Lyft Case Study Report International Business
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Case Study Report
International Business – Global Online SOE 09492
This graded assessment accounts for 90% of your final grade and is based on the following Lyft case study. Read carefully the case study, questions and marking criteria (that can be found on Moodle). Answer all questions.
Lyft Case Study – Global Strategy
In recent years, several tech start-ups have grown in size and scale to become dominate players in the modern global economy. Amongst these are Lyft Inc and Uber Inc, both American tech start-ups offering ridesharing services. Lyft was launched in 2012 under the name Zimride, changing the name to Lyft in May 2013, and it is viewed as a smaller rival to Uber.
Lyft was initially only a ridesharing/ride hailing firm, but has since expanded into offering vehicles for hire, a bicycle sharing system, motorised scooters, and more recently food delivery. In 2017, Lyft entered the food delivery service, initially partnering with Taco Bell for a short period. In 2020, the firm entered a partnership with another tech start up, GrubHub to develop a takeout delivery service. This strategic move was chiefly undertaken in response to the outbreak of COVID-19 and reduced ridership.
The scooter services offered by Lyft are motorised scooters that can reach speeds of 15MPH; customers unlock them for a small charge, and then pay additional fees per minute of usage. In 2019, Lyft partnered with Segway-Ninebot, in order to offer a more durable scooter. Lyft had previously partnered with Chinese multinational, Xiaomi, for its scooter service, yet this relationship ended in 2018. Lyft’s car rental service is offered in partnership with the German multinational car rental service, Sixt. This allows Lyft customers to rent a vehicle through the Rental tab of the app. Customers can get a Lyft ride to a Sixt location where they can pick up the rental vehicle.
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Lyft holds around 30% of the market share in ridesharing service in the US (second only to Uber), and in 2018 its revenues reached $2.2 billion. In 2018, there were 4.2 billion rides given by Lyft. Whereas Uber has an extensive global presence, as it pursed a rapid internationalisation strategy, Lyft is restricted to North America. This presents Lyft with the opportunity to learn from Uber’s global activity and strategy. When comparing Lyft and Uber, Lyft has made several attempts to present itself as the more ethical alternative to Uber. Lyft has taken this approach as in recent years Uber has experienced a series of public relations failures, with allegations of systemic sexism, sexual harassment, and a disregard for regulation (at a global level). Lyft has seized on this opportunity to present itself in a different light, with substantial donations to charity, and allowing customers to round up their fare to make a charity donation. However, these attempts to be viewed as a more ethical alternative have only been moderately successful.
The outbreak of COVID-19 presented challenges and opportunities to Lyft. Lyft launched a program called “Essential Deliveries”, this service involved the delivery of medical supplies, test kits and meals for vulnerable individuals (with a focus on children or seniors) that could be picked up from distribution centres for contract free drop off. However, COVID-19 also caused disruptions for the firm. There has been a decrease in ridesharing and ride-hailing activity, and the Lyft Scooters segment of the business has faced significant challenges.
Questions
Lyft has appointed you as a consultant, and now that the coronavirus pandemic is over, the company is considering investing overseas in Asia, as global expansion is perceived at this time to be a potentially important element of the company’s long-term strategic goals. The country that Lyft is considering is Japan.
- Carry out a critical evaluation of the benefits, costs, and risks associated with doing business in Japan. (1200 words)
- Lyft has narrowed down its entry modes into Japan to three options: licensing, a joint venture with a host country firm, or setting up a wholly-owned subsidiary in Japan. Critically evaluate these three options. Which one would you recommend? (1000 words)
- Use the Geert Hofstede framework on international workplace culture to compare and contrast the cultures of the USA and Japan. Discuss how cultural differences would influence business/management (1000 words)
- Debate the relative merits of fixed and floating exchange rate regimes. From the perspective of Lyft, critically appraise the most critical factors in the choice between systems. (800 words)