Published On: Thu, Dec 26th, 2013

John Zimmer Introduces Surge Pricing To Lyft

Zimmer, co-founder and CEO of ridesharing service Lyft have announced that the company will begin to charge instead of requesting donations.

john-zimmer-lyft

John Zimmer has taken the first steps in  monetizing  Lyft, an application  that he introduced in 2013 to allows lift seekers to request a driver immediately and get a ride anywhere.

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.

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