Lyft cuts sales staff, reorganizes team as the startup chases Uber
Six months ago, Lyft Inc. made a big push into corporate travel, building a team of several dozen employees to pitch banks, consulting firms and other companies on its ride-hailing services. This month, more than a dozen of those employees were dismissed or reassigned, part of a change in direction for the company’s nascent sales efforts.
David Baga, Lyft’s chief business officer who oversees sales, said the changes affected 17 people, primarily in sales support and business operations. Lyft, the second-largest U.S. car-booking app, has about 1,500 employees in total. “We are optimizing our team to better match what we need in the market,” Baga said.
Lyft will focus more on governments and health-care organizations, Baga said. The San Francisco company, along with Uber Technologies Inc., has made headway in providing a complement or replacement for public transit in some U.S. cities. On Jan. 12, Lyft touted a partnership with the National MedTrans Network in New York City, where it’s facilitating 2,500 rides a week for medical appointments.
Business travel has been a steeper hill to climb. Expense accounts are dominated by Uber, with Lyft making only small inroads. Lyft doubled its share of corporate travel to 4.3 percent of ground transportation transactions last year, according to travel expense reporting service Certify. Uber had 52 percent.
But Baga said his business initiatives are growing. He said after the cuts, the size of his team is essentially unchanged because he’s added the team focused on transit and health care. Quarterly revenue from business-related projects grew 50 percent over the last three consecutive periods, Baga said. Lyft declined to provide revenue numbers. “We’re making tremendous progress in the businesses that have the highest propensity to travel,” Baga said. “We’re continuing to grow and are one of the fastest-growing initiatives.”
Uber has always had an advantage in business travel, with its fleet of black cars serving as a starting point in many cities. The company has Travis Bogard, a former executive at gadget startup Jawbone Inc., running its 100-person team of corporate sales and Uber Enterprise product developers. The company said it has more than 50,000 companies using Uber Enterprise, including Accenture Plc, Barclays Plc, Blue Apron Inc., Goldman Sachs Group Inc. and Salesforce.com Inc. This number is expected to at least double by midyear, generating an estimated $1.5 billion in revenue this year, an Uber spokeswoman said.
John Zimmer, Lyft’s co-founder and president, hoped to rely partly on a friendlier brand to win over corporate customers. He said in June that his goal was to seize a majority share of the market. While Lyft has successfully signed up some companies to make Lyft their preferred travel option, that doesn’t often stop employees from using Uber.
Lyft has made more significant headway by marketing directly to consumers. Its share of big U.S. cities is 20 percent to 40 percent. It cut fares this month by about 1 percent as it prepares to roll out service in 100 more cities around the country. The job cuts at Lyft came as a more cost-conscious company aims to turn a profit by 2018, Bloomberg reported this month.
No comments yet