Zimmer, co-founder and CEO of ridesharing service Lyft have announced that the company will begin to charge instead of requesting donations.
Zimmer knows a thing or two about ridesharing in the United States, being one of the major pioneers of the concept. Concepts that first he put into practice with Zimride, which he founded in 2007 in partnership with Logan Green, which was sold to Enterprise Holdings of St. Louis in 2012 for an undisclosed sum.
Now Lyft have joined their principal rival in the ridesharing sector, Uber, by waving goodbye to the roundabout method of earning money through “ donations” by introducing their own stylized version of “surge pricing” which they have labelled “Prime Time Tips”.
When the “Prime Time Tips” system kicks in, sharing rates will begin to climb starting from a 25 percent increase on the standard rate, with the price rising at a controlled until supply and demand level out.
Lyft have ditched their donations system in favor of the far simpler to handle “Prime Time Tips” option thanks to a legislative change from the California Public Utilities Commission, who have now deemed it legal to charge for in the state, where most of Lyft’s activities are currently focused.
However Zimmer has promised that the “Prime Time Tips” will only kick in whenever there’s a specific rise in demand for ride sharing and not enough drivers on the road to meet it. Known as “ surge pricing, this system, while similar to Uber’s, has been more finely tuned according to Zimmer and will prevent situations similar to those that occurred in New York City earlier this month when Uber drivers charged passengers up to more than eight times their usual rates when the city was gridlocked during a snowstorm.
Additionally, as John Zimmer hastened to point out, unlike Uber, Lyft intends to pass on all additional income from “Prime Time Tips” to their drivers, while Uber takes their regular cut from surge pricing.
At the same time as introducing “Prime Time Tips” , Lyft have also announced that they will be expanding their services further into the San Francisco East Bay Area, as well as some of the suburbs of Los Angeles, such as Pasadena and Malibu.
No matter how far they go, according to John Zimmer, Lyft will continue allow its subscribers to request a driver’s services immediately and get a ride anywhere at a rate approximately 30% less than a cab fare.
Before accepting any driver into their network , Lyft supervisors vets each candidate thoroughly through both an interview process and an intensive criminal check.
John Zimmer graduated at Cornell University School of Hotel Administration. It was during his time at Cornell that Zimmer began to see the advantages of a rideshare program when he was looking for rides home during college breaks school breaks, where he recalls seeing all of these empty seats.
After completing college, John began his professional career working as an analyst in the real estate finance department at Lehman Brothers in New York City, having the good sense or good timing to leave the brokerage company three months before they declared bankruptcy
In the meantime John Zimmer had hooked up with Logan Green who was working on a ridesharing concept similar to the one which had interested Zimmer in his student days.
In 2007, Green and Zimmer launched the first version of the rideshare program at Cornell University, which in the space of six months, had succeeded in signing up 20% of the entire student body.
By April 2012, before being sold to Enterprise Holdings of St. Louis, Zimride had succeeded in putting together close to 30, 000 car pools, whose users had travelled over 100 million miles along the way, saving more than $50 million in the process.