Lyft is Encouraging People to Sell Their Vehicles for Ride-hailing Credit

Ride-hailing companies Uber and Lyft had been accused of making traffic worse in cities like New York, Chicago and San Francisco, as thousands of ride-hailing vehicle clog busy city centers during peak times. 

Lyft his helping to address this growing problem with a new plan aimed at encouraging people to sell their personal vehicles in exchange for ride credits on Lyft's platform, Reuters reports. Lyft said almost half of its riders said they use their cars less and 22% reported that owning a car has become less important.

The company is partnering with online used auto retailer Carvana. Residents of New York, Chicago or San Francisco who trade in and sell their vehicles on Carvana's platform would receive $250 in Lyft credit and three months of free membership in Lyft's subscription service Pink in addition to receiving fair value for their trade-in.

Lyft's Pink membership costs $19.99 per month and provides a 15% discount on all ride-hailing trips, as well as 90 minutes of complementary bike-sharing and electric scooter rides in cities where its is offered. In addition to ride-hailing, Lyft offers electric bikes and scooters on its app in many major cities.

The company currently operates bike-sharing services in eight cities, including in Chicago and San Francisco, and electric scooter-sharing in 20 cities, including Denver, Atlanta and Los Angeles. 

The Lyft app also displays public transportation options in all three cities targeted as part of the car selling program.

The offer is not for everyone, Lyft said it's targeting urban dwellers who are already considering giving up their car, said Lyft's senior director for transportation policy, Lilly Shoup to Reuters. 

Shoup said the effort was part of Lyft's commitment to reduce private car ownership and encourage multi-modal transportation. Carvana would not share any profits from the sale of a car with Lyft, she said.

Lyft plans to expand the program to other cities.

Lyft's partnership with Caravana is part of a broader effort to help reduce traffic in the cities it serves and get people to take advantage of other transportation options.

In September, Lyft has made changes to its app allowing users in some cities to compare the cost and travel times of different modes of transportation, including local public transit.

Lyft and its chief rival Uber have come under fire from city officials and advocacy groups for worsening congestion in major cities by having thousands of ride-hailing vehicle clogging busy city centers during peak times, worsening traffic even more. 

New York became one of the first cities to regulate ride-hailing vehicles in Aug 2018 when the city council approved several bills to regulate ride-hailing services, including capping the number of drivers who can drive for Uber and Lyft. The bill also establishes minimum pay rates to ensure drivers can make a living. New York is the biggest market for Lyft's biggest rival Uber.

Transportation is the second-largest household expenditure after housing, according to the U.S. Department of Labor, with households spending an average around $800 a month on transportation in 2018.

When asked is Lyft's alternative transportation options were cheaper than private car ownership, Shoup said those calculations were highly personal and dependent on the individual commuter.

Lyft still faces some challenges with the program. For one, getting people out of their cars to take aging and efficient public transportation systems in major cities, like New York's subway and bus system could prove difficult. Also a large part of the population is not ready to give up their cars just yet, even city dwellers.

Still, paying $19.99 Lyft's Pink membership and getting 15% off each rides every month is still much cheaper than owning a car in a city.