Lyft, the ride-sharing company, has announced plans to phase out its standalone dockless bikes and scooters, as well as eliminate some jobs, in an effort to cut costs and focus on core operations. This decision comes as part of a broader restructuring initiative aimed at improving profitability and competitiveness.
The company, which operates the Citibike service in New York City and similar rental programs in other U.S. cities, had previously indicated that it was exploring options for its dockless bikes and scooters unit. Following a review of the business, Lyft has determined that discontinuing these operations aligns with its strategic priorities.
In Washington, D.C., Lyft will be discontinuing its dockless scooters. Additionally, the company is exploring alternative options for its dockless bikes and scooters in Denver. While Lyft does not operate its own bikes and scooters in many U.S. cities, it has partnered with companies like Bird and Spin to offer these services through its app.
The decision to phase out dockless bikes and scooters will result in charges of approximately USD 34 million to USD 46 million, primarily related to asset disposal costs. Furthermore, the company will be laying off around 1% of its workforce, which was approximately 3,000 employees at the end of last year.
Lyft expects the restructuring to generate cost savings of approximately USD 20 million on an annual basis by the end of next year. These savings will be achieved through improved operations, better sales strategies, and other efficiency measures.
The announcement of Lyft’s restructuring comes amid concerns about the company’s ability to compete effectively against its main rival, Uber Technologies. Lyft has faced intense competition from Uber in recent years, and the company has been taking steps to improve its financial performance and market position.
CEO David Risher has implemented several initiatives to reduce costs and increase revenue, including job cuts, enhanced driver earnings, and new programs to boost ride-sharing demand. While these measures have helped to improve Lyft’s financial situation, the company continues to face challenges in a highly competitive market.
The decision to phase out dockless bikes and scooters reflects Lyft’s strategic focus on its core ride-sharing business. By streamlining its operations and reducing costs, the company aims to strengthen its financial position and improve its long-term prospects.