Lyft is opening up to other pathways to profitability and one space could be car rentals. The ridesharing company said it would be offering a car rental service that will allow consumers to rent a car without having to visit an actual brick-and-mortar rental service location.
“With Lyft Rentals, we’re giving riders the flexibility to rent a car for weekend getaways, business trips, or even to run errands,” Lyft said in a blog post. “Our vehicles come equipped with Apple Carplay, Android Auto, and phone chargers. Choose free add-ons like ski racks, car seats, and tire chains. And, we’re adding hybrid vehicles to the mix soon.”
Per the blog post, here is what Lyft offers:
- Door-to-door service: No worries about getting to your rental and back home after you return it — you’ll get a $20 ride credit* each way.
- Go the extra mile: Drive as far as you want — you get unlimited miles, and we don’t charge mileage fees.
- Refuel at a regular price: No need to fill up if you don’t have time — we’ll do that for you and will only charge the local market price.
- Enjoy unmatched hospitality: A concierge will greet you when you arrive at the lot and help you get on your way in minutes.
- Access to quality cars + amenities: Our vehicles come equipped with Apple Carplay, Android Auto, and phone chargers. Choose free add-ons like ski racks, car seats, and tire chains. And, we’re adding hybrid vehicles to the mix soon.
- Get weekday discounts: Enjoy discounted pricing when you rent Monday through Thursday±.
Following the announcement, competitors responded to the downside—Hertz dropped almost 6% to $15.26, while Avis fell 5% to $30.89 in Thursday’s trading session.
The news comes as Lyft’s stock is still recovering from its IPO debut. Per Business Insider, here’s how the IPO is doing thus far through Dec. 10:
- IPO date: March 29, 2019
- IPO price: $72 per share
- Performance on first day of trading: +8.7%
- Performance from IPO price through December 10: -37%
Lyft’s performance has made investors wary of IPOs—that they’re initial offering price could be the result of overvaluation.
“I think the market was very robust all the way through the first half,” said Kathleen Smith, principal at Renaissance Capital. “Investors got really turned off. I’ll call it a buyer’s strike, not wanting to participate because there were such big disappointments.”
Investors interested in IPOs can get broad exposure to IPOs via the Renaissance IPO ETF (NYSEArca: IPO). IPO seeks to replicate the price and yield performance of the Renaissance IPO Index, which is a portfolio of companies that have recently completed an initial public offering (“IPO”) and are listed on a U.S. exchange.
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