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Lyft is expanding its car-rental option to the entire US, the company said Thursday.
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The coronavirus pandemic hobbled Lyft’s core taxi business, and its losses are expected to triple in the second quarter.
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The expansion is possible via a partnership with Sixt, a German rental company that’s aggressively expanding in the US despite a recession.
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With the pandemic ruthlessly weakening Lyft’s core rides business and showing no signs of slowing down in the US, the company is expanding its rental-car offering to make up some of the slack.
The company on Thursday announced an expanded rental-car offering to all Lyft US customers through a partnership with Germany’s Sixt. The move expands on Lyft’s previous foray into rentals that it began to pilot last year in California.
“With our vision for car rentals, we are offering a completely integrated, frictionless, and transparent experience for transportation that renters have come to love,” Cal Lankton, Lyft’s VP of global operations, said in a press release.
After the initial standstill in business travel sent a shockwave through the rental-car industry, ultimately leading to Hertz’s bankruptcy, demand for car rentals has surged as Americans look for safer ways to take their usual summer vacation.
For Sixt, the deal is a way to further expand its US presence, which began in 2011. Earlier this month, it purchased a handful of key airport branches, including at New York’s JFK International Airport, from the freshly insolvent Advantage Rent A Car. Still, the German company hasn’t been immune to the same pains its US competitors have faced. It reported a 5.1 million euro loss for the first quarter, with executives warning the second will likely be even worse.
According to The Wall Street Journal, CEO Alexander Sixt — great-grandson of the company’s founder — quoted Formula One champion Ayrton Senna as inspiration for the aggressive business development amid the recession: “He said it’s hard to win a race when it’s sunny, but he can easily overtake 16 cars when it’s raining.”
Lyft is in the middle of a monsoon. Unlike Uber, it only operates in North America and doesn’t have a food-delivery arm to pad against steep losses on transportation.
In May, its most recent business update, Lyft said it was starting to see a slight rebound in the US, but ride request volumes were still down 70% from normal.
JPMorgan data shows things may have gotten worse after that slight increase, as the US largely fails to contain the pandemic. Daily active users measured by SimilarWeb, as reported by the bank’s analysts, show no meaningful increase from March lows.
Lyft will disclose full details of its second quarter on August 12, when analysts expect the company’s revenue to shrink by about a third and total losses to triple. The company’s stock price has fallen 32% this year.
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