Lyft to pull the plug on dockless bikes, scooter operations in restructuring drive
2:14 pm Wednesday, September 04th, 2024
(Reuters) -Lyft will stop offering standalone dockless bikes and scooters and eliminate some jobs as part of a restructuring to cut costs, the ride-share service provider said on Wednesday.
The company, which operates the Citibike service in New York City and similar rental programs in other U.S. cities, had in July 2023 said it was exploring options for the unit after having received “strong inbound interest”.
“We are discontinuing our dockless scooters in Washington, D.C., and are exploring alternatives for our dockless bikes and scooters in Denver,” the company said.
As part of the move, the company will rename its bikes and scooters division as “Lyft Urban Solutions”.
The company does not operate its own bikes and scooters in many U.S. cities and has partnered with Bird and Spin, allowing riders to access them through the Lyft app.
Lyft said it would incur about $34 million to $46 million in charges, largely related to asset disposal costs, and lay off about 1% of its nearly 3,000 employees at the end of last year.
Cost savings from the restructuring, improved operations, and better sales strategies will help boost adjusted operating income by about $20 million on an annual basis by the end of next year, the company said.
Lyft last month forecast a weak September quarter, raising concerns about the company’s ability to cope with intense competition from Uber Technologies.
CEO David Risher has slashed jobs, as well as rolled out enhanced driver earnings and new programs to drum up ride share demand since he took on the top role at Lyft early last year.
(Reporting by Akash Sriram in Bengaluru; Editing by Krishna Chandra Eluri and Sriraj Kalluvila)
