Business Model Canvas and Value Proposition Canvas
BUSINESS MODEL CANVAS : Lyft
Overview and customer segments: Lyft is a ridesharing service operating in USA and Canada that connects people looking for a ride to drivers who have a car and want to provide transportation services. Lyft charges commissions from a driver per ride (approx 20%). Lyft’s primary business model is that of a cab aggregator, providing on-demand transportation services in a convenient, timely and cost-effective manner for users.
Value proposition: Users looking to travel from point A to B use the Lyft android or iOS app to pinpoint their destination, and Lyft’s technology then connects the user to a nearby driver looking to make the trip. Users can also track their driver and check estimated arrival time. The fares are generally lower than usual taxi fares.
Key activities: The product is the centrepoint of the business; therefore product development/management is one of the key activities Lyft engages in. The company also engages in marketing efforts for reaching and acquiring more customers, hiring new drivers, conducting background checks and managing driver payouts on a scheduled basis.
Key partners: Lyft relies on several key partners to run its business. These include Tech/infra partners (such as AWS or Azure), Drivers with their own cars, Investors for infusing capital and Map providers for car tracking and source/destination routes.
Key resources: Being a digital product, tech infrastructure is one of the key resources for Lyft. Drivers with their own cars are also another key resource, since the business relies on matching users with available drivers. Demand forecasting is also critical when it comes to surge pricing and ride-share options.
Cost structure: Major business expenditures include driver payouts, marketing efforts for acquiring new customers as well as retaining current customers and investment in technological improvements.
Revenue streams: Commissions from each ride are an important source of revenue for Lyft. The company also engages in dynamic/surge pricing based on peak-demand times and regions. Recently, Lyft has also started offering subscriptions and one-time fees for its network of bike/scooter services.
Value Proposition Canvas
Customer Profile: A typical Indian customer wants to travel from source to destination with the minimum of fuss. The customer wants to travel in a relaxed, convenient manner without the hassles of driving as well as parking. Ideally, the customer would like to know the price of the trip upfront, thus being able to decide whether it is cost-effective and not worry about price-gouging or bargaining at the end of the journey. The customer wants a service that will minimize the stress, work and burden normally associated with any sort of travel.
Products & services: The Lyft product should offer an on-demand cab service, which a user can access anytime via a mobile app. It should also provide door-to-door pickup and dropoffs for maximizing convenience and reducing travel hassles. The app should display the price of the trip upfront, thus providing all the services the user needs.
Customer Gains: The customer would prefer quick service and low turnaround time, so that less time is wasted waiting for journey to commence. Low, affordable pricing is another big preference. The customer does not want to deal with the hassles of finding the destination, and would like this to be managed for him/her. Frequent offers/discounts for loyal customers would be another area of gain for the customer.
Gain creators: Offering minimal waiting times, usually with estimates of when the journey will commence, will help user plan his/her trip. Fares should generally be lower than taxis, thus adding value for a user. Using Map APIs, car tracking and route-finding is automatically taken care of for the user. Lyft should run loyalty programs for regular customers, thus providing another value-add.
Customer Pains: For frequent travellers, such as those commuting for work, reducing costs is a major concern. The customer also has safety concerns when it comes to travelling solo, as he/she is in an unfamiliar environment. Customers also worry about the hygiene and cleanliness standards of the vehicle in which they travel.
Pain relievers: Ride-sharing options provide a great way for customers to reduce daily commute cost, as well as giving the opportunity to ride along with colleagues/friends. Regular background checks for drivers and emergency/SOS options during the trip would help ease safety concerns of users, especially women. Providing vehicles in good conditions by setting down quality guidelines for drivers would also ease another worry for customers.
