LOS ANGELES (CBSLA/AP) – On the same day its stock successfully started trading on Wall Street, rideshare company Lyft announced the launch of a new initiative to improve transportation in Los Angeles by investing in clean energy and providing services to low-income residents and underserved communities.
Lyft’s co-founders, along with more than a dozen drivers, kicked off their initial public offering by ringing in Wall Street’s opening bell remotely from downtown L.A. Friday. They celebrated from inside a former car dealership in the 1600 block of South Figueroa Street that they plan to convert into a center for their company’s drivers.
Lyft’s stock opened at $87.24, up 21 percent from its offering price of $72. Lyft won the race with its much larger rival Uber to go public, and the debut marked the first time most people who have used their smartphone to summon a car through Lyft or Uber can take their chances on whether the ride-hailing phenomenon will continue to transform transportation and become a moneymaker.
Lyft also Friday announced a new program known as a City Works, which launches first in L.A., but will then spread to other cities. City Works will invest $50 million annually, or 1 percent of profits — whichever is greater — in transportation initiatives in these cities. The investments will include free or discounted rides for medical patients and low-income seniors and developing infrastructure for bikes, scooters and transit.
According to Lyft, the goal of City Works is “to rebuild our cities around people, not cars, and make seamless, affordable mobility available to all.”
L.A. Mayor Eric Garcetti was on hand for the launch. As part of City Works, Lyft is donating $5 million to Garcetti’s “A Bridge Home” program to combat homelessness. Lyft will provide transportation to support a Bridge Home’s partner organizations and provide low-cost scooter rides to L.A.’s low-income residents.
“This means that somebody who is living on the streets, but has a job interview, can get a free Lyft to be able to go there,” Garcetti told CBS2. “This means that we’ll be able to have folks looking at the first mile and last mile to connect on the rail lines to where they live. This means that we’ll look at the future of emissions in this city to make sure we can combat climate change.”
The IPO represents a watershed moment for ride hailing, an industry hatched from the rise of smartphones. Uber is expected to complete its own IPO later this year.
Despite Lyft’s recent inroad, there is still no guarantee the company will become profitable. Developing autonomous vehicles is key to reducing driver costs, and Lyft is behind competitors such as Google spin-off Waymo, which has begun testing a ride-hailing service using its robotic minivans in the Phoenix area.
Cutting costs by reducing pay to drivers also could prove difficult, a challenge underscored by protests staged earlier this week in Redondo Beach over wages that drivers complain already are too low.
Lyft’s co-founders Logan Green and John Zimmer have structured the shares so that together they will hold 49 percent of the voting power, enough to substantially influence major decisions.
(© Copyright 2019 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)