Lyft
Independent Study + Consulting
Launching the rideshare company's first ever rental program.
Note: This project was my independent study, a semester-long thesis project that requires all students in the Creative Brand Management (CBM) track at the Brandcenter to secure a client on their own and work with them to solve a problem or explore a new opportunity that the client may not have the bandwidth to solve for themselves at the moment.
The Background
In an effort to make rideshare driving more accessible, Lyft launched its first-ever rental program, Express Drive (a.k.a. XD), in early 2018. Designed for people who either (1) don’t own a vehicle, (2) own a vehicle that is too old for the platform, or (3) own an eligible vehicle but want to avoid putting the added wear and tear on their own asset, Express Drive allows people to rent a car from Lyft (through partnerships with Hertz, Avis, and other rental companies) and complete rides for the rideshare giant. In exchange, renters get unlimited personal use of the car they rent, and all insurance and maintenance costs are covered by Lyft.
The Ask
I partnered with Lyft leadership in Richmond to help them launch Express Drive in the Richmond market.
Hypothesis
My grandfather struggled to hand over his car keys in the later years of his life and drove well past the point he was physically able to do so. I didn't realize it at first, but for him, his car was an extension of being in control.
With this experience in mind, I hypothesized that rideshare drivers may start driving for the potential of additional income and economic mobility, but they stay for the sense of control that driving gives them.
Approach
This sense of control was the main emotional benefit that I theorized most drivers experienced behind the wheel. And whether my hypothesis was right or wrong, I knew that as I put my research plan together, I had to determine what that emotional benefit truly was. I knew that once armed with that insight, it would influence:
How we positioned the program
Who we talked to
How we talked about the program
Methodology
Brand Audit
Rideshare Forums
Competitive Audit
Driver Townhall
Social Sentiment Analysis
Survey
First-Hand
Express Drive Experience
1-on-1
Express Drive Interviews
Focus Group
(Cash Cab Style)
Learnings
1. Commitment + Passion
Rideshare drivers approach driving with fervor of a full-time job, regardless of whether or not they drive full-time.
Throughout all of my research, I was blown away by just how seriously and the vast majority approached the job. It became very clear very early on that this was much more than just a part-time gig for most drivers, even though the majority of them in Richmond (~90%) drive part-time.
In this clip, one of our focus group participants, Jeff, discusses how when his car got totaled, he cross-referenced his search for a new car with the list of vehicles that would be eligible for Lyft XL and Lyft Lux - quite the commitment for someone with a separate full-time job.
Implication: Drivers must be treated like insiders because they have that intimate level of knowledge.
2. Community + Inclusion
Rideshare drivers, especially in Richmond, are a tight-knit group who know and look out for one another.
54% of drivers in Richmond reported first hearing about Lyft through word of mouth, it was clear that this was a well-connected group.
The best example of this was the RVA Rideshare Facebook Group, a cohort with over 800 members that boasts roughly 80% engagement. Group members post constantly, usually about tips and tricks to boost profitability or recommendations for good car washes or maintenance centers (top two posts shown).
The activity and feedback in the group was so consistent, though, that some members even started turning to it for things wholly unrelated to rideshare driving (bottom post shown), as well, demonstrating just how important this sense of community was to the group's members.
Implication: Word of driver experiences, positive or negative, travels swiftly, so the early stages of any new program are crucial, as driver' initial experiences will quickly become the general perception of the community.
3. Ownership + Control
Ownership and control was, in fact, the main emotional benefit that drivers felt from driving, but it manifested itself in more ways than expected.
The desire for control extended not only to the ability to set one's own schedule, but also to determining one's earning potential. 81% of survey respondents reported that setting their own schedule was the most important non-financial attribute of driving, and many more stressed the importance of being their own boss.
What was surprising, though, was how driver's felt the need to control as much of their work environment (cleanliness, temperature, music, and amenities within their car). In this clip, Jeff describes the experience that he has curated in his car when he picks up passengers.
Implication: Ownership and control must be at the forefront of any new programs and communications in order to attract and retain drivers.
After determining what mattered most to drivers, we then had to figure out how Express Drive could emulate these attributes.
Express Drive Learnings
It became clear early on that Express Drive, in its current form, was limited.
62% of survey respondents were familiar with the program, yet 71% said they would not consider participating in the program. Drivers cited difficulty making money, as well as a lack of flexibility and control over their schedule as reasons why they wouldn't consider the program.
In this clip, Traci describes why she would never consider driving with Express Drive.
Functional Limitations
1. Costs of the weekly car rental significantly cut into a driver's profitability.
2. Exclusion from most driver bonuses, which tradition Lyft drivers would be eligible for, limits the financial incentive to drive with Express Drive.
3. Drivers are restricted to one app. Because they would be renting the car from Lyft, drivers could not drive for both Lyft and Uber, which 70% of drivers reported doing. This, too, negatively impacted their earning potential.
Emotional Limitations
1. Flexibility is hindered, as nearly full-time hours are needed to make driving with Express Drive worthwhile financially.
2. Control over the inside of the vehicle is limited because the rented vehicle must be returned every 28 days.
The Real Problem
Express Drive is a sub-par alternative to being a traditional Lyft driver.
Because Lyft had not explicitly stated otherwise, this was the overwhelming perception of Express Drive from current and prospective drivers, alike: that XD was an alternative, one that could be compared side-by-side to being a traditional Lyft driver who drives his/her own vehicle. As we saw above, though, XD just doesn't stack up.
Repositioning the Program
Despite its limitations, though, Express Drive still had two undeniable benefits: quick access to a car + quick access to a job.
We had to rethink how XD could be positioned in a way that better met the needs of current and prospective drivers and leveraged the benefits that the program had to offer.
When reimagining where XD could best succeed, we came to a realization:
while Express Drive may be a sub-par alternative, it could be an excellent way-in. One that made not only the sense of ownership and control, but also the economic mobility and ability to get ahead that comes with being a traditional driver accessible to those without a car.
In order to so, we would need to transform Express Drive from an offering that allowed people to rent and drive a car in perpetuity to a program that put people on a path to own a vehicle of their own.
Strategy
Establish Express Drive as a driver's on-ramp on their road to economic mobility.
This idea of an on-ramp would provide the strategic pillars for bringing the strategy to life.
"On" Pillar Tactics
1. Getting the word out
Current Driver Activation - Incentivize current drivers to refer passengers to Express Drive by offering bonuses to both the driver and the passenger upon the approval of the passenger's XD application. Doing so connects Lyft with those reliant on third-party transportation.
Express Drive Job Postings - Positioning XD as a means to economic mobility for those in search of it by posting on job sites like Glassdoor, Indeed, and others.
2. Community Events
Events at The Hub - Two weeks prior to presenting, the Lyft team in Richmond launched The Hub, the brand's first-ever retail presence in RVA. In an effort to get the word out about Express Drive, we recommended using The Hub to hold XD info sessions for prospective drivers and XD-specific Town Hall meetings.
Express Drive Accessories + Partnerships - Lyft-branded lanyards and keychains would be available for drivers to pick-up at The Hub. These accessories are a super simple and inexpensive way not only to get the word out about XD, but to enhance the sense of community by providing drivers with tokens of their group that non-drivers would not have access to.
Lyft-branded reuseable coffee cups would also be available for drivers at The Hub. Lyft would provide free coffee to drivers who stopped by The Hub with their Lyft coffee cup, and the brand could also partner with local coffee shops around Richmond to provide discounts to drivers who came in to those shops with their Lyft cup.
3. Partnerships
Goodwill - Not only would a partnership with Goodwill provide Lyft with potential candidates for Express Drive, but Goodwill's stated mission, "We belive that work is the foundation of empowering individuals, strengthening families, and creating prosperous communities," goes hand-in-hand with recommended repositioning of XD.
Virginia Employment Commission - VEC provides a ton of opportunity for Lyft to get XD in front of interested candidates, with over 10 job fairs in Richmond every month. VEC also offers closed recruiting fairs, so Lyft could pitch XD to interested applicants without having to compete with other employers.
"Ramp" Pillar Tactics
1. Program Updates
From Car Rental to Car Ownership - Our strategy hinged on our ability to shift Express Drive from a rental program to a program that ultimately put people behind the wheel of their own car. We laid out the framework for how we could transform the program:
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Lyft would leverage its relationship with Hertz as its rental partner to gain access to Hertz's Rent2Buy inventory, its fleet of cars that had aged out of its rental fleet that Hertz then looks to sell to the public.
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Lyft would purchase a portion of the vehicle in Hertz's inventory.
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Lyft would continue providing car access to XD drivers for the same weekly rates.
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Instead of drivers' weekly payments going to Hertz to cover the rental, Lyft would put driver payments toward purchasing the vehicle they drive outright.
Note: Please feel free to reach out for a more in-depth financial analysis (driver costs, brand costs, breakeven point, etc.) of how these program updates would work.
Driver Benefits - Retooling the Express Drive program would come with several distinct benefits for drivers:
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Accelerate the path to ownership - By keeping the weekly rates for drivers consistent with current levels, drivers could find themselves behind a car of their own in as little as 15 months, a significantly shorter path to ownership than traditional purchase and lease options, which usually span 2-3 years.
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Avoid large down payments and high interest rates - These financial barriers usually associated with car ownership could be sidestepped with these program updates
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Allow drivers to pay in completed rides - Innovating on the way the most people have to purchase a vehicle could attract many people without a car of their own.
Brand Benefits - Tweaking the terms of the pgroam also came with a major benefit for Lyft:
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Increased XD Driver Retention - By putting drivers on a realistic and trackable path to car ownership, they are more likely to stay with the program because they have a goal in sight. This would decrease the Express Drive churn rate, a major cost for the program.
2. In-App Milestones
Track Progress toward Car Ownership - Within the Lyft Driver app, progress toward not only their weekly goal (a standard feature within the driver app), but also toward owning the car that Lyft provides them.
Celebrate Milestones - The Driver app could also celebrate milestones on the path towards car ownership, such as every 100 rides completed or when drivers reach the halfway point of purchasing their vehicle, with ride coupons for drivers to use for themselves, as well as other small delights.
3. Community Mentorship
Lyft as a Mentor - We recommended a number of ways that Lyft itself could mentor new drivers on their path to car ownership:
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Best Practices One-Sheet - Based on its own data and feedback from experienced drivers, Lyft could provide every new XD Driver (and any new Lyft driver, ultimately) with the most profitable times and places in Richmond to drive, in addition to other tips and tricks.
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Data on Most Profitable Makes & Models - Lyft could give new drivers insight into which models are best suited to make them the most money.
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Direct New Drivers to the RVA Rideshare FB Group - Lyft should refer all new drivers to this online community, as it is a wealth of information and support.
Experienced Drivers as Mentors - We also recommended ways for Lyft to encourage experienced drivers to mentor new drivers:
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New Driver Mentor Pairings - Each new driver could be paired an experienced driver who could provide them with best practices. New drivers learn how to be most profitable from day one, and experienced drivers feel empowered as the elder states(wo)men of the driver community.
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Experiened Driver Monthly Panel - The same exchange of information and empowerment as the mentor pairing, but in a larger, more open setting.
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"In the Queue" Podcast Series - Lyft would produce a series of 3-5 minute episodes with experienced drivers that deal with tips and tracks, best driving experiences, and how to deal with specific passenger scenarios (e.g. how to deny a ride to a parent and young child with no car seat, etc.)