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News Article

Lyft Grows Mexico City Team; Will Not Offer Rideshare Services

By Antonio Gozain | Tue, 02/01/2022 - 11:23

Rideshare mobile application Lyft continues growing its Mexico City engineering team, tripling its workforce. Despite rumors, the company has confirmed that it does not have immediate plans to offer rideshare services in Mexico.

“The new CDMX office will be another home for our engineering teams, tapping into the wealth of entrepreneurial and innovative talent from Mexico’s finest institutions. While we have no immediate plans to offer rideshare in Mexico, CDMX is well poised to be our primary hub for all of Latin America,” wrote Chris Lambert, CTO, Lyft.

Rumors that Lyft would arrive in Mexico began in Jan. 2022, when the company posted over 20 job offers in LinkedIn, mainly looking for software engineers in Mexico City and Guadalajara.

Founded in 2012, San Francisco-based Lyft is Uber’s main competitor in the US, covering 95 percent of the country’s territory and offering its service in 12 Canadian cities. The company has grown exponentially. In 2016, Lyft's total revenue amounted to US$343,000 and by 2019, it increased to US$3.6 billion. That year the company went public in Nasdaq, raising US$14 billion.

Lyft was “thrilled” to open its first Latin American office in “one of the world’s most important cultural and financial centers: Mexico City,” wrote Lambert. The company hired 48 team members in 2020 and just tripled the number. Mexico City engineers work hand-in-hand with US-based teams to “solve complex problems and bring more innovation to our product lines.”

Uber and Lyft business models are radically different. Uber operates in over 70 countries and also provides food delivery services through Uber Eats, while Lyft only operates in two countries and its platform enables drivers to pick up food, retail products and auto parts for customers, rather than providing dedicated food deliveries.

Were Lyft to introduce ridesharing services in Mexico, it could change the way the ride-hailing market operates in the country. Currently, only five companies compete in this segment: Uber, Didi, Cabify, Beat and BlaBlaCar. The Mexican ride-hailing market is expected to register a compound annual growth rate of 28 percent between 2021 and 2026, according to Mordor Intelligence.

In Dec. 2021, users from ride-hailing platforms complained due to considerable increases in ride prices and rates in Mexico City. Mayor Claudia Sheinbaum said that SEMOVI would review regulations regarding mobility applications.

The increase in prices is a sign of scarcity or excess demand, which usually occurs in months such as December, said to El Economista Jesús Carrillo, Director of Sustainable Economy, IMCO. He added that Lyft’s hypothetical arrival in Mexico could lower ride prices in Mexico City.

The data used in this article was sourced from:  
MBN, El Economista, Lyft
Antonio Gozain Antonio Gozain Journalist and Industry Analyst