Cost | Lyft Business Model | How Does Lyft Make Money? | How Does Lyft Work?
Source: Lyft

Note: 7.8% of Lyft’s total revenue came from rentals in 2021.

#3 Lyft Pink (Subscription Fees)

Lyft also has its own monthly subscription membership for its users called Lyft Pink.

Introduced on December 4, 2019, Lyft Pink subscription offers perks like 15% off rideshares, free Grubhub+ memberships, free upgrades on Lyft Rentals, and more.

Lyft Pink Cost:

  • $19.99 per month; or $199 per year
Lyft Pink | Lyft Business Model | How Does Lyft Make Money? | How Does Lyft Work?
Source: Lyft

Note: With more than 18 million active riders using Lyft, it’s unclear how many of those have subscribed to this service.

Lyft’s Subsidiaries, Acquisitions, and Exits

To date, Lyft, Inc. has made a total of 11 acquisitions, 3 investments, and 2 lead investments.

Acquisitions
Source: Crunchbase | Lyft

Lyft’s profit and revenue

In 2021, Lyft reported $3.2 billion in revenue.

Note: Because Lyft, Inc. is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Lyft’s publicly released financial reports, including annual reports, through Lyft’s investor section on their website.

What is the Lyft business and revenue model?

Lyft makes money through a few revenue models that they combine within their company, they are:

  • Transportation as a Service (TaaS) business model
  • Subscription based business model
  • Transaction based business model
  • B2B2C (partnerships) business model
  • Business to business (B2B) business model
  • Mergers & acquisitions (M&A) business model

Lyft’s funding and market cap

According to Lyft’s Crunchbase profile, Lyft has raised $4.9 billion over 27 rounds with a market cap of $12.57 billion as of April 2022.