Introduction
Technological innovations have influenced the manner in which people operate from roads to their offices. The rapid growth of technology seems to influence even the automotive and transport industry (Akhilesh 2013).
Whereas several businesses and innovative ventures are emerging each day in the modern world, uniqueness and exclusivity are becoming an important factor in the growth and development of modern businesses (Osterwalder & Pigneur 2013).
Innovators regularly come up with new ideas, but their innovations rarely capture the market and consumers, and hence, they slowly plummet, because they fail to receive the expected adoption.
With the changing trends in consumer preferences, competent businesses are emerging with tantalizing business models and products, and thus new technologies have found it uneasy to penetrate the already explored markets (Louise 2013).
A starting technology meets many challenges and fears among financiers over the emerging technological businesses, as they are normally unsure of its future commencement. Fundamental to such notions, this research provides a professional analysis of a start-up tech venture known as Lyft.
Description of the Venture
Lyft is a modern and privately owned tech venture that emerged through innovations in the cab transportation company, and it is currently gaining extensive support and fame across the American roads (Lyft 2014).
Initiated during the summer of 2012, two innovators John Zimmer and Logan Green began the transport business and named it Zimride to offer passengers peer-to-peer ride sharing experiences (Lyft 2014).
Zimmer and Green developed the Lyft transport system with a dream of enabling passengers save money, avoid congested city traffic, and bring communities together through rideshare transport program (Lyft 2014).
The cabs form a system of transport network with the company affording to connect and match drivers with passengers, who have requested for a cab ride through the Lyft Android and iPhone mobile applications.
Lyft promotes the venture by encouraging passengers to influence their friend to sign up and reward them with $25 on the subsequent ride.
Using Department of Motor Vehicles (DMV) and background checks, Lyft screens drivers to assess their credibility and driving record standards in a stricter manner than the traditional taxis (Lyft 2014).
Lyft taxis are unique because they receive voluntary donations from passengers, unlike traditional taxis that rely on cash payments. Deposited weekly into their bank accounts, these community drivers receive approximately 80% of the total donations that passengers voluntarily produce (Lyft 2014).
Independent community drivers must have personal cars in good working condition and must possess Android phones or iPhone connected to passengers via the mobile applications.
Business Model Canvas for the Venture
In undertaking the professional analysis of Lyft as a new venture in America, this research paper uses the business model canvas to carry out the business analysis process.
Business model canvas is a modern form of the strategic entrepreneurial and management tool that allows businesspersons to challenge, design, describe, or even formulate and support their businesses (Manzano 2012).
Business canvas model has several elements that help businesspersons to describe and analyze a business system. It encompasses an appraisal of business partners, key activities, key resources, value propositions, customer relationships, business channels, revenue streams, customer segments, and the cost structure.
Key Partners
The key partners of Lyft business innovation are the core members, including the founder, John Zimmer, who oversees overall operations and progress, Amy Fox, who is in charge of partnership development, business counselor, Beth Stevens (Lyft 2014).
Corey Owens is responsible for maintaining public policy, Bill Vainisi is the vice president, and deputy general counsel, Kedar Deshpande, is responsible for strategic initiatives, while Marzia Zafaris is the director of planning and policy (Lyft 2014).
The community drivers, Department of Motor Vehicles (DMV), insurance agencies and companies, and the passengers are also important partners of Lyft.
Key Activities
Lyft undertakes numerous activities to ensure the rideshare program becomes effective. The main activity is to provide efficient and cheap transport of passengers and building an effective rideshare community (Lyft 2014). Lyft connects drivers and passengers technologically using Android and iPhone applications.
The company collaborates with insurance companies and the Department of Motor Vehicles to enhance transportation safety (Lyft 2014).
Lyft ensures that they scrutinize drivers through background checks and analyzing driving record standards, uses technological app feedback to analyze driver rating by passengers, and ensures an active the $1,000,000 excess insurance program.
Key Resources
For the rideshare program to be effective, Lyft has been relying on numerous important assets and human resources. Human resources that are valued the most are the skilled drivers. The most important assets in the business are cars for taking passengers around designated locations (Lyft 2014).
Lyft Transportation Company requires the Smartphones, especially Android phones, tablets, and iPhones that can support mobile applications, which connect drivers with passengers (Lyft 2014).
Smartphones must have the independent Lyft applications installed as one of the most important recourses that the passengers use to invite friends, co-workers, and relatives.
Value Propositions
The intention of Lyft is large and unique in nature. Lyft aims at leveraging passengers to use charitable free lifts enable them to avoid pedestal walls that expose them to carbon inhalation, and finally bring unity among communities (Lyft 2014).
Lyft business program aims at providing affordable, convenient rideshares, and improving the road safety through proper screening of credibility of drivers using criminal and background checks (Lyft 2014).
Therefore, Lyft aims at reducing cost and risk of travel, while enhancing credibility of drivers and improving transit convenience for the passengers.
Customer Relationships
Lyft has a unique customer-business relationship that hinges upon trust as one of the most important virtues between the two actors, and it is useful for the emerging peer economy (Lyft 2014).
Customers do not pay directly during service delivery, but willing donors send their contributions to the company after receiving free rides (Lyft 2014). Customers expect the taxi drivers to remain genuine during the offering of rides, as the Lyft principles require them, but not make any cash payments during the free rides.
Business Channels
The mobile phone technology in Lyft is an important innovation as it builds the central business channel (Lyft 2014). Customers remain connected through the Lyft mobile applications that act as the platform for social connection.
The Smartphones connect customers and drivers, and thus provide a means of enabling Lyft to assess the credibility of community drivers through a rating of 1 out of five rides scale (Lyft 2014). Passengers capable of bringing friends to free ride get $25 free credit for the next ride.
Revenue Streams
Revenue streams involve means of generating income within the business. The Lyft free rideshare program has ensured satisfaction among customers and since the payment is voluntary donation, the passengers are of different economic class and capable of giving higher amounts than from direct service charges (Lyft 2014).
The voluntary community contribution exceeds what ordinary taxis generate through direct service charges, as passengers give based on their willingness and financial abilities (Lyft 2014).
Customer Segments
Each business, according to economists, has its own customer segment (Osterwalder & Pigneur 2013). Lyft has a business customer segment that focuses on the niche business platform, as it targets specifically the passengers.
In the niche market, business relationships between consumers and service or goods providers rely solely on the specific necessities of the positioned market (Osterwalder & Pigneur 2013). Lyft focuses on developing the passenger community and providing them with affordable and reliable taxi transport system.
The Cost Structure
Cost structure in business model canvas is the cost incurred in running the business model. Lyft business model seeks to eliminate the notion of pay service in the taxi transport network, as its most important duty is to make city rides cost-effective to passengers (Lyft 2014).
The cost structure of the business model is therefore variable, as the service. The provision does not rely on fixed payments, but relies on the voluntary community donations prior to free peer-to-peer rideshare service. The donations vary depending on individual donors.
Table 1: The Business Model Canvas
SWOT Analysis for the Venture
SWOT, which is a renowned business analysis tool, stands for Strengths, Weaknesses, Opportunities, and Threats, and assesses the entrepreneurial model of a business system (Dyson 2004).
Fundamentally, SWOT analyzes capabilities, limitations, chances, and risks that businesses experience. This section of the term paper presents a professional assessment of Lyft business system using the SWOT analysis tool.
Strengths of Lyft Tech Venture
The main strength of Lyft tech venture is that it serves on a unique and modernized business system that relies on simple mobile phone technology, which connects targeted consumers and drivers. As the use of Smartphones is increasing and their demand is very high, it provides a platform for Lyft to flourish.
The Lyft mobile applications rooted in modern and trendy Smartphones enable consumers to enjoy easy communication, connection, convenience, and reliability with service providers. Lyft is a modern technology business that also understands the aspect of sociability in the business.
Weaknesses of Lyft Tech Venture
The foremost weakness that is likely to hamper a smooth development of the Lyft technology venture is dishonesty. Many passengers that may require the rideshare program are youngsters, whose capacity to give voluntary donations remain limited.
Due to such notions, the future of the technology venture relies on donations to pay community drivers. Since youths and teenagers may misuse the joy rides, the venture may suffer financial constraints as the misuse hampers its sustainability.
Opportunities of Lyft Tech Venture
A young technology venture with great innovative ideas has great advancement opportunities. As the business model is still young, the ideas are fresh in the market, involve active and youthful population, it has many opportunities in technology markets, which seem underexploited.
The cost-effective approach tailored to community may assist to generate enormous market fame and substantial consumer reputation, which may support its future progress in other potential markets. Moreover, Smartphones are increasingly becoming valuable and its consumption is rising.
Threats to the Lyft Tech Venture
Technology is ever changing because Smartphones appeared has just appeared in the markets, while iPhone and Androids may vanish as technology transforms. The modern technology is also prone to piracy since strict regulations are not in place to handle copyright infringements.
Competition is a significant threat to the success and progress of Lyft, as several taxi companies in the transport system are emerging.
As consumers familiarize with modern technologies and Smartphone applications are easy to make, too much reliance on the Smartphone and mobile apps may raise security issues in future.
Analysis of the Ventures Team
Lyft emerged following innovations of two John Zimmer and Logan Green who are the core founders of the Zimride business program. However, Lyft has an advanced venture team of more than ten members, but the five main members comprise:
- John Zimmer and Logan Green- Co-founders of Lyft.
- Amy Fox- responsible for partnership development in Lyft.
- Beth Stevens- acts as general counsel of Sidecar.
- Corey Owens- works for public policy in Uber.
- Bill Vainisi- acts as the Senior Vice President at Allstate Insurance.
John Zimmer and Logan Green
John Zimmer is a resident of San Francisco and the co-founder of Zimride program. Zimmer went to Cornell University, an institution renowned for intellectual development and broad research and developing innovative future leaders (Zimride 2008).
He had once worked with Lehman Brothers Holdings Inc, a financial company that offered global financial-services and investment banking until when it went bankrupt in 2008. Logan Green is also the co-founder of Zimride.
Logan Green graduated at university of California at Santa Barbara and has once worked as a sustainability coordinator at the University of California, Santa Barbara (UCSB) and a board member of Santa Barbara Metropolitan Transit District (Zimride 2008). Green had a high motivation in the transportation industry.
Logan grew up within Southern California and frequently spent most of his time stuck in heavy traffic that always insinuated him. Logan noticed the rising demand for ridesharing program as at the same time annoyed by the empty cabs and people walking on foot (Zimride 2008).
Out of his inspiration to change transportation system, Logan Greene began the Zimride in 2007, when he launched his first car-share program around Santa Barbra.
Following the successful adoption and integration of the Zimride, a Business week program recognized Logan Green as Top 25 Entrepreneurs in business economics from the Santa Barbara region (Zimride 2008).
Being a Lyft driver, Logan Green has had a dream of transforming the world transport system through 80% achievement of the Zimride.
Conclusion and Recommendations for Crossing the Chasm
Conclusively, following an increase in risks associated with venturing in new business innovations, it is increasing becoming uneasy for financiers from topmost venture capital companies to fund these new businesses without proof of future progression.
An emergent innovation must show proof that the technology will get a market reputation (Warford 2004). After a proper analysis of Lyft tech venture using business model canvas and the SWOT assessment tools, Lyft venture has to do much to ensure diffusion of innovation of the emergent Zimride program.
Target Customer
Although the Zimride and the Lyft tech venture have targeted the most diverse and needy market that is the transport industry, members should remain cautious about the preference and abilities of the targeted consumers (Louise 2013).
From an analytical view, peer-to-peer rideshare may involve the youthful population that is incapable of providing donations that are imperative for paying Lyft community drivers. Teenagers may enjoy the riding offered, and therefore, change of policies may be necessary.
Compelling reason to buy
The global traffic industry is ever growing as few individuals can afford personal cars even to date. Offering free rides to the needy travelers daily across the cities makes Zimride a unique business venture that may survive for quite some decades.
The population of America is swelling with many medium class individuals seeking jobs in towns and cities, but unable to afford personal rides. To improve trust to the Zimride, certain payment standards should prevail to discourage joy riders.
Competition
Zimride has provided the best solution to passengers, who experience inconvenience from the costly pay cab drivers.
Just as people have adopted and exhausted other technologies, the same technological innovation may undergo manipulation to design a different innovation, as Americans are still technologically suave (Zimride 2008).
People may fear ridesharing with people they are unfamiliar with and this may provide a chance for new tech businesses to take over the transit system.
Partners and allies
The Zimride program has already started receiving external support and donors. The relationship with other independent companies is increasing.
However, Zimride and other supportive programs may not have the capacity to continue influencing people to use their personal highly valued cars for the Zimride program.
Zimride requires highly moral drivers who cannot ask for cash payments to take people for the peer-to-peer riding privileges. To ensure smooth progress, Lyft and Zimride program must strengthen its operational policies.
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