Lyft gives way to ride with strangers, split fares

Lyft has launched a new type of ride sharing, one that stems from the car service's earliest days.

A carpool option called Lyft Line rolled out Wednesday. Lyft Line lets people share a ride -- and its costs -- with a stranger going the same way. Lyft said riders will save an average of 30 percent to 40 percent off a ride with the Lyft Line option -- and up to 60 percent depending on the ride.

The Lyft app lets people order a ride via their smartphones, and Lyft Line will show up as an option on the app -- initially in San Francisco only, though Lyft expects to expand it to other cities.

Lyft President John Zimmer said the new option creates the transportation network that he and co-founder Logan Green always wanted to build. Ninety percent of Lyft rides have another passenger who is taking the same trip within five minutes.

"We've been thinking of this user experience from the first day we launched Lyft," Zimmer said at a press conference this week at Lyft headquarters in San Francisco. "We encourage people to sit up front, and have a 'your friend with a car mentality' because this is the product we intended to launch."

Lyft has always had a more casual ride experience than its competitors, asking drivers to fist-bump with passengers and to dress their cars with fuzzy, pink mustaches.

Zimmer and Green launched Lyft in 2012 as a service under their original company called Zimride, a carpool service for college and corporate campuses. The idea for Zimride, which launched in 2007, was based on the shared-transportation system Green found during a trip to Zimbabwe. Without a public transportation infrastructure, people shared rides. Zimride grew slowly but established itself as the largest ride-sharing network in the US.

Lyft quickly found success as a standalone service, and Zimmer and Green sold the Zimride service to car rental company Enterprise last year in order to focus on its mobile app. Lyft is now available in 65 cities in the US and delivers 1 million rides a month.

The idea behind Lyft Line is not new. The company's competitors, including Sidecar and Uber, are also testing out carpool rides. Sidecar has been quiet about its testing, while Uber announced its beta version of UberPool on Tuesday, boasting 40 percent in savings per ride.

Although Green and Zimmer said a product like Lyft Line was always the goal, it took another company, Rover, to create it. The transportation app company was surreptitiously building a similar service off Lyft's network, using real time data to set routes. Lyft discovered the project and decided to acquire Rover several months ago.

To promote the service, Lyft is offering a passenger's first Lyft Line ride, up to $25, for free.

When users choose the Lyft Line option, the app will match the ride with another person who is on their route. Users will get a set price and are shown any detours required for the match. They can also choose whether or not they like the match. Even if a match isn't made, users will get the requested ride and pay the fixed, discounted price.

For now, Lyft Line will only match a user with one other passenger, but Lyft plans to match up to three people per ride. Users can set how many people they want to share a ride with. During the ride, if one of those passengers doesn't show up or cancels, the driver will move on but the discounted ride price will stay the same.

Green said Lyft's quickly growing network of drivers is what allowed the company to roll out a service like Lyft Line. More services will follow, he said, all with the aim of bringing down the price of rides. Zimmer said he wants to go as low as $5 a ride. In this sense, they see existing public transportation, like bus lines, as their biggest competitor.

"I think there's a psychological amount to what people attach to public transportation," Zimmer said. "We'd like to get to $5, wherever you go."

Clarification at 9:48 a.m. PT: A word was corrected in Zimmer's final quote.